Recently, there’s been a fundamental shift as companies address sustainability and move towards implementing greener practices, net zero carbon emissions, and focusing on a more circular economy. With sustainability at the forefront for many global companies and certainly our Members, CoVest recently held a panel discussion at our annual Member Meeting that centered on developing a greener path to procurement.
Procurement plays a key role in influencing an organization’s sustainability practices by shaping purchasing policies. While there are many facets to sustainability, different departments and individual employees can contribute on a daily basis to make significant companywide changes. Steps as simple as greener pack and ship practices, selecting eco-friendly products, upgrading to LED lighting in facilities or reducing energy consumption, can go a long way while also providing cost-savings. Of course, sustainable goals are high priority for operations and procurement departments, however, it takes various stakeholders to achieve companywide sustainability goals.
Below we will highlight important points discussed during our sustainability panel at CoVest’s recent Member Meeting. Understanding how other procurement teams are operationalizing sustainability goals may help other organizations lay the foundation for a seamless transition to a more sustainable corporate model.
Cross-Department Collaboration Is Key
One Member panelist, a global pest control company, discussed their recent corporate commitment to net-zero emissions for operations by 2040. They believe that sustainability is a companywide effort that heavily involves their partners and procurement department.
They have found that getting colleagues and employees engaged has proven successful in the adoption of these new sustainability goals. Visibility and collaboration have enabled employees to get involved, with the ability to provide feedback on sustainability efforts, including an intranet for tracking and achieving milestones. This allows everyone to be part of the conversation and contribute in their own compacity. Additionally, every employee received a barcode that sticks on their reusable water bottles which can be scanned each time it is refilled. Since the implementation of this program two months ago, they have had over 10,000 refills and have already begun to reduce their carbon footprint by encouraging reusable water bottles over single-use plastics.
The takeaway is to remember that with sustainability, you have to start somewhere. Becoming a “green” company will, in the beginning, be an investment but in the long run, end up saving companies millions of dollars when done right. Reducing energy consumption is an effective starting place. Methods such as installing LED lights throughout your facilities, will reduce electric consumption, provide energy efficient savings and, with better lighting, can even aid in safety and security. Other ways to reach your sustainability goals is to implement reduced packaging at your facilities. Buying products from your suppliers in bulk and using reusable or recyclable product packaging at your facilities can create significant efficiencies and savings. While procurement teams put these purchasing polices in place, it takes multiple teams to work together effectively to dial in more sustainable practices across the company.
Scorecard Your Supply Chain Sustainability
“Greening” your supply chain is no easy feat. Our next Member panelist, a global chemical company, shared insights as to how to gauge a supplier’s sustainability and manage your supplier network, both upstream and downstream, more effectively. With their recent announcement to become a carbon-neutral company by 2035, this Member shared ways they have ramped up their efforts by engaging a universal sustainability ratings service provider, EcoVadis. This 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. They require all their direct material suppliers to pass the EcoVadis assessment, while indirect suppliers must hit a certain threshold before they can be considered for this audit. Ultimately, the goal is to make every single one of their suppliers EcoVadis-approved.
The biggest takeaway is to start looking at the waste within your company and find different ways to reuse it. Large corporations tend to see their waste as useless, but that’s not always the case. Our Member took an innovative approach by upcycling byproduct to create a new product, proving new sustainable practices can be achieved by thinking outside of the box.
Additionally, consider how much indirect procurement can influence purchasing and practices of a company. Some indirect purchases are not analyzed enough by companies to make the switch to more sustainable products. But you have to start somewhere, so why not start with your indirect procurement?
Think Globally, Act Locally
Our next panelist joined us from Envision Charlotte, a non-profit organization that works alongside volunteers, local government, and the corporate community to develop innovative ways to propel Charlotte forward as a Smart City.
In 2011, Envision Charlotte started as a first-of-its-kind public-private collaboration between Duke Energy, Cisco, and Charlotte Center City Partners to make commercial buildings in Charlotte’s urban core more energy efficient. They helped 61 commercial buildings reduce their energy use by 19.2%, saving $26 million in utility costs and cutting carbon dioxide emissions by 300,000 tons, the equivalent of taking 11,000 cars off the road.
Envision Charlotte recently opened the Innovation Barn, a combination of entrepreneurial businesses, zero-waste initiatives, and a space to convene groups in order to learn more about and implement circular projects. They focus on four different kinds of waste: plastics, textiles, organics, and construction and demolition waste, concentrating mainly on plastics.
We had a chance to tour the Innovation Barn with our Members while in Charlotte and were inspired by the creative ways they turned trash into treasure. One of Envision Charlotte’s most recent, and impactful, projects was during the Covid-19 Pandemic. At the height of takeout container usage, Envision Charlotte worked with local students to raise $20,000 for a 3D Printer. This printed was used to extrude filament from takeout plastic containers which was then turned into PPE for those in need. Now, Envision Charlotte is teaming up with corporate partners and local businesses using that same 3D Printer to upcycle plastics into park benches, tiny homes, and sheds all around Charlotte.
Envision Charlotte’s biggest suggestion for transitioning into a more sustainable company is to make it everyone’s job. If every employee is involved in these efforts and goals, it will spill into a change within the company as a whole. Forward-thinking corporations are also building sustainability into employee benefits packages. This could be as simple as a monthly $30 stipend which the employee decides how to use to contribute to sustainable efforts. Eco-friendly options such as composting, bike sharing, or electric scooters, are among some of the ways employees can utilize their sustainability benefits in the Charlotte community. From there, corporations can track how many pounds of waste was diverted from a landfill, quantify carbon emission reduction, engage employees in their companywide sustainability goals, and attract and retain top talent. Not only will efforts like these help your employees think differently, but they can also be used towards your ESG reporting and aid in the transition to a more circular economy in Charlotte.
A Consultative Approach to Sustainability
CoVest services provider, Republic Services, is one of the largest waste and recycling companies in the United States, and they rounded out our dynamic sustainability panel. Republic Services has recently adopted a newly created division, which focuses on enhancing existing sustainability and recycling programs within corporations. By identifying additional cost savings opportunities, creating more efficiencies and even diverting waste products from landfills, Republic Services will help organizations find ways to improve their sustainability and recycling programs. The objective is to help people get better at recycling every step of the way, through reducing, reusing and recycling.
Republic Services takes a consultative approach to sustainability. Actions like visiting individual company facilities, providing site assessments and audits, and evaluating a company’s current waste and recycling efforts, provides Members with a tailored approach based on their unique business needs. This “boots on the ground” approach provides detailed insights into a company’s waste stream, addresses site challenges and provides the expertise for Members to enhance their sustainability practices, which will result in greater long-term, sustainable improvements. While a lot of companies are already starting to adopt new sustainable programs, Republic Services is passionate about finding ways to improve them and creating powerful sustainability relationships.
An Investment for the Planet
In order to implement more efficient sustainability initiatives, companies need to get a holistic view of their companywide sustainability practices and work downstream. Evaluating and organizing your various waste products to get a clearer picture of your challenges and relaying those challenges to your procurement/operations departments is a step towards identifying more efficient and sustainable practices. Cost tends to drive most actions within a company, but corporations need to take a step back and look at the bigger picture for the environment when discussing this new pressing issue of sustainability and realize creative solutions can reap long term gains.
As sustainability continues to come into focus for corporate strategies, procurement can play a key role in shaping by implementing more sustainable purchasing practices, identifying cost efficiencies by partnering with additional teams, gain more insight into their value chain by evaluating suppliers, and use innovative approaches to reduce their waste streams. Remember, this is not only an investment for your company but an investment for the planet.
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