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The Three Fundamentals To Get In Order Before Addressing Sustainable Procurement

The first international guidance standard on sustainable procurement, ISO 20400, was released in April 2017. Since its publication, this standard has been used to inform policies and regulations, education and research, rating tools and product certifications, suppliers code of conduct and sustainability strategies, sourcing requirements and contractual KPIs.

In The journey towards strategic sustainable procurement, Action Sustainability reports on the benchmarking of 40 organisations, assessed on their alignment with this standard. The report gives an overview of what was learnt throughout this process and reveals the 10 success factors of your sustainable procurement journey that emerged as a result of the research.

Journeying to sustainable procurement

It’s not an easy process to arrive at a mature position on sustainable procurement. For many, evolving to the point where sustainability is fully integrated into the organisation, and its procurement processes, is a journey that can take 3-5 years.

Organisations are often quick to formalise their commitment to sustainable procurement, and engage their key stakeholders. But when it comes to the actual implementation, important drivers such as SMART objectives, performance review or individual objectives are very low. Sustainable procurement cannot be integrated or adopted seamlessly without first laying the foundations for success. In order for senior leadership teams to implement long-lasting, sustainable procurement initiatives, they must have these three fundamentals in place.

1. Understanding your organisations culture and drivers

Understanding the ‘why’ of sustainable procurement, the internal and external factors that will motivate an organisation to practice sustainable procurement, is as important as the ‘what’. A sustainable procurement strategy that sits at odds with an organisation’s values will not be supported by staff or stakeholders. For instance, some companies may be driven to practice sustainable procurement because of customer pressure and business values, whilst companies operating in highly regulated sectors such as construction and facilities would be typically driven by regulatory pressure and competition. Building a successful business case for sustainable procurement will depend on how well its drivers are understood and integrated.

Top tip: Undertake a Driver Assessment exercise, best completed through a workshop involving senior executives to be sure they are on board of the sustainable procurement approach.

2. Engaging your stakeholders

Stakeholder perspectives and values will also influence an organisation’s motivations towards sustainable procurement. Organisations getting started on their sustainable procurement journey should thus gain a strategic understanding of their stakeholders, supply chain and procurement spend. A key mistake to avoid is to entertain the perception that sustainable procurement is a ‘nice to have’, i.e. a philanthropic activity rather than a strategy embedded in the organisation. This usually results in poor due diligence on extended supply chains. Poor understanding of the internal management structure and spheres of influence is another common pitfall.

Top tip: Engage with your stakeholders before and throughout the development of your sustainable procurement strategy in order to make sense of the strategic importance of sustainability for your organisation and your supply chains.

3. Prioritising

There is no ‘one-size-fits-all’ in sustainable procurement – generic approaches generally fail. The strategy must reflect who you are as an organisation. Conducting a materiality assessment is a good way to understand your stakeholders’ top priorities and expectations. Failing to prioritise will lead organisations to feel overwhelmed with the sheer volume of sustainability issues to be addressed. It will also entertain the idea that sustainable procurement is a “box ticking” exercise with no clear link with business objectives.

Top tip: Carry out a priority setting exercise by setting up a “heat map” of sustainability threats and opportunities across your procurement spend. Conducting a heat map exercise enables organisations to focus their time and energy on what really matters… and stop feeling overwhelmed!

Download the full report here

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