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Home » Blogs » SCQ Forum » Sustainable sourcing: How procurement can drive positive social and environmental impact

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Marijn overvest

Marijn Overvest is the founder of Procurement Tactics, a company that provides procurement solutions to businesses.. He has over 20 years of experience in procurement & negotiations: including 10+ years within the commercial department of a large global retailer and over five years in online start-ups  business funding.

He has negotiated deals up to 500 million euros and has dealt with 1500 different products delivered by 70 suppliers every year. Additionally, he created over 300+ negotiation plans,  being a sparring partner for procurement managers in their process of creating negotiation plans. 

Sustainable sourcing: How procurement can drive positive social and environmental impact

By prioritizing sustainability and working together with suppliers and stakeholders, businesses can create a positive impact on society and the environment while gaining a competitive advantage.

April 17, 2023
Marijn Overvest
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Sustainability has become an increasingly pressing issue for businesses in recent years, as the global community recognizes the urgent need to address the environmental and social impacts of unsustainable practices. Procurement professionals play a critical role in driving positive social and environmental impact through sustainable sourcing practices, which can reduce risks, increase efficiency and resiliency, enhance reputation, and ultimately contribute to long-term business success.

In this article, we will explore the importance of sustainable sourcing practices and the steps that supply chain professionals can take to integrate sustainability into their procurement strategies.

The Need for Sustainable Sourcing

The negative impact of unsustainable sourcing practices on the environment and society is becoming increasingly apparent. From deforestation and water scarcity to human rights violations and labor exploitation, unsustainable sourcing practices can have far-reaching consequences for communities and ecosystems around the world. Procurement professionals have a responsibility to address these impacts and promote sustainable practices throughout the supply chain.

Moreover, the benefits of sustainable sourcing extend beyond ethical considerations. Implementing sustainable sourcing practices can reduce risks for businesses, such as supply chain disruptions or reputational damage, while also increasing efficiency and resiliency. Sustainable sourcing can also improve stakeholder engagement, enhance brand reputation, and ultimately drive long-term profitability.

Implementing Sustainable Sourcing Practices

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An example where procurement data has enhanced marketing efforts includes monitoring which products are popular among customers and optimizing pricing models to maximize revenue. If you're looking to change someone's viewpoint on an issue or inspire them into action towards something specific, then crafting an article that convinces is critical. Convincing appeal demands clear articulation of arguments plus methods for addressing possible pushback head-on while maintaining persuasiveness interwoven throughout the text through carefully chosen verbiage along the way.

The Benefits of Sustainable Sourcing

Sustainable sourcing practices offer a range of benefits that go beyond ethical considerations. By adopting sustainable sourcing, companies can experience both financial and non-financial advantages, which include:

  • Risk reduction: Sustainable sourcing reduces risks associated with supply chain disruptions or reputational damage.
  • Cost savings: By minimizing waste and inefficiencies in their supply chain, businesses can achieve cost savings and increase efficiency.
  • Enhanced stakeholder engagement: Prioritizing sustainable sourcing can help build stronger relationships with stakeholders such as customers, employees, and investors, who are increasingly expecting businesses to demonstrate their commitment to sustainability.
  • Reputation enhancement: Adopting sustainable sourcing can also enhance a company's reputation and help them stand out from competitors.
  • Long-term business success: Sustainable sourcing practices can contribute to the achievement of the United Nations Sustainable Development Goals, which can drive long-term business success by promoting sustainable development and improving social and environmental outcomes around the world.

Moreover, companies that prioritize sustainable sourcing practices can create a competitive advantage and enhance their brand image which can lead to increased customer loyalty and retention, attracting more investors, and creating a positive impact on society and the environment.

Overcoming Challenges and Barriers

Adopting sustainable sourcing practices can be daunting, especially for businesses that are new to the concept of sustainability. Some of the challenges and obstacles that businesses may encounter include:

  • Limited resources: Implementing sustainable sourcing practices requires a significant investment of time and resources, which can be challenging for small or resource-constrained organizations.
  • Lack of internal capacity or expertise: Businesses may lack the internal expertise or capacity to effectively integrate sustainability into their procurement strategies.
  • Resistance from suppliers or other stakeholders: Suppliers or other stakeholders may resist changes to procurement practices, particularly if they are accustomed to traditional, unsustainable methods.

To overcome these challenges, businesses can take a strategic and collaborative approach, leveraging technology and building internal capacity, and working closely with suppliers and other stakeholders to identify and address sustainability issues. Some key strategies to overcome these challenges include:

  • Building internal capacity: Businesses can train and empower their procurement teams to integrate sustainability into procurement practices.
  • Collaborating with suppliers: Businesses can work closely with suppliers to identify and address sustainability issues, such as improving supply chain transparency or reducing carbon emissions.
  • Leveraging technology: Technology can help businesses monitor and measure their sustainability performance, identify areas for improvement, and track progress over time.
  • Setting sustainability goals: Businesses can set clear and measurable sustainability goals to guide their procurement strategies and track their progress over time.
  • Educating stakeholders: Businesses can educate stakeholders, such as customers, employees, and investors, on the importance of sustainable sourcing practices and the benefits they bring.

By adopting these strategies, businesses can overcome the challenges of implementing sustainable sourcing practices and drive positive social and environmental impact while achieving long-term business success.

Sustainable sourcing is not only critical for long-term business success but also for addressing the pressing environmental and social issues caused by unsustainable practices. Procurement professionals play a key role in promoting sustainable sourcing practices that can benefit businesses by reducing risks, increasing efficiency, and enhancing reputation. Although there may be obstacles to implementing sustainable sourcing practices, companies can take a collaborative approach to overcome these challenges and realize the many benefits of sustainable sourcing. By prioritizing sustainability and working together with suppliers and stakeholders, businesses can create a positive impact on society and the environment while gaining a competitive advantage.

FAQS:

Q: What is sustainable sourcing?

Sustainable sourcing refers to the procurement of goods and services that take into account social, environmental, and economic considerations, with the aim of reducing negative impacts on people and the planet.

Q: Why is sustainable sourcing important?

Sustainable sourcing is important because it can reduce risks, increase efficiency and resiliency, enhance reputation, and contribute to long-term business success. Moreover, it helps address the negative impact of unsustainable practices on the environment and society.

Q: What are the benefits of sustainable sourcing?

Sustainable sourcing practices offer a range of benefits that include risk reduction, cost savings, enhanced stakeholder engagement, reputation enhancement, and long-term business success. Moreover, companies that prioritize sustainable sourcing practices can create a competitive advantage and enhance their brand image, which can lead to increased customer loyalty and retention.

Q: What are the challenges and barriers of adopting sustainable sourcing practices?

The challenges and barriers of adopting sustainable sourcing practices include limited resources, lack of internal capacity or expertise, and resistance from suppliers or other stakeholders.

Q: How can businesses overcome the challenges and barriers of adopting sustainable sourcing practices?

Businesses can overcome the challenges and barriers of adopting sustainable sourcing practices by taking a strategic and collaborative approach, leveraging technology, building internal capacity, working closely with suppliers and other stakeholders, and educating stakeholders on the importance of sustainable sourcing practices.

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