In the face of rising costs, has sustainable procurement become little more than a pipedream? Ollie Brand, CEO at Zupa, investigates…
In the quest for more sustainable procurement, there have been many positive changes made, from the plastic packaging tax, to minimising wastage and building more sustainable supply chains. Although companies have begun to take more progressive strides towards tackling climate change, there is still much to be done.
The UK has already put in place mechanisms to increase sustainability and social value to deliver economic, social and environmental outcomes from the procurement of goods and services – these include the Public Services (Social Value) Act 2012, the UK Climate Change Act, Equality Act, Modern Slavery Act and others.* In line with these, firms will need to effectively mobilise procurement to deliver on relevant priorities including targets to achieve the Government’s net zero strategy, which sets out policies and proposals for decarbonising all sectors of the UK economy in order to meet its net zero target by 2050.
Here are five key considerations I feel we need to address to achieve sustainable procurement:
- Supply chain traceability
It is becoming more important for companies to accurately track the environmental footprint of the products they source as well as to understand from an ethical perspective where items originate from. This level of transparency and visibility requires effective data capture, a focused strategy and robust processes. But first businesses need to identify what information they need to capture across their entire supply chain, understand how they can best collate all this information in the right way, and then understand how to use that data effectively.
- Tracking on provenance
There is often a misconception that goods originating from destinations further afield are worse in terms of environmental footprint. Yet, calculating carbon footprint is far more complex than simply looking at the ‘air miles’ travelled. For example, a product’s carbon footprint may be smaller if it is being farmed and shipped on a larger scale from afar, as opposed to being farmed and shipped on a smaller scale at destination closer to home.
We see innovations in procurement technology already starting to help firms to understand related factors such as the length of travel for deliveries, the sustainable impact, different delivery methods as well as considerations such as energy consumed for storage/refrigeration etc. Next generation advances in technology will need to encompass the entire spectrum of required functionality from a sustainability perspective.
- Labelling and measuring carbon impact
Many businesses have questioned the future of labelling and the sustainability challenges faced in the future. It is not unlikely to assume that measuring carbon impact will one day become a mandatory requirement, just as allergen and nutritional information are today. This will have a knock-on effect, shaping industry behaviours and impacting organisations that only produce products under a pre-specified number of carbon figures, and we will likely see heightened awareness among existing manufacturers, who will be required to change their modes of production and record the carbon footprint in order to comply, such as with palm oil, for example.
- Procurement technology and automation
The only method of capturing comprehensive information, is to record data at every step in the supply chain. The best way to do this is through fit for purpose technology and automation. If this information is captured correctly, it will allow businesses to make more informed decisions and reduce pressure on their teams from an admin and time perspective.
- Customer demand for sustainability
Sustainability is moving to mainstream. There is growing consumer pressure for businesses to track their environmental footprint and for many firms that means via their supply chain too.
Whilst there is a will across the sector for more sustainability, only when it becomes a necessity through legislation and direct consumer spending habits, will we see meaningful change for the future.
As consumers become more eco-savvy they are prioritising brands who walk the sustainability walk. Yet, the Government is making the direction of travel less clear. Whilst their commitment to reach net zero carbon emission by 2050 remains, recent major U-turn on their climate commitments has already seen the deadline for selling new petrol and diesel cars along with the phasing out of gas boilers pushed out to 2050. There has yet to be any announcement regarding its goal to cut emissions from manufacturing by about two-thirds from 2018 to 2035. Hitting this target will require considerable progress, not to mention procurement technologies, which will help businesses to manage the vital route to greater sustainability effectively and efficiently.
Written by Ollie Brand, CEO at ZUPA