Sustainable Procurement Aspects
"The difficulty lies not in new ideas, but in escaping from the old ones" J.M.KeynesSustainable procurement includes all aspects of Traditional Procurement + Financial Responsibility considerations + Environmental Responsibility + Social Responsibility
Improvement in financial performance is an important component of sustainability for an organization.
An organization with poor environmental practices is likely to attract the ire of regulators, customers, the media, NGOs, investors and shareholders, as well as creating poor employees trust and morale.
Improvement in social performance should similarly be an obvious component of sustainability for an organization. Social performance is less tangible and more difficult to measure than either financial or environmental performance, but the symptoms of poor performance are easily recognizable: discrimination, prejudice, bias, exploitation, friction, conflict, corruption, injuries, sickness.
The Guiding Principles of Sustainable Procurement
🌏 Use resources efficiently.
Avoid products whose life cycle consumes excessive resources (footprints of raw materials, energy, water and land). Give preference to products that are recyclable and made from recycled content. Minimize the creation of wastes wherever possible – wastes are all forms of inefficient resource use. Check with your suppliers about the ISO 14001 availability which represents the water, energy management. Consult with S-Guru if you want to develop a more sustainable product with regards to power efficiency, durability, materials etc.
🌏 Protect the environment.
Avoid directly and indirectly creating pollution in all its forms when procuring both goods and services. This applies to the whole life cycle of products and to the whole supply chain. Avoid products that contain toxic substances or consume toxic substances when they are operated because these will also become sources of pollution. Respect nature’s limits.
🌏 Promote social justice.
Avoid financially supporting social injustice in your supply chain through your procurement practices. Actively practice the tools and techniques of ethical procurement to promote justice. Social justice covers human rights, support for the disadvantaged, fair trade, working conditions and living conditions, as well as community and skills development. Behave with integrity in general. Verify if your supplier obtains SA8000, SMETA criteria audit reports or alternative certification.
🌏 Set clear sustainability objectives in each procurement.
Sustainability is a very large and complex subject with many facets. The number of facets is increasing with time as scientific research uncovers more aspects of human impact on the environment. It is therefore not possible to specify products as needing to be ‘more sustainable’. Be clear on your sustainability objectives for each procurement, such as: better energy efficiency, reduced air pollution, maximizing recycled content, or choosing only organic products.
🌏 Reduce sustainability risk to your organization.
Unsustainable practices, such as the on-going consumption of large amounts of fossil fuels, in your organization or its supply chain bring risk to your organization’s operations, brand, reputation and business continuity. Analyze sustainability risk throughout your supply chain and take action to reduce it. Check not only your manufacturing base, but also the entire supply chain including service providers.
🌏 Make financial decisions on a life cycle cost basis wherever feasible
For many products, and most capital assets, the majority of the cost of ownership is in the operation and maintenance of the product, not in the initial purchase price. Basing your financial decisions solely on the initial cost of a product therefore usually means ignoring the majority of the financial impact to your organization arising from the use of that product. Use life cycle cost calculations as the basis for your financial decision-making wherever this is practical.
Contract award decisions on the basis of "best value". Contract award should take into account other non-financial or indirect considerations such as the quality of the product, its durability, and its desired sustainability attributes (for example ability to be recycled, low noise, low water consumption, energy efficiency, etc.). These weighted factors add up to what is commonly called ‘best value’. The concept of best value recognizes that environmental impact, social impact and human health impact are all worth something. Consult with S-Guru regarding product testing arrangements at each step of the development & production to ensure products quality and durability.
🌏 Work with your suppliers.
Short-term price-based contracts create suppliers with no loyalty, no incentive to co-operate to mutual advantage and no willingness to invest in innovation and product research in the area of interest. Competitiveness and longevity require long-term strategic partnerships with key suppliers. Treat the supply chain as an interacting whole and make decisions that are in the greater interests of the health and longevity of the whole chain. Part of that health is to ensure that there is sufficient diversity in the chain.
🌏 Take ownership of and responsibility for your environmental and social impacts.
Build credibility and reputation by publicly acknowledging your environmental and social impacts.