EcoVadis: Sustainable Procurement Key to Business Growth
Business sustainability ratings provider EcoVadis has unveiled its latest report, the 2024 Sustainable Procurement Barometer, in collaboration with Accenture. It highlights the potential for procurement to drive business value through sustainable supply chain initiatives, positioning it as a crucial player in organisational resilience and growth amid evolving challenges.
Against the backdrop of the pandemic aftermath, coupled with various business and industry risks such as the escalating climate concerns and cost fluctuations, sustainability has emerged as a key factor in reshaping procurement's role. A recent study by Accenture and the United Nations Global Compact revealed over half of CEOs are prioritising visibility into the social impacts of their supply chain, while also encouraging sustainable practices among suppliers. Approximately 33% of companies are actively incentivising Environmental, Social, and Governance (ESG) outcomes within their supply chain.
“Business is at a pivotal juncture where leaders are recognising sustainable procurement’s strategic role for long-term business resilience and growth,” said Pierre-Francois Thaler, Co-Founder and Co-CEO at EcoVadis.
“While many companies are adjusting to this change, the most advanced programmes are continuously tuning strategies and investments to accelerate the transformation needed to thrive in a new era of business that also benefits people and the planet.”
Companies in the early stages of sustainable procurement
The Sustainable Procurement Barometer underscores that many companies are still in the development stages of integrating sustainability into their procurement processes and broader business functions. Only around half of companies have comprehensive visibility into over 50% of their Tier-1 suppliers, with even fewer insights into deeper tiers. Supplier engagement practices remain limited, with less than half of programmes involving suppliers in sustainability assessments. Digital integration of ESG into procurement processes is also low, ranging from 6% to 25% across companies surveyed.
“Financial success and sustainability aren’t mutually exclusive. Embedding sustainability practices with procurement can be an engine for broader enterprise value creation, reducing cost and improving brand reputation and stakeholder relationships,” said Matias Pollmann-Larsen, Accenture’s Global Lead for Sustainable Value Chain.
“Aligning procurement with broader ESG goals makes supply chains not just more compliant but also more agile and resilient overall.”
2024 Sustainable Procurement Barometer: Key Strategies
● Engage suppliers more deeply to accelerate the adoption of sustainable practices. Activities like corrective action plans, carbon reduction, e-learning or innovation programmes drive supplier ESG improvement and produce richer data and insights.
● Integrate supplier sustainability data into your end-to-end procurement approach. Programmes with high integration are three to four times more likely to have strategic-level engagement with C-suite stakeholders.
● Enhance ESG technology and digital tech foundations. Data can be packaged into insights that drive tactical and strategic decisions, ultimately driving more effective and impactful sustainability initiatives.
● Use new tools to gain greater N-tier visibility. Risk and or hotspot mapping can inform decarbonisation priorities, pinpoint risks and inform engagement strategies and investments across responsible sourcing practices.
● Engaging internal and C-suite stakeholders with sustainable procurement data is critical to realising benefits and supporting programme expansion. Between 72% and 93% of leaders are able to strategically engage or operationally inform critical business functions, such as CFO/finance, sales, product design, operations, risk and compliance, with their supplier ESG data and insights, nearly double the rest of the sample.
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