While many large corporations are already beginning to focus on sustainability, there are green practices that should be implemented within sourcing and procurement efforts. Executing these practices will continue to reduce corporations’ overall greenhouse gas emissions in the process.
5 Steps Towards More Sustainable Procurement
1. Rethink Your Waste
The three R’s: reduce, reuse, and recycle, are simple, yet long-lasting when it comes to modifying your existing waste output. Large corporations often focus on strategic sustainable goals to put into practice, but low-cost changes can have a significant impact on a company’s resource consumption and provide long-term savings.
Smart adjustments like identifying shipping efficiencies and consolidation, installation of low-flow flush valves, switching to motion-activated lights or LED bulbs, green cleaning services, and promoting eco-friendly office product purchases under your national supplier agreement are tactical ways procurement teams can aid in supporting their organization’s commitment to reduce energy consumption and greenhouse gas emissions.
Look for strategic supplier partners who have the expertise to perform supply chain waste audits, energy assessments, lighting retrofits, industrial LED upgrades, or vendor management inventory solutions. These sustainable services can evaluate waste streams, increase energy efficiency across your facilities, reduce and consolidate inventory, and yield long-term operational savings that reduce CO2 emissions. To continue curbing emissions in the long-run large companies will need to reset their role within procurement and take control of what aspects they can directly manage.
Think outside of the box on how to reuse waste in your existing production practices. This will require cross-department collaboration but overall can support sustainable procurement goals and create production efficiencies. If your corporation cannot reuse bi-product waste, explore local recycling options or team up with other production-based companies and see if they can upcycle the waste into their production stream.
From cost savings and service optimization to regulatory compliance and environmental stewardship, many procurement teams look to a national provider for waste management and recycling services to work towards more sustainable solutions. In addition, global production-based companies are seeking ways to create a more circular economy. Through innovation and investment, Republic Services has recently opened the Polymer Center, which is dedicated to advancing circularity for plastics by managing the plastics stream from curbside collection, to delivery of high-quality recycled content for consumer packaging. From recycling collection to transportation and innovation, Republic Services will aid large corporations every step of the way.
2. Align With the Right Sustainability Goals
One of the first, and most crucial, steps a large corporation can take toward reducing its carbon footprint is outlining its future sustainability goals. Having benchmarks to track progress in the right direction is essential. Here are some questions to consider in shaping your organization’s sustainability goals.
- Is there a target date set that is attainable to reach these companywide goals?
- How can your procurement team contribute towards your company’s sustainability goals?
- How is sustainability tracked and measured for procurement?
Are there certain areas your company is focused on?
- I.e. zero waste to landfill, minimize product packaging, carbon neutrality across operations
- Which supplier partners have the service capability, product offering, supply chain infrastructure, and reporting visibility to do so?
- Which service providers and suppliers offer eco-friendly products or complimentary facility assessments?
- What can you do as an individual employee to aid in reducing CO2 emissions?
Sustainability is currently a leading issue in the sourcing and procurement world. With many CoVest Members and Suppliers focused on sustainability, we can serve as an extension of your procurement team by analyzing your indirect spend and align the right supplier fit for your organization based on purchases, needs, and sustainability initiatives. Having clear objectives for sourcing and sustainability will give your group purchasing organization and supplier partners the framework to support long-term sustainable objectives and ensure all parties are suited to support these goals.
3. Develop Eco-Friendly Allies
Each company has a unique path on the road to a more sustainable future. If your organization is just beginning that journey – start by doing your supplier research and look for over-arching sustainable goals that support your procurement practices. Developing eco-friendly allies will build the foundation for success across your supply chain. Read more about some of CoVest’s supplier partners and their commitment to sustainability below as eco-friendly allies in a global supply chain.
