Improve Your Triple Bottom Line In recent times Chief Procurement Officers have seen their agendas increasingly influenced by sustainability issues like environmental, socialand corporate governance. Sustainable Procurement or Green Procurement has become a top priority among companies for several reasons, one of which is the more intense attention being paid to brand reputations. Implementing Sustainable Procurement practices also has following benefits: a) Helps in improving risk management capabilities that may arise because of either risk to customers or company brand. This initiative helps in identifying and screening suppliers that may pose reputational risks, such as manufacturers that use toxic material or a supply chain partner that is exploiting child labor.
b) Carbon regulated markets are gradually increasing and suppliers will face additional carbon costs in future. Majority of product related emissions for most companies occur outside their operational boundary. Suppliers with high carbon footprints are exposed to risk of increased operational cost and could even face shutdown.Sustainable Procurement related initiatives help companies prepare for the imminent regulatory environment and explore long term cost saving opportunities.
c) Many institutional investors are increasingly considering Sustainable Procurementas part of their assessments of a company’s medium- to long-term prospects for return on equity. Specific sustainability-related metrics are included in their portfolio allocations. What is Sustainable Procurement? Sustainable procurement can be defined as a process whereby organizations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis and generates benefits, not only for the organization but also to society, the economy and the environment. This includes but is not restricted to: a) reducing the amount of resources we use b)
reusing products instead of buying new
c) purchasing recycled or sustainable products Process Adopted: Companies only audit their main suppliers; the risk associated with rest is not assessed. EmpoweringCPO helps achieve the objectives of Sustainable Procurement by adopting a detailed process which starts with evaluating all supply chain partners as well as tier 1 and 2 suppliers. In addition research is conducted on an ongoing basis to update performance of suppliers in terms of fulfillment of sustainability related objectives.