Improving sustainable procurement
During the months of May and June 2021, Procurious and Ivalua surveyed over 470 procurement and supply chain professionals in order to assess the maturity levels of sustainability across multiple supply chains, what impact organisations are driving, and how sustainability can be improved by procurement teams.
The report, named Driving Exponential Impact Across the Supply Chain was published in mid-June.
The results were pretty eye-opening for those conducting the survey and for the organisations that took part in it: around 24% of organisations have not started their supply chain sustainability programs, 39% of organisations are only now beginning, 22% have programs already established, and only 15% have advanced programs in place.
The findings mean that around 62% of organisations are still not investing in supply chain sustainability or are only just starting to now. According to the report: “This is an alarming number considering the advantages that sustainable procurement delivers and the urgent and broad movement toward a more socially-conscious and sustainable marketplace."
Top strategies to increase sustainability performance in organisations
Over 50% of the procurement and supply chain professionals agreed that the pressure to boost green and sustainability performance comes from inside their own organisations – it's the realisation that the right thing needs to be done.
The companies that implemented sustainability programs in the past and are in advanced stages of it experienced an increase in the collaboration and relationship with suppliers while seeing improvements in compliance with legislation and better brand perception by partners and the consumers.
It seems the number one strategy to improving green and sustainable practices within organisations is by collaborating and creating programs directly with suppliers, in a movement to create change for both sides.
After that, the report found that the top three strategies that can create a meaningful impact on sustainability performance were:
- Adding sustainability criteria when selecting suppliers, and for organisations that already have this as criteria, increase the weight of it.
- Have sustainability as a procurement KPI, adjust the current KPIs to give sustainability a larger weight.
- Increase the investment in technology to monitor the improvements made on sustainability, while monitoring possible risks and events that can cause disruptions on the supply chain – especially to monitor the smaller purchases and the suppliers located on the tail spend that also needs to be involved in the sustainability programs as they represent around 20% of most companies total spend.
The challenges for procurement and supply chain sustainability
The moment to increase sustainable programs in procurement and the supply chain is now, but there are a lot of challenges to be overcome by most organisations. The survey by Procurious and Ivalua found that budget is still the main issue for 53% of the professionals.
The other challenges listed by the professionals were:
- Not enough expertise and knowledge on the process
- Lack of technology
- Not enough executive support
- Lack of supplier collaboration
Some organisations also face external challenges when trying to implement green and sustainable programs, but as Alex Saric, Chief Marketing Officer at Ivalua claims: “The research clearly shows a tangible ROI from sustainable procurement programs. When you do it right, it positively impacts everything – sales, talent, risk, reputations and more. This is the way the world is moving, and organisations need to equip their teams to succeed.”
To find out how Maistro's digital procurement solution is enabling organisations to better vet, benchmark and drive sustainability within their supply chains, get in touch.