Efficio: Implementing Sustainable Procurement Practices

Edward Cox, Director and Head of Sustainable Procurement at Efficio has been with the company for over eight years and most recently as Director and Head of Sustainable Procurement.

As a passionate advocate for procurement as a force for good within sustainability and ESG, Edward has lead Efficio's sustainable procurement practice. 

Focusing on empowering procurement functions to deliver pragmatic and tangible ESG improvements. While also leading teams at Efficio to deliver world-class results for organisations across Europe and the Middle East when it comes to procurement and supply chain management.

Efficio has over 1,300 staff across North America, Europe, the Middle East and Asia. 

It partners with clients to identify, deliver and sustain business improvements by managing supply chain risk, resilience and sustainability, reducing costs and transforming their procurement functions.

Combining the human intelligence and deep expertise of our consultants with its proprietary data insights platform to empower its clients to compete more effectively, from strategy through to delivery, in an increasingly complex environment.

Efficio supports blue chip multinationals, public sector organisations, private equity firms and their portfolio companies and SME clients around the world to deliver increased value from procurement and supply chain management.

Edward spoke to Procurement Magazine about implementing sustainable procurement practices. 

What are the key regulatory frameworks and government standards that businesses need to be aware of when implementing sustainable procurement practices?

“Globally, governments are tightening corporate sustainability reporting requirements to increase transparency and help investors analyse the sustainability performance of businesses.

"There are currently two main sustainability reporting standards being used across the globe; the Corporate Sustainability Reporting Directive (CSRD) in Europe and the International Financial Reporting Standards’ (IFRS) Sustainability Disclosure Standards, of which there are two standards that have been issued to date. 

“When implementing sustainable procurement practices businesses should be aware of the requirements of both, as procurement will be critical for compliance. Examples of sustainable procurement practices that will be required for compliance include:

• Procurement policies that support climate change mitigation
• Actions taken to engage suppliers to increase the circularity of products and materials
• Emissions calculated using data from suppliers and what % of Scope 3 emissions this covers
• Training of the procurement / supply chain workforce on sustainability
• Assessments of the vulnerability of suppliers to sustainability-related risks, notably climate

“There is also a global trend towards mandating businesses to disclose more transparently on the issues of forced labour and environmental impacts. For example, the EU’s new Corporate Supply Chain Due Diligence Directive (CSDDD) will ensure companies identify and address adverse impacts on human rights and the environment across their entire value chain.

"This Directive entered into force in July this year, and member states will now have until July 2026 to transpose the Directive into national law. Again, procurement will play a critical role in understanding the upstream impacts, working with suppliers and establishing mechanisms to reduce these impacts.”

How can organisations effectively integrate sustainability criteria into their supplier selection and evaluation processes?

“Procurement requires the optimisation of what we call demand-side and supply-side factors - essentially what you buy and how you buy it. The demand side is more complex as it requires organisations to challenge what they’re trying to achieve and what they need, how much of it etc. It requires greater cross-functional collaboration and innovation.

"This is even more important when considering sustainability as, if we consider packaging for example, it’s not just about buying from the supplier acting more sustainably but changing materials and reducing materials or eliminating materials all together.

"There are knock-on effects too: the volume and weight of packaging will affect energy consumption through the logistics network right down to the emissions and impact at disposal.

“As such, sustainability in procurement requires longer-term planning and greater attention than traditional sourcing. Organisations must start with robust category strategies that plan for the requirement over multiple years and how it will change and improve. This should include market analysis and supplier engagement to promote better supply options.

"Only from this point can sourcing strategies be agreed and only at this stage do we start to define the specifications and questions we must ask in tenders, ensuring sufficient weighting for sustainability goals and robust analysis from stakeholders who understand and can interpret supplier responses.”

What strategies can procurement leaders employ to balance the three pillars of sustainability (environmental, social and economic) in their procurement decisions?

“Sustainability needs to be built into procurement because the supply chain has the largest impact on an organisation’s sustainability. But which facets of ESG should be considered should be cascaded down from a corporate sustainability strategy that aligns with the broader business strategy. Through a materiality assessment, organisations will determine what’s important to them and their internal and external stakeholders.

"Do they want to major in supporting the local economy or farmer welfare or GHG emissions? Often, they will refine this down to the top five to eight factors.

“Procurement teams must then cross-reference this with their spend areas. Spend on raw materials or produce may focus on biodiversity and water usage. Spend on building supplies may focus on Greenhouse gas (GHG) emissions. Spend on facilities services may focus on diversity and worker welfare.

“The key is, within each procurement, to understand which material ESG elements can be positively impacted and then focus on the top one or two only. If your procurement function typically weights 10% to sustainability within sourcing activity, for example, the worst thing you can do is dilute that 10% across 5 or more elements by which time each of them becomes insignificant and unlikely to influence a procurement decision away from core cost and technical factors. “

How can businesses develop and implement a comprehensive sustainable procurement policy that aligns with both internal goals and external regulations?

“Too often, sustainability is treated as a vertical, with minimal horizontal integration across different business functions, including procurement. Procurement and sustainability teams have traditionally had different objectives, but breaking down siloed ways of working is a must for aligning the two functions.

“Regular face time with sustainability teams allows procurement teams to align with their objectives and understand where they are best placed to provide support. This establishes a bidirectional feedback channel for subject matter expertise