The Role of Sustainable in Supply Chain and Procurement

Integrating sustainability into supply chain and procurement processes is no longer just an option but a strategic imperative for organisations worldwide.

With evolving regulations like the EU Corporate Sustainability Due Diligence Directive and the UK Procurement Act 2023 demanding greater transparency and accountability, there are significant reputational and economic risks for companies that lag in sustainable practices.

Ben Carter, a Principal Consultant in the UK for Turner & Townsend, dives deep into the transformative impact of sustainable procurement on both supply chain decarbonisation and compliance with regulatory mandates.

He expresses concern that while some companies are proactively addressing these challenges, many are still in the early stages of their sustainability journey.

Ben states: “With net-zero commitments high on the agenda, some companies are quickly tackling the issue and working to understand their supply chain emissions and wider social value. Others are early on in this journey.  

“The majority, currently, don’t go far enough. To avoid falling behind peers and wider legislative change, now is the time for businesses to act.”

Transformative Effects of Sustainability

By embedding sustainability in their core strategies, organisations can mitigate risks associated with resource scarcity, climate change and regulatory shifts.

Sustainable procurement practices not only reduce operational costs and boost efficiency, but they also strengthen the resilience of value chains and enhance supplier relationships.

Companies reporting strong financial performance are often those where investors recognise a sincere, long-term commitment to sustainable operations.

For corporates, staying abreast of the latest environmental, social and governance (ESG) regulations is crucial and transmitting this knowledge throughout the organisation is equally important.

"Sustainable procurement must be integrated into the company’s core and aligned to its overall strategic vision," Ben continues. "For example, supporting suppliers to build their ESG knowledge base and ensuring teams are equipped to hold the supply chain to account if issues are found. 

“Many companies are already doing parts of this. But they could be doing it better, more strategically and more consistently.   

“Furthermore, proper integration is also not a ‘one time’ activity – it requires continual reassessment, especially given the frequently changing regulatory picture.”

New Regulatory Landscape

Recent years have seen a shifting regulatory framework, demanding more stringent sustainability and reporting standards across various sectors.

Ben points out the significant global impact of 2024's 'super-election year' on ESG legislation, noting that "decarbonisation deadlines that once appeared distant are now closing in."

This shift has compelled many organisations to pivot from purely economic focuses towards incorporating sustainability and diversity, aligning more closely with recent procurement regulations like the EU’s Corporate Sustainability Due Diligence Directive, the National Procurement Policy Statement and the Procurement Act.

Particularly, The Procurement Act 2023, effective from 24 February 2025, prioritises sustainability and social value within supply chains, advocating for more equitable business practices and heightened competition, transparency and innovation.

It encourages organisations to consider ethical labour practices, environmental impacts and community engagement, aligning business operations with broader UK sustainability goals.

Overcoming Sustainability Challenges

The growing demand from consumers and stakeholders for greater sustainability and accountability necessitates that businesses address common challenges such as cost pressures, lack of supplier transparency and stringent regulatory compliance.

Leveraging technology and data analytics for tracking sustainability metrics, integrating sustainable goals into procurement policies and fostering supplier collaboration through training are essential strategies.

Ben concludes with a crucial reminder for businesses: “Sustainable procurement must become a core part of business operations, as the need for a robust strategy will only increase in years to come.  

The solutions are straightforward, but it will take leadership buy-in to put the right priorities and processes in place. The risks of falling behind only make the reward for action even greater.”

Explore the latest edition of Procurement Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today. ​​​​​​​

Procurement Magazine is a BizClik brand.