SUSTAINABLE PROCUREMENT BEST PRACTICES - Insights from Unilever, Apple, and Walmart
Sustainable procurement is becoming increasingly crucial as organisations worldwide recognise the need to balance economic performance with social and environmental responsibility. Implementing sustainable procurement practices can help companies reduce their carbon footprint, improve supply chain efficiency, and foster positive community relations. Here are ten best practices for sustainable procurement, backed by insights from reputable journals and news outlets, and illustrated with examples from well-known global companies that have created media buzz and had a lasting impact.
1. Develop a Sustainable Procurement Policy
Creating a comprehensive sustainable procurement policy is the first step towards embedding sustainability into your procurement processes. This policy should outline the organisation’s commitment to sustainability, set clear objectives, and define the criteria for sustainable sourcing.
Example
Unilever's Sustainable Living Plan has gained significant media attention for its ambitious goals and transparent reporting. The plan targets zero deforestation, ethical treatment of workers, and fair business practices throughout their supply chain. Unilever's commitment to sourcing 100% of its agricultural raw materials sustainably by 2020 was widely covered and praised in the media .
2. Conduct Supplier Assessments
Regular assessments of suppliers' sustainability practices are essential to ensure compliance with your sustainability standards. This includes evaluating their environmental impact, labour practices, and ethical standards.
Example
Apple's Supplier Responsibility program has been highlighted in numerous reports for its stringent supplier assessments and commitment to improving working conditions. Apple's annual supplier responsibility progress reports detail their efforts and outcomes, which have been widely discussed in tech and business media .
3. Implement Life Cycle Costing
Life cycle costing (LCC) considers the total cost of ownership, including initial costs, operation, maintenance, and disposal costs. This approach ensures that procurement decisions account for long-term environmental and economic impacts.
Example
The UK government’s initiative to implement life cycle costing in public procurement has been a model for other nations. The practice aims to achieve value for money by considering environmental and social costs over the life of projects, garnering attention from sustainability-focused media outlets .
4. Engage in Collaborative Partnerships
Collaborating with suppliers, industry peers, and non-governmental organisations can enhance sustainable procurement efforts. These partnerships can drive innovation and improve sustainability across the supply chain.
Example
The partnership between WWF and IKEA to promote responsible forestry has been widely covered. The collaboration focuses on improving forest management practices and increasing the supply of certified wood, significantly impacting IKEA's supply chain and environmental footprint.
5. Prioritise Local Sourcing
Sourcing locally can reduce transportation emissions, support local economies, and ensure fresher products. This practice aligns with the principles of sustainability by minimising environmental impact and fostering community development.
Example
Tesco’s local sourcing initiative in the UK supports over 1,500 local suppliers, reducing food miles and supporting local economies. This initiative has been featured in various news articles highlighting Tesco's commitment to sustainability and community support .
6. Use Renewable Resources
Opting for renewable resources over non-renewable ones can significantly reduce the environmental footprint of procurement activities. This includes using recycled materials and sourcing from renewable energy suppliers.
Example
Patagonia's commitment to using recycled materials and renewable energy in its supply chain has been extensively covered in environmental and business media. Their innovative use of recycled polyester from plastic bottles is a standout example of sustainable procurement making a tangible environmental impact .
7. Promote Supplier Diversity
Supporting a diverse supplier base can lead to more innovative solutions and foster economic development in underrepresented communities. Diverse suppliers can offer unique perspectives and contribute to sustainable practices.
Example
IBM's supplier diversity programme, which spends over $1 billion annually with diverse suppliers, has been recognised for its impact on fostering economic inclusion and innovation. This initiative has been highlighted in various business and trade publications as a model for inclusive procurement practices .
8. Invest in Supplier Training
Providing training and support to suppliers can help them improve their sustainability practices. This investment ensures that all partners in the supply chain are aligned with your sustainability goals.
Example
Nestlé's Farmer Training Programmes, which focus on sustainable agricultural practices, have been featured in numerous sustainability reports and news articles. These programmes cover water management, soil health, and biodiversity, helping suppliers adopt more sustainable farming methods .
9. Monitor and Report Progress
Regular monitoring and transparent reporting of sustainability initiatives are critical for accountability and continuous improvement. This practice helps organisations track their progress and make necessary adjustments to their strategies.
Example
Coca-Cola’s annual Sustainability Report, detailing progress on various sustainability goals such as water stewardship and packaging innovation, has been widely covered in the media. This transparency ensures accountability and stakeholder engagement, highlighting Coca-Cola's commitment to sustainable practices .
10. Innovate with Sustainable Technologies
Adopting innovative technologies can enhance sustainability in procurement. Technologies such as blockchain, IoT, and AI can improve transparency, efficiency, and traceability in the supply chain.
Example
Walmart’s use of blockchain technology to trace the origins of its produce has been a game-changer in the retail industry, improving transparency and reducing food waste. This initiative has been extensively covered in tech and business media, showcasing Walmart's innovative approach to sustainable procurement .
Implementing sustainable procurement practices is essential for organisations aiming to reduce their environmental impact and promote social responsibility. By following these best practices, companies can achieve significant sustainability goals, foster positive supplier relationships, and enhance their overall business performance. Sustainable procurement is not just a trend but a necessity for future-proofing businesses and contributing to a sustainable global economy.