Best Practices for Sustainable Procurement
At time of writing, world leaders have just concluded the Cop26 in Glasgow, Scotland, and signed a deal on carbon emissions that most agree falls short of the action that is needed and succumbs to the pleas from big polluters such as China and India to create a system which offsets carbon emissions rather than a commitment to eliminate them.
Manmade climate change is an undeniable fact and it's disheartening to see the people with the power to facilitate meaningful change once again failing to do so. The extreme weather events and disasters such as wildfires and flash floods we have been witnessing in recent years are only the beginning, and the time to act is rapidly running out if we are to mitigate the worst of its effects.
Procurement has a role to play in all this. Sustainable procurement is a lofty goal, but one that all corners of business should strive towards.
The Flexible Framework
The UK's Department for Environment, Food, and Rural Affairs (DEFRA) has put in place a series of guidelines which provide a framework for procurement officers to follow and build their organizations towards a more sustainable future.
While the framework was created with the goal of applying it to public procurement, there are certainly lessons contained within that any organization - no matter where they are in the world - can take away and learn from.
Dubbed The Flexible Framework, the system is designed as a self-assessment mechanism which allows supply chains to take responsibility for and measure their own progress towards sustainable procurement over time. The framework is, as the name suggests, flexible enough to be deployed by any organization, regardless of size or resources and suggests five key areas to focus on to drive new levels of sustainability.
"The Flexible Framework is a widely used self-assessment mechanism developed by the business-led Sustainable Procurement Task Force, which allows organizations to measure and monitor their progress on sustainable procurement over time," says DEFRA. "The framework was designed so that it could be used by all organizations: from those with significant levels of procurement expertise and resource to those with limited resource at their disposal. The recommended approach to implementing the Flexible Framework is to systematically work through each theme from levels one to five."
#1 People
The section of The Flexible Framework devoted to people focusses primarily on training and capacity building and seeks to ensure that all procurement staff are well versed in the latest findings, practices, and procedures relating to sustainability.
Training programs should be ongoing and perpetual, starting with the onboarding process for new employees and running through several levels from basic introductions to concepts, right up to advanced learning which will equip staff with the knowledge, skills, and confidence to embed sustainability practices into their daily role.
Refresher training should also be implemented for all levels of staff to update them on any new developments - both internally and externally - in regard to sustainability.
#2 Policy, Strategy, and Communications
This element seeks to leverage the latest information regarding sustainability to drive organizational policy and strategy decisions and create new ways of operating with the long-term health of the planet in mind.
Inspiration can come from anywhere, be it government green policy or areas of importance that are specific to your organization. For example, procurement naturally relies on a lot of transport to bring goods from suppliers, so communicating with those suppliers and developing policy and strategy regarding greener vehicles or fuels will likely be appropriate.
#3 Procurement Process
Stage three of the framework is mainly concerned with developing a risk assessment strategy which allow procurement departments to look at the entire value chain that forms their supplier network and identify sustainability risks which need to be addressed.
Once areas of highest concern have been identified, targets can be agreed on and worked towards. These targets would ideally be bilaterally agreed upon and cemented in contractual buyer-supplier agreements. However, voluntary targets are an option, and your best judgement will inform you as to which is best for your organization.
#4 Engaging Suppliers
The next phase sees continuous engagement with suppliers and an ongoing policy of communication and cooperation.
Data should be shared through the entire value chain using digital platforms with universal access. This will help all stakeholders keep track of how each link in the chain is progressing towards agreed upon targets and alert each to any issues which may be arising so they can be addressed in a timely and effective manner.
Events and workshops can also be arranged to get people together in person and generating innovative ideas and strategies.
#5 Measurement and Results
This is where the aforementioned data is generated and analyzed. Without measurement, it's impossible to know whether your endeavors are bearing fruit or not.
Measuring sustainability can be difficult as it can take a significant amount of time before results are apparent. However, you can easily measure factors such as cubic feet of carbon emissions eliminated, physical waste levels, fuel costs reduced, and so on. These can provide your value chain with valuable insights into your progress and inform ongoing strategies.
Final Thoughts
As you can see, these five stages are not independent but rather feed into one another, with each informing the others. Procurement has the potential to have a significant impact on the overall sustainability of their parent organizations and the results will be worth the effort.
Sustainability in procurement is set to be a hot topic at ProcureCon Indirect West 2022, taking place in April at the Sheraton Grand at Wild Horse Pass, Phoenix, AZ.
Download the agenda for more information and insights.