CoVest’s Global Workplace Solutions Partner – Lyreco’s Commitment to Sustainability
CoVest’s Global Lab Supplies Partner – Thermo Fisher’s Commitment to Sustainability
We learned from our Sustainable Procurement Panel at our most recent Member Meeting that our Members are narrowing in on their sustainable practices, and need supplier partners willing to commit to and deliver on sustainable practices, products, services, delivery models, packaging, and more. To avoid industry greenwashing and effectively benchmark suppliers’ sustainability efforts, many companies are turning to EcoVadis, a universal sustainability ratings service provider. This service helps provide a standardized assessment of a supplier’s sustainability practices and operations, scorecard their performance, benchmark efforts and provide performance improvement suggestions to ensure that all suppliers are meeting sustainable standards.According to a McKinsey report, “Two-thirds of the average company’s environment, social and governance footprint lies with suppliers.” Selecting a supplier partner who is committed to sustainable practices is more now than ever to procurement teams. Developing relationships with your supplier partners and exploring sustainability tactics can improve operations, create efficiencies, provide cost savings and reduce CO2 emissions at the site level. CoVest’s supplier partners are experts in their fields and can help assess and identify operational efficiencies that yield a more sustainable output. Grainger has shared their top ways of energy conservation through HVAC efficiency, while Rentokil has proven that pest control can support sustainability.
4. Engage Colleagues and Customers
Those who purchase your products reflect what you stand for as a brand. Once you begin realigning your corporation with the proper sustainability goals, consumers will follow suit. Putting these updated goals at the forefront of your brand’s messaging to consumers is increasingly important. “77% of consumers believe sustainability is important when selecting products to buy, up from 69% in 2021,” according to a recent study by IRI and NYU Stern Center for Sustainable Business.
So, how can you and your colleagues help walk the walk and talk the talk?
- Reducing the usage of single-use plastics at your work sites.
- Implementing programs like issuing reusable bottles to employees and administering prizes to those who refill the most.
- Whether it’s purchasing a larger item quantity or consolidating suppliers through a national agreement, reducing the number of shipments to your facilities will help reduce CO2 emissions, and lower costs.
- Switch to 100% recycled materials with brown towels in breakrooms and restrooms
- Opt for Eco-Blend Max trash bags and right-size your can liners to maximize capacity
- Manage your inventory effectively – check for expired products, ensure safety items comply with current standards, and reduce spot buys that are higher priced than a managed inventory program
- According to a report by McKinsey, “For most products, 80 to 90 percent of greenhouse-gas emissions are “Scope 3”: indirect emissions that occur across the company’s value chain, such as embedded emissions in purchased goods and services, employee travel and commuting, and the use and end-of-life treatment of sold products.”
It’s important to consider how much an indirect procurement team can influence practices and purchases within a company to support sustainable initiatives. Engaging your department leaders and company stakeholders provides a further connection to evaluate ways to make both upstream and downstream more sustainable within your supply chain and reduce costs. Identifying supplier partners and 3rd party resources like a GPO can also lead to more sustainable services, products, purchasing practices, and pricing. Reducing your company’s CO2 emissions is no easy task, but procurement teams can have a significant impact on creating a more sustainable future.
5. Invest in Bulk Purchasing
Bulk purchasing vital elements of your product can prove both effective and sustainable for your corporation. Frequent freight shipment via both land and air travel produces a large portion of CO2 emissions for corporations. According to the IEA, “Transport has the highest reliance on fossil fuels of any section and accounted for 37% of CO2 emissions from end-use sectors in 2021.”
Not only will ordering products in bulk reduce the number of shipments to your locations which, in turn, will reduce your CO2 emissions, but it will also cut costs which is a key component of procurement. Suppliers are more willing to offer discounted pricing for bulk orders as opposed to random bits and pieces purchased scarcely. This is where an organization like CoVest can help your procurement team with the bigger picture. We provide our Members access to competitive Supplier agreements for purchasing business support items and help them manage indirect spend more effectively.
Using Data to Optimize Your Procurement Process