Image Credit: Photo by Photo by Akil Mazumder
Author: Ethical Swag
Sustainability is now cemented as a core consideration for every aspect of business operations. Following consumer and regulatory standards–specifically the Sustainable Development Goals (SDGs) set by the United Nations–procurement managers have been newly challenged to implement good-for-people-and-planet practices within their supply chains.
In many ways, they’ve risen to that challenge. This article explores more concrete strategies to help them do just that.
Understanding the New Sustainable Development Goals
The SDGs are a set of 17 goals formulated by the UN to address global challenges–poverty, inequality, climate change, and environmental degradation. Each goal is a roadmap to a better future for everyone involved.
Procurement managers control many SDGs for their organization, considering the outsized role of supply chain operations in establishing a company’s footprint. Different decisions made at this stage can drive significant changes to social, environmental, and governance outcomes.
Sustainable Sourcing: Better Together
Partnerships are forming the backbone of sustainable and ethical sourcing practices. Procurement managers are increasingly vetting their partners and choosing suppliers who can be easily trusted as compliant with labor laws and fair trade principles and progressive on environmental initiatives.
This simple choice can help procurement managers achieve SDGs around fair work and economic growth (SDG 8) and responsible consumption and production (SDG 12).
This doesn’t need to be an all-or-nothing initiative. In fact, some of the most exciting outcomes will be realized collaboratively. Co-resourcing projects and collaborating on sustainable production methods like reducing waste, using renewable sources, and implementing efficient water practices. Production managers can incorporate sustainability criteria into their partnership workflow and be ready to collaborate with suppliers in their network to work together toward big aims and drive positive change.
Collaboration and Innovation
The collaboration can go both ways; procurement managers can foster collaboration with suppliers and internal stakeholders to promote innovation and find sustainable solutions. By involving suppliers in the early stages of product development, procurement managers can identify opportunities to reduce environmental impacts and find innovative ways to achieve SDG targets.
Collaboration can also extend beyond the supply chain. Procurement managers can engage with industry peers, NGOs, and experts to share best practices and develop sustainable procurement frameworks. By leveraging their networks, procurement managers can drive industry-wide change and contribute to SDGs such as industry, innovation, and infrastructure (SDG 9) and partnerships for the goals (SDG 17).
Measuring and Reporting on SDGs
What gets measured gets managed, and to effectively manage the achievement of SDGs, procurement managers need new ways to measure their sustainability performance. Strategies might include logging key indicators like greenhouse gas emissions, water usage, waste generation, and supplier compliance with ethical standards. By continuously monitoring and managing these metrics, procurement managers can identify areas for improvement, prioritize investment, and demonstrate progress toward SDG targets.
Moreover, transparent reporting can help build trust with stakeholders, including customers, investors, and NGOs. It showcases the organization's commitment to sustainability, holds suppliers accountable for their actions, and helps teams attract better, more purpose-aware talent. By being transparent about their sustainability efforts, procurement managers can contribute to SDGs such as climate action (SDG 13) and responsible consumption and production (SDG 12).
Procurement managers have an exciting role to play in SDG-led transformations. By promoting sustainable sourcing, fostering collaboration and innovation, and measuring and reporting on sustainability performance, they can drive positive change within their supply chains. With these impactful approaches, procurement managers can create a better way to do business.
Incorporating Sustainable Practices in the Procurement Process In Six Concrete Steps
1. Integrating sustainability criteria in supplier selection
Procurement managers can prescribe supplier criteria before the vetting stage, baking standards into RFPs and asking for the supplier’s reporting. This can involve assessing suppliers' adherence to environmentally friendly practices, such as using renewable energy or reducing greenhouse gas emissions, and their commitment to labor rights, fair trade practices, and diversity and inclusion.
Procurement managers contribute to creating a more sustainable supply chain by prioritizing suppliers who align with sustainability values. This not only helps achieve SDG goals but also establishes a positive reputation for the organization as a responsible and socially conscious entity.
2. Promoting the use of environmentally friendly materials and products
Another impactful way procurement managers can contribute to SDG goals is by investing in the use of environmentally friendly materials and products. By sourcing products that have a lower carbon footprint or are made from recycled materials, organizations can reduce their environmental impact and support sustainable production practices.
Procurement managers can actively seek suppliers offering eco-friendly alternatives and work with them to incorporate these materials into their procurement process. This can involve specifying sustainability requirements in purchasing contracts or collaborating with suppliers to develop innovative and sustainable solutions.
Not only does this approach contribute to SDG goals related to responsible consumption and production, but it also helps organizations reduce costs in the long run. Energy-efficient products, for example, can lead to lower operational costs and contribute to overall sustainability objectives.
3. Implementing ethical sourcing policies
Ethical sourcing ensures that the goods and services procured align with social, environmental, and ethical standards. Procurement managers can collaborate with suppliers to establish clear policies and guidelines for ethical sourcing.
This can involve auditing supplier practices to ensure compliance with labor and human rights standards, including fair wages, safe working conditions, and eradication of child labor.
Additionally, procurement managers can prioritize suppliers who engage in responsible sourcing practices, such as supporting local communities or using sustainable farming methods.
By implementing ethical sourcing policies, procurement managers contribute to SDG goals related to decent work and economic growth, reducing inequalities, and responsible consumption and production. They also create a positive impact on society by supporting fair labor practices and sustainable economic development.
4. Collaborating with Suppliers and Stakeholders
Collaboration with stakeholders is key to driving sustainable procurement practices. Procurement managers should actively engage with stakeholders, including internal teams, suppliers, customers, and local communities, to promote awareness, collaboration, and the implementation of sustainable initiatives.
By involving stakeholders in decision-making processes and by connecting each effort to the larger goal of building a better future, procurement managers can gain valuable insights and diverse perspectives that will help develop and implement sustainable procurement strategies. This collaboration can lead to more effective risk management, innovation, and identifying new business opportunities aligned with the SDGs.
5. Encouraging knowledge sharing and capacity building
Procurement managers have the opportunity to foster knowledge sharing and capacity building within their organizations and supply chains. By organizing training sessions, workshops, and conferences focused on sustainable procurement practices, they can empower employees and suppliers to adopt more sustainable approaches.
Sharing best practices, case studies, and success stories can inspire others and create a ripple effect of positive change throughout the supply chain. By equipping stakeholders with the necessary knowledge and skills, procurement managers can drive the adoption of sustainable procurement practices and contribute to SDG goals related to sustainable cities and communities, decent work and economic growth, and responsible consumption and production.
6. Tracking and Reporting Sustainable Progress
Setting clear sustainability targets and Key Performance Indicators (KPIs) can accelerate the progress curve. Procurement managers can use supply chain management software or sustainability data platforms to gather data on suppliers, materials, and processes. This data can be analyzed to identify improvement areas, assess suppliers' performance, and track progress toward sustainability targets.
As agents of change, procurement managers can drive innovation, foster responsible consumption and production, and build a more sustainable, equitable world. Their commitment and actions are instrumental in realizing the ambitious vision set out by the SDGs, proving that ethical practices aren’t just possible, they’re better for business, for people, and for the planet we all share.