As companies begin or continue their focus on addressing environmental, social and governance (ESG) issues, procurement can play a key role in proactively managing these before they create any reputational damage. According to a recent report by EcoVadis, commitment to and investment in sustainability practices remained stable or increased for 93 per cent of the organisations surveyed. A commitment to sustainability through clear procurement objectives should form a key part of these practices.
Robust procurement systems and processes require clear criteria for how and why a business chooses one provider over another. There are some key steps that procurement officers should follow to enable companies to choose the most suitable suppliers. Keep reading to learn what procurement officers should consider to foster sustainable procurement practices.
Updating procurement policies and objectives
A recent McKinsey study found that two-thirds of a company’s ESG footprint is in the hands of its suppliers, making clear procurement policies and objectives critical. If a company hasn’t already, it should update its procurement objectives, ensuring these address ESG issues throughout the supply chain. Key factors a company may look to cover in a sustainable procurement policy, include:
- Labour and human rights issues: Ensuring providers are transparent about how and where their products and services are produced while noting how key risk areas are addressed.
- Diversity and equity: How suppliers treat their people can impact your organisation by association. Having clear criteria for how the company expects its suppliers to address social issues and the diversity of its workforce is critical to the procurement process.
- Sustainability performance: Just as an organisation’s policies address ESG issues, suppliers must also have a transparent and measurable approach to sustainability reporting.
Choosing sustainable suppliers
As part of a procurement team’s baselining exercise, “sustainability as a standard” should be the approach to selecting suppliers. While it’s likely not possible to change all of a company’s suppliers in a short time frame, starting with small pilot projects builds a foundation to get buy-in across the organisation. For example, a large corporation may look at using green leases to ensure its devices are always current and, at the end of the lease term, recycled correctly so the devices can benefit communities in need. Further, this can also help companies, if they haven’t already, to adopt an agile sourcing approach which reduces the risk of surplus devices and other equipment going unused throughout their useful life.
Commit to sustainable procurement and get leadership buy-in with a Quadrent Green Lease
Procurement officers have a significant opportunity to shift their company’s ESG performance. Through establishing a strong commitment to sustainable procurement through updated policies and objectives along with pilot projects to demonstrate the long-term suitability and benefits, procurement teams can play a critical role in leading an organisation’s ESG journey.
Quadrent’s Green Lease takes the guesswork out of sustainable procurement by ensuring devices and equipment are sustainably recycled while having a positive social impact. Not only is this an effective way to deliver other benefits, such as increased employee engagement through having the latest technology available, but it also allows companies to make significant and measurable improvements to their procurement practices.
Quadrent works with organisations helping them to accurately manage their leases, improve IFRS 16 compliance data inputs and proactively manage their ESG risk. With a team that has in-depth leasing knowledge and specialised accounting backgrounds, we’ll help you get the most value out of your assets while addressing increasing ESG requirements.
Start your ESG journey simply and effectively with Quadrent. Click here for more information.
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