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Sustainable Procurement – Are You Ready?

Date: 30 July 2015

Sustainability within the procurement industry can produce major benefits, a recent article on the Procurement Leaders website details. According to a report from The Conference Board, procurement should begin to focus on maintaining sustainability as it can result in significant monetary bonuses. In fact, Action Sustainability reports that 60-80% of a company’s total expenditure is on its supply chain, so sustainability can understandably play a key role in finance.

In the ‘Driving Revenue Growth through Sustainable Products and Services: Implications for Chief Marketing Officers’ report, it was discovered that companies developing sustainable products benefitted from revenue growth six-times higher than overall revenues. One example provided is that of personal care corporation Kimberley-Clark; the business recorded top-line revenue growth from sustainable products between 2010 and 2013 of 296%, compared to overall corporate revenue growth of 7.6%.

This could be because sustainability is a major driving force behind corporate innovation, a Harvard business Review claims.

Procurement feeds into this as it is a key player in the management of supply chains. A report from Procurement Leaders has already detailed how corporate responsibility is being integrated into the procurement practice, so sustainability and its role in the process shouldn’t be too far behind. Being sustainable can do more than simply improve a business’ image; it can also be used to address global environmental and societal issues, The Conference Board notes in its report. This can, in turn, drive revenue and growth, as well as innovation.

The latest businesses to include a focus on sustainability within their procurement processes include Nespresso and Starbucks. The Positive Cup programme from Nespresso includes investments by the company to help develop the coffee industry in Sudan. The business has also introduced a retirement savings plan for Colombian coffee farmers.

Starbucks, on the other hand, has announced a $30 million investment in its Global Farmer fund Programme. Along with other sustainability efforts the coffee giant has thus far benefitted over 40,000 farmers across eight countries.

In fact, the world’s most sustainable company 2015 – Biogen– announced that procurement was indeed one of their focuses when looking to improve business sustainability.

These programmes and other similar ones can help businesses maintain a positive business strategy, as well as the image of good corporate citizenship.

Sustainability in procurement is developing and entails more than simply ensuring responsible suppliers are chosen; aspects like production, packaging, transport and labour must all be considered sustainable, too. As sustainability becomes more of a focus in this sector, roles and skillsets are obviously developing alongside this change.

If you’d like to receive more details regarding the development of the procurement industry and its increasing focus on sustainability, or if you are looking for candidates or a new opportunity within the space, contact our team today

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