Skip to main content
Why is Sustainable Procurement Important?

Why is Sustainable Procurement Important?

from  May 17, 2023 | 4 min read

Sustainability has become a key topic for business in recent years. As the global population grows exponentially and resources become more scarce, it has become evidently clear that companies need to prioritize sustainable practices in their operations to ensure the longevity of their business and to minimize the impact of their daily activities on the planet. 

Sustainable procurement is the process of purchasing goods and services in a manner that takes into account the social, economic, and environmental impacts of business purchases. It involves considering the full lifecycle of products and services being purchased, from their raw materials to their disposal. Sustainable procurement focuses on not only the cost and quality of goods and services, but also ther impact on people and the planet. 

Why is sustainable procurement important?

Environmental Conservation

By embracing sustainable procurement practices, organizations can contribute significantly to environmental conservation. Traditional procurement often prioritizes low-cost options without considering the environmental impact. However, sustainable procurement takes into account factors such as carbon emissions, resource consumption, and waste generation.This approach helps conserve natural resources, protect biodiversity, and mitigate climate change.

Social Responsibility

Sustainable procurement extends beyond environmental concerns and encompasses social responsibility as well. It involves considering ethical aspects such as fair labor practices, human rights, and diversity in the supply chain. By prioritizing suppliers who uphold these values, organizations can promote fair treatment of workers, discourage exploitation, and foster inclusive business practices. Sustainable procurement also supports local communities by encouraging the engagement of small and minority-owned businesses, which can drive economic development and reduce income inequalities.

Risk Mitagation

Another compelling reason to prioritize sustainable procurement is the mitigation of risks associated with supply chains. Traditional procurement often relies on a limited number of suppliers, which can lead to vulnerability in the face of any disruptions or unethical practices. By diversifying their supplier base and conducting thorough due diligence, organizations can reduce their dependence on a single source and avoid potential risks such as supply chain interruptions, and legal complications. Sustainable procurement helps build resilience and enhances business continuity.

Cost Savings

Contrary to popular belief, sustainable procurement is not always synonymous with increased costs. In fact, it can lead to long-term cost savings. By adopting sustainable practices, organizations can minimize waste, improve energy efficiency, and optimize resource consumption. These measures result in reduced operational costs, including lower energy bills, decreased waste management expenses, and improved overall efficiency. Moreover, sustainable procurement practices often promote innovation, driving the development of more sustainable products and services that may offer competitive advantages in the long run.

Meeting Stakeholder Expectations 

In today's interconnected world, stakeholders, including customers, investors, and employees, are increasingly concerned about the impact of their actions and the organizations they associate themselves with, on our planet. Sustainable procurement demonstrates a commitment to responsible business practices and aligns with the expectations of these stakeholders. By actively engaging in sustainable procurement, organizations can enhance their brand reputation, attract environmentally and socially conscious customers, and create a positive image that resonates with stakeholders throughout the entire organization. Which in turn, can lead to increased customer loyalty, improved investor confidence, and a strongly motivated and engaged workforce.

Regulatory Compliance 

As the focus on sustainability intensifies globally, regulatory frameworks are being established to enforce responsible practices. Organizations that fail to comply with these regulations risk facing legal repercussions, financial penalties, and reputational damage. By incorporating

How can businesses prioritize sustainable procurement?

Here are some of the key strategies and takeaway for businesses who want to prioritize sustainable procurement:

  1. Develop a sustainable procurement policy that outlines a company's commitment to sustainable practices and provides guidance on how to implement these practices. 
  2. Conduct a sustainability assessment of suppliers to ensure their sustainability practices and policies are aligned with the ones from the company. 
  3. Prioritize sustainable products and services, this can include products that are made from recycled materials, use renewable energy or have a minimal environmental impact.
  4. Consider the full lifecycle of products and services, from their raw materials to their disposal. 
  5. Monitor and evaluate sustainability performance regularly, including your organization's sustainability goals and of your suppliers.    

In conclusion, sustainable procurement should be a priority to any organization as it is important not only for their businesses but also to society and the environment. It helps reduce the environmental footprint of a company, promote fair labor practices, support local communities, promote innovation, and enhance the overall company reputation. By implementing sustainable procurement practices, businesses can demonstrate their commitment to sustainability and position themselves as responsible corporate entities.

Henrik Leerberg

Vice President, Global Procurement Marketing - Marketing Scanmarket

As Scanmarket's Vice President, Global Procurement Marketing Henrik oversees all marketing activities globally by fueling growth and creating value for both existing and new customers. Henrik has worked in software and electronics businesses throughout his entire career, operating in B2B markets. With more than 25 years of leadership experience from a range of software companies, Henrik has built a solid foundation for a broad business understanding within all aspects from engineering over marketing and sales to administration. Henrik holds degrees in Marketing and Business Administration and in Electrical Engineering.

Request Quick Call

Thank you. We will be in touch shortly.