What is sustainable procurement?
In short, sustainable or ethical procurement is the process of integrating environmental, social, and governance (ESG) considerations into procurement decisions, alongside traditional factors such as price, quality, and availability. It's about looking beyond the immediate needs of our organisation and considering the long-term impacts of our purchasing decisions on the environment, society, and the economy.
In the current market landscape, the emphasis on sustainability within procurement strategies has never been more critical. At Procurement Australia, we understand that sustainable procurement represents a fundamental shift in how businesses operate, ensuring longevity and success. This commitment to sustainability aligns with our core values and the services we provide to our members.
Why is sustainable procurement important?
The importance of sustainable procurement lies in its potential to drive positive change. By prioritising sustainability in our procurement practices, we can significantly reduce our carbon footprint, support ethical labour practices, and promote fair trade. Moreover, sustainable procurement helps organisations manage risk more effectively, improve their brand reputation, and achieve compliance with increasingly stringent environmental regulations.
Sustainable procurement strategy is vital for businesses of all sizes and across all sectors. It offers a pathway to improve financial performance by reducing waste and energy consumption, thus lowering costs. Additionally, it future-proofs businesses against the rising demand for environmentally friendly and socially responsible products and services.
The triple bottom line
A concept at the heart of sustainable procurement strategy is the triple bottom line, which focuses on achieving a balance between economic, social, and environmental performance by addressing the ‘three Ps’: profit, people, and the planet. The triple bottom line encourages organisations to extend their accountability beyond financial performance to include social and environmental impacts. This holistic approach ensures that businesses contribute positively to the world, providing value not just to shareholders but to all stakeholders involved, including the community and the planet.
Sustainable procurement in practice
While every organisation is different, a typical process of implementing sustainable procurement might involve some or all of these key steps:
1. Policy development — establishing a clear policy that outlines the organisation's commitment to sustainability and sets specific goals and objectives.
2. Supplier assessment — evaluating suppliers based on their environmental and social practices, in addition to the traditional criteria.
3. Product selection — choosing products and services that have a reduced environmental impact throughout their lifecycle.
4. Training and awareness — educating procurement staff and stakeholders about the importance of sustainability and how to incorporate it into their decision-making processes.
5. Performance monitoring — tracking and reporting on sustainability metrics to assess progress and make improvements.
By incorporating these practices, organisations can ensure that their procurement processes are aligned with sustainability principles, leading to more responsible and ethical purchasing decisions.
Benefits of sustainable procurement
The benefits of sustainable procurement are manifold. Environmentally, it contributes to the conservation of natural resources, reduction of greenhouse gas emissions, and minimisation of waste. Socially, it supports fair labour practices and promotes the well-being of communities. Economically, it can lead to cost savings through more efficient use of resources and can open up new markets and opportunities for innovation.
At Procurement Australia, we understand that our purchasing decisions have far-reaching consequences, and we strive to ensure that they reflect our dedication to sustainability with our supplier network. We’re committed to leading the way in sustainable procurement, aiming to create value not just for our members, but for society and the environment as a whole.
To learn more about how we can support your organisation's journey towards sustainable procurement, visit our sustainability solutions page. For further information or to discuss how we can assist you in achieving your sustainability goals, don’t hesitate to get in touch.
Source: Procurement Australia
