Sustainability: How can procurement help your business achieve its goals?

The sustainability agenda is becoming an increasing priority, as businesses focus on how they can deliver and accelerate environmental, social, and governance objectives.  There are many dimensions to sustainability, and tackling climate change is one of them, but it is also about ending poverty and addressing social needs such as education, health, and equality. 

The UN’s 17 Sustainable Development Goals are a good guideline for what sustainability encompasses. The last one of these is “Partnerships for the Goals”, which focuses on how governments can work together with the private sector and civil society. The yearly UN Climate Change conferences demonstrate how important collaboration is to delivering on the Paris Agreement. 

The COP summits are examples of collaboration on a macroeconomic level, but there is also a benefit to businesses having a strategy for collaborating on sustainability on a smaller scale, within their own networks of suppliers and partners.  Procurement can play an important role in this for the following reasons:

• Scope 3 emissions: according to the UN Global Compact, Scope 3 emissions* comprise more than 70% of a business’ carbon footprint, and these can only be reduced through collaboration with the various suppliers involved in the value chain.
• Influence: businesses can promote sustainability with their supply base through the criteria they use to evaluate tenders, such as requesting ESG certifications.
• Different perspectives: procurement teams have the opportunity to bring in external experts, particularly start-ups and SMEs, to offer advice, benchmarks, and new technology to help deliver sustainability objectives.
• Direct materials: in the manufacturing or consumer goods sectors, procurement teams can work with suppliers providing direct materials to design more sustainable finished products.

To collaborate successfully with suppliers on sustainability, businesses need a clear strategy, which should address questions like which processes and tools to use, and which suppliers to focus on. Once the strategy is defined, any sustainability initiatives will also need to be project managed.

Sustainability is only going to become more important in the coming years. Taking carbon emissions as an example, the 2022 UN emissions gap report concluded that implementation of current pledges will result in a 2.4-2.6°C temperature rise by the end of the century, well above the 1.5°C target. Delivering on sustainability goals is not something businesses can do in isolation, and procurement will be key to success.

If your organisation would like to find out more about how procurement can help deliver sustainability goals, BearingPoint have provided this short assessment: Quick Sustainability assessment (bearingpoint.services).

*Scope 3 emissions: all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

Author

Joe Temple

Senior Consultant

joe.temple@bearingpoint.com