Why Procurement remains key to ITAD’s ESG success
Ask the Chief Sustainability Officer of any original electronic manufacturer (OEM) and they’ll already be able to tell you what circularity means and the stakes, both for businesses and the planet. They’ll likely have their own thoughts on how to meet impending ESG mandates and how important emissions data and tracking platforms are to making any progress in improving their supply chains. More than that, they’re probably looking out for and continuing discussions with IT Asset Disposition (ITAD) partners who can deliver on downstream data needs. So then, why are changes at these companies so slow to take root – with so few changing their partners and approaches to measuring their ITAD impact?
Education on the benefits of emissions tracking remains important for industry-wide circularity to become the norm. But, at the end of the day, all of that means little if Sustainability and Procurement teams are misaligned, and ITAD partners don’t present them with tangible solutions that fit into a box that can be easily purchased.
Procurement professionals are specifically tasked with securing vendors so, as much as Sustainability leaders, they hold the keys to change. And they can enact change – so long as they can see the clear benefits from both a financial and sustainability perspective, and at the same time cut a PO that makes sense for their organizations. That’s why it’s crucial that, as ITAD asserts its position as a useful ESG data source, Procurement must be part of the earliest sustainability conversations.
In some ways, a lack of alignment between Sustainability and Procurement is understandable. ESG is still relatively new and organizations are still trying to find their way – understanding what’s important to them, where their emissions are coming from and what they can do about it. So, an initial focus on Scope 1 emissions – emissions that a company causes by operating the things that it owns or controls – or even Scope 2 emissions – created by the production of the energy that an organization buys – seems reasonable. By comparison, “indirect” Scope 3 emissions, involving ITAD, customers using the company’s products and suppliers making products that the company uses, are more labor intensive to change and require tracking activities across the entire supply chain. Because of this, it can be hard for a Chief Sustainability Officer and Procurement to align behind whether ITAD is an important part of any emissions strategy they put into action. To make an impact, it really comes down to how large a company's IT footprint is compared to their other emissions emitting activities.
This simple misalignment means missing out on a huge ITAD opportunity. Companies where Sustainability, Procurement and Program Management are aligned have made enormous progress on creating sustainable supply chains, putting them at a tremendous future advantage. It’s not just about the immediate benefits but the cost of successfully creating a system, network and culture of sustainability later on.
Instead, while Sustainability and Procurement may be aligned from a messaging standpoint, they're too often not aligned on finding the best ITAD options – ones that can help them meet their ESG objectives more quickly. And because there is rarely a top-down emissions mandate from a CEO, asking Procurement to seek out all avenues for emissions savings, there’s little urgency or accountability. But that can – and must – change.
Bringing Procurement into the conversation
While change won’t be immediate, there are several things that can be done to convince Procurement to be a more integral part of early ESG ITAD decisionmaking.
Address the pain points
For Procurement, cost is currently a tangible pain point, more so than the need for circularity reporting. Ultimately, if an ITAD partner that produces circularity reporting costs more than a competitor that doesn’t, Procurement professionals will likely choose the latter and sidestep the sustainability reporting conversation altogether. This is not because they don’t care, but because their function is to quantify that value add and determine if slightly higher costs outweigh the benefits of the reporting and transparency. So, ITAD needs to work to communicate that value in a stronger way while also quantifying how over-indexing for cost poses a risk to brand equity.
Getting Sustainability and Procurement together at the same table means being in it for the long haul – slowly making the case for ITAD sustainability data and making headway depending on the importance of certain ESG activities to an organization. The ITAD vendors must continue to be evangelists and spread the word. Afterall, many in Procurement wouldn’t think of emissions savings from the ITAD downstream as meaningful until they hear about it.
The structure of current ITAD RFPs should be reconsidered with ESG success in mind. This means adding industry-wide sustainability sections that are weighted heavily in the overall scoring of the RFP – based around how a vendor reports on the relevant emissions and circularity metrics that are important to the company. This would not only force the ITAD vendors to make better commitments to sustainability but encourage Procurement to take a more hands-on approach to evaluating those vendors.
Right now Sustainability Officers are new to the industry, with big plans for helping their companies make the world a better place. But that doesn’t mean they can do it alone and without the help of other departments that have been entrenched for decades. As they push for progress, they must do it hand-in-hand with Procurement if they hope to find success. The key will be giving Procurement enough tangible reasons to join in.
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