ESG issues were first mentioned in 2006, in a United Nation’s report. Since 2019 it has gained momentum as organisations have become more aware of the importance of ESG frameworks and how they can gain a competitive edge in the market. In our webinar Sustainable Procurement Strategies: From Integration to Impact we explored how to integrate sustainability into procurement strategies effectively.
During the webinar we covered the following themes -
- Integrating Sustainability Criteria: Learning practical steps to embed sustainability into your procurement processes via case studies
- Enhancing Supplier Collaboration: Discovering effective methods for engaging suppliers to achieve shared sustainability goals.
- Measuring and Tracking Impact: Understanding how to use key performance indicators to monitor and demonstrate the success of your sustainability initiatives.
One of the main reasons why ESG is coming into play now is because regulations are coming into practice and there is an increased investors’ focus as they are increasingly looking at a company’s ESG performance to assess risk and potential returns while consumers are becoming conscious of the environmental and social impact of products that they buy. On the other hand, legally speaking standardisation is important since without clear frameworks, ESG reporting can be inconsistent and difficult to compare. However, the key to a sustainable ESG practice is transparency and accountability.
Furthermore, ESG is a balancing act which goes across multiple departments and procurement in specific is placed within all departments (finance, services, accounting) which gives procurement professionals the opportunity to collaborate with multiple stakeholders across the organisation to work on sustainability goals. One of the main reasons why CEMEX, a Mexican multinational building materials company is implementing net zero emissions is because their customers are requiring sustainability goals and KPIs which has opened more conversations with suppliers.
Another interesting case that was highlighted was, Blackmore’s sustainability initiatives. Blackmore is an Australian health supplements company that started their sustainability reporting in 2016 and by 2020 they were on the path to decarbonise their plants. However, 2023 onwards they have also started looking into sustainable product lifecycle to take it a step further. This clearly states that the risks of not fulfilling an ESG strategy can bring about reputational damage along with loss of customers and revenue or regulatory fines and legal implications to name a few. Contrary to this, is a fulfilling ESG strategy which can help in improved risk management, enhanced brand value and customer loyalty, cost reduction and resource efficiency while creating a positive impact on the society and environment. As the procurement profession keeps evolving, it is important to keep developing your skills which constitutes staying relevant to the industry, enhancing your skillset, driving innovation and efficiency while improving supplier relationships and having an open dialogue about ESG with your peers in the community.
As final concluding remarks, it is important to engage with stakeholders early on and have conversations with them with respect to your ESG goals and initiatives while making sure that you are aware of the legislations and are complying by them to stay ahead of your competitors.
Questions we answered during the webinar from the attendees:
1. How can I convince top management to make sustainability a priority in our procurement processes?
2. What are some starting points for sustainability KPIs I can start at my company?