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Will Sustainable Procurement Take A Back Seat After COVID-19?

For at least a couple of months, the world questioned whether the silver lining of COVID-19 would be its gargantuan impact on the environment. The effects of unprecedented lockdown measures around the world were indeed something incredible to behold – bluer skies, clearer running streams, and a vast reduction in inner-city smog.

Several environmentalists observed (and hoped) that this could be a much-needed wake up call, helping people realise that major environmental action is possible.

But as time has gone on, it’s becoming increasingly clear that this might not be the case and without a concerted effort, things will likely return to how they were before – or perhaps even worse, with the winding-back of environmental regulations.

Last week, for example, newly available Google and Apple mobility data revealed that while coronavirus restrictions did result in a sharp drop in carbon emissions, the long-term impact on the climate crisis will be negligible. The study reports that global warming will be cut by just 0.01 degrees Celsius by 2030.

To keep the rise in global temperatures below 1.5 degrees Celsius, thus meeting the Paris Agreement requirements, it is essential that governments and organisations around the world invest in a green economic recovery post-coronavirus. Unfortunately, that’s easier said than done.

What’s holding up a green recovery?

There’s a very real chance that a blinkered focus on economic recovery post-coronavirus will push sustainability further down the agenda. This was certainly the case following the 2008 financial crisis when there was a major spike in support of fossil fuels.

In recent weeks, there have been countless examples of governments bypassing environmental regulations and businesses rewinding their green initiatives in favour of relaunching the economy.

Australia’s federal energy minister, Angus Taylor, announced plans to develop gas-fired power to boost the economy while political strategist Sir Lynton Crosby has argued that business survival is more important than environmental issues.

Meanwhile, the Chinese government recently announced it would bypass its typical environmental regulations to improve production and operations and limit economic fallout.

In the U.S., several organisations, including Starbucks and Tim Hortons, have banned the use of reusable cups and the Plastics Industry Association is pushing for an increase in single-use plastics, claiming that this will reduce the spread of coronavirus.

These actions are largely driven by concerns over financial instability and a determination to reboot the economy as soon as possible. But this approach is not an effective long-term strategy.

How can procurement support a green recovery?

Research conducted by Nobel prize winner Joseph Stiglitz proves that climate mitigation actions can deliver maximum economic growth. For example, spending on new green energy projects generates twice as many jobs for each dollar invested compared with an equal investment in fossil fuel projects.

The most forward-thinking companies are looking to recover from the current crisis in sustainable ways, and procurement has a hugely important role to play in supporting that mission.

Competitive advantage, greater revenue, and increased supplier innovation are the hallmarks of a successful sustainability program. Procurement professionals must work alongside their organisation’s leaders to achieve this, identifying suitable suppliers and finding more creative ways to buy green.

As much as 90% of a company’s sustainability accomplishments can be attributed to the supply chain and 35% of companies observed a boost in sales revenue as a result of sustainable procurement initiatives.

Particularly in the wake of the coronavirus pandemic, organisations are also exploring the value of shifting to a circular economy as a means to better mitigate risk. For procurement, this means establishing a local, and far more sustainable, supply chain.

Last month, Nature Communications released a study that estimated the cost of climate inaction to be as much as AUD$1231 trillion. It’s time for businesses to act now, or gravely regret it later.

On 25th August, PASA Connect is hosting a virtual roundtable on Sustainable Procurement. You can find more information on becoming a PASA Connect member here.

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