How to Grow a Sustainable Procurement Policy
By Hugo Britt | April 21, 2022
This Earth Day we’re focusing on the growing trend toward green procurement. We provide tips for writing a green procurement policy that will help reduce waste, lower your organization’s carbon footprint, and help create a sustainable future.
Here’s how to get started.
Growing a sustainable procurement policy
Establish the scope of your sustainability focus
“Sustainability” can mean many things to different people. For some, it’s about building a business model that will survive and thrive in the future. For others, sustainability refers to reducing waste and the environmental footprint, while a wider definition of the term includes social issues such as labor practices.
To make sure you get the definition and scope right, look at your organization’s overall priorities and (if they exist) its sustainability priorities. This will help you refine your scope and make it achievable rather than attempting to do everything at once.
- Zero waste to landfill
- 100% sustainable palm oil
- 100% cruelty-free supply chains
- 100% renewable energy
- Water usage reduction
- 100% recycled or compostable packaging
- Zero discharge
Create green criteria for new supplier selection
No doubt your procurement function already has a suite of supplier selection criteria such as quality, reliability, speed, service, and financial stability. Incorporating green criteria into this list is a sure-fire way to embed your green procurement policy so it is actually used by the people making purchasing decisions.
Some examples include:
- Percentage of recycled content used in product or packaging
- Plastic packaging reduction targets
- Water usage reduction
- Energy efficiency or renewable energy usage
- Eco-label accreditation
- International standards compliance, e.g. ISO20400
- Third-party certifications.
Map your existing supply chain
Establishing green criteria for new suppliers is only half the battle. The hard part is to understand how green your current supply chain is, and to work with existing suppliers to improve overall supply chain sustainability.
Supply chain mapping is about visibility. It involves gathering and storing information about your suppliers, their suppliers, and so on. Doing so will enable better risk management and responsible sourcing, and help guide conversations with suppliers about where they currently are and where you would like them to be.
Communicate with existing suppliers
Give existing suppliers plenty of warning when implementing new, green standards that will require a major change or investment in their business. Failing to do so can push suppliers into financial stress, disrupt supply, and lead to price spikes.
Communicate expectations, establish baselines, set goals, and determine measurements with suppliers. Where possible, partner with suppliers to help them reach their targets – this could involve developing training and capacity-building programs. Show suppliers what’s in it for them: for example, the end customer is generally willing to pay more for sustainable products.
There is little point in creating a green procurement policy if it isn’t used by the people who make purchasing decisions in your business every day.
Launch an education campaign about the new policy, provide any necessary training, encourage compliance, and reward good behavior. Use your procurement system to lock out non-compliant purchases: for example, the system could be set to filter out any suppliers that do not have accreditation with a relevant eco-label.
Need assistance implementing a sustainable procurement policy? Group purchasing organizations like Una can help strengthen supplier relationships and enforce purchasing compliance. Contact us to learn more!
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