Sustainable procurement has its benefits

Many agencies across the world are adding green initiatives into their supply chains and reaping the benefits sustainable measures can provide. While implementing a program may seem complex or time consuming, considering the positives of more environmentally and socially responsible procurement processes has proven to be a plus for many firms. 

Reviewing current purchasing strategies can help business leaders determine where they have opportunities to slowly phase in new policies that will do more for company growth and the firm's bottom line in the future. Staying aware of the latest sustainability practices, industry techniques and rival initiatives can also help a firm looking to become more competitive.

Developing a reputation as an industry leader 

As consumers become more aware of sustainable initiatives they are taking the time to determine what their favorite brands are doing to help preserve natural resources and help local communities. Because of this, green procurement policies can help a company develop a stronger reputation with current customers and potentially help lure in new purchasers concerned about corporate social responsibility. 

Cost savings opportunities available

A firm that takes the time to incorporate green procurement strategies such as purchasing supplies made of recycled materials or use renewable energy to get raw materials to facilities may find they can cut down on expenses. In addition, governments across the world are taking an interest in seeing businesses operate more sustainably, which could mean new taxes, fines and compliance measures for companies in the future. Seeking the best opportunities to purchase low-cost sustainable products and use less expensive renewable energy sources can help a firm limit costs and stay in line with any green regulations within the countries in which they operate. 

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  1. Responsible Procurement add’s value to the bottom line.
    If not, then you are doing it wrong.

    Marc Day, who is a researcher into Supplier Relationship Management (SRM) has found out that by working close together with the supplier you can on average gain a 23% value increase.

    If you only do pricenegotiations the value increase is only 4 %. Start your closer relationship with the supplier by introducing a Responsible Procurement approach.

    The supply chain is where the ROI an sustainability gets real. It is also what separates “real” sustainability with “green washing”.

    If doing it correctly you will see an improved sustainable value chain effectiveness – which you will see on the financial return and sustainability outcome.

    · Organizations that engage with suppliers at any tier see a 38% increase in their effectiveness.
    · Organizations that has sustainability embedded into their culture see a 24% increase in effectiveness.
    · Organizations that have worked with suppliers and others (such as distributors) as part of quality programs in the past experiences a 22% increase in effectiveness.
    · Organizations that engages with or talk about sustainability with value chain members (and suppliers) see a 21% increase in sustainable value chain effectiveness.
    · Organizations that reward suppliers for sharing expertise and knowledge around sustainability recorded a 17% increase in effectiveness.
    · Publishes and enforces supplier codes of conduct for all tiers (17%)
    · Provides tools, policies or processes to suppliers and value chain partners (15%)
    · Provides suppliers with increased chance to be selected for future works for sharing expertise and knowledge around sustainability (15%)
    · Has a specific functional area responsible for sustainability efforts related to the value chain (14%)
    · Works to highlight the organizations sustainability efforts to attract and retain employees (13%)

    You will se a reduction in operating costs if you:

    · Engage with your suppliers at any tier (46%)
    · Provide suppliers with monetary rewards for sharing expertise and knowledge around sustainability (45%)
    · Provide your suppliers and value chain partners with tools, policies or processes (41%)
    · Educates and creates awareness about sustainability among suppliers and others in the value chain by hosting or promoting sustainability related events (32%)
    · Engaged a third party with specialist in value chain sustainability for assistance in improving the sustainability of the value chain (27%)

    From a report made by ASQ (institute for Supply Management) and others. Based on a survey from 1000 respondents.
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