The Importance of Sustainable Procurement

Nowadays, more than ever, the world focuses on sustainability. Consumers want to be informed about where the products they buy come from and what they are made of. On the other hand, businesses want to be seen as leaders in environmental management. Sustainable procurement is one way for companies to take the first step toward sustainable practices.

Businesses have various reasons to focus on environmental, social, and governance (ESG) problems. They may want to satisfy their customers who are increasingly choosing companies with strong ESG credentials even if the prices are higher or striving to stay ahead of stricter regulations.

Others may react to pressure from investors and banks, feel a need to attract and retain top talent, or want to improve employee engagement. However, most companies focus on sustainable procurement because of the combination of mentioned factors, resulting in the need to understand and handle environmental impact through every part of the supply chain and overall business.

Here, we discuss sustainable procurement, why it is essential, and how it can help you grow your business without damaging the Earth.

What Is Sustainable Procurement?

Sustainable procurement is the integration of Corporate Social Responsibility (CSR) principles into your business’ procurement processes while ensuring they meet your stakeholders' demands.

Generally, sustainable procurement integrates requirements, specifications, and criteria compatible with environmental and societal protection. It also covers issues such as child labor or toxic chemical use that can negatively affect the environment and the people in it.

That said, businesses need to future-proof their sustainable procurement and investments by enforcing sustainable policies that boost their viability in the long run. Policies and strategies for sustainable procurement are based on the pressures brought upon by cost and the ability to reduce it through reductions in energy consumption and waste, the need to future-proof themselves around scarcity in supply, and the ability to handle the demand of emerging markets.

Sustainable procurement can assist businesses in protecting their reputation because it requires them to develop strong risk management. This allows them to determine problem suppliers and tackle weak spots in their supply chain that can generate bad publicity.

In addition, sustainable procurement offers possibilities for brand recognition as it stimulates companies to develop more sustainable and innovative products. That said, sustainable procurement can help companies identify and reduce the environmental effects of their supply chains by:

• Identifying fair-trade, low-impact, and environmentally friendly suppliers
• Using responsibly-sourced materials
• Reducing waste
• Maintaining a healthy work environment

The Benefits of Sustainable Procurement

Besides improved supply chain sustainability, sustainable procurement has many other benefits, including:

• Cost reduction: By reducing energy costs and waste, suppliers can decrease the company’s supply chain expenses by 9% to 16%.
• Risk reduction and improved reputation: Suppliers who implement poor approaches such as child labor or are causing excessive pollution can create financial difficulties and damage their brand reputation. However, sustainable sourcing minimizes this risk and creates a better brand image.
• Increased profits: Growing number of consumers value sustainability and thus search for sustainable and ethical products and companies. Also, they are willing to pay more if the product is sustainable and ethically sourced, which translates to growth in revenue for your business.
• Future-proofing: Developing sustainability in procurement is one of the ways to future-proof the company against a possible supply shortage. This can also help protect against changes in social aspects, economic factors, and environmental effects.

Why Is Sustainable Procurement Important?

Sustainable procurement is essential to companies of all sizes in every sector because it helps them improve their finances and future-proof the business against various challenges that can disrupt supply chains. This means more flexibility for any company striving to reduce its carbon footprint, helping fight global warming.

As we mentioned, consumers are also asking more questions about the origin of the products they buy and how they affect the Earth. Although the current trend is to use renewable and sustainable materials like hemp and bamboo, innovations will be critical to help companies meet sustainability objectives.

Fortunately, over recent years, progress has been made regarding supply chain sustainability, with many companies re-purposing products, reducing single-use plastics, and decreasing transport.

Essentially, all businesses should consider what they can do to become more environmentally friendly via procurement, not just industries typically associated with natural resources.

That said, sustainable procurement is a critical element in corporate social responsibility (CSR) because food scarcity, climate change, and the impact the population has on our planet can be attributed primarily to industry. It allows companies to reverse the damage made, showing they are aware of their impact on the environment and consider it when making buying decisions.

Choose a Company that Values Sustainability

As businesses strive to reduce the negative social and environmental effects of their activities, they are realizing that both the greatest risks and opportunities can be found in the upstream supply chain. And that places sustainable procurement at the forefront of the shift to sustainable business models.

By choosing a logistics company that values sustainability, such as Unival Logistics, your products will travel via the best shipping routes, ensuring timely delivery and reducing the possibility of your goods getting damaged in transit. Not just that, it will also reduce fuel consumption, contributing to a greener, healthier environment.

On top of that, you will get full-value package insurance at premium rates, real-time tracking, and API integration. We will be glad to help if you have any questions, so don’t hesitate to contact us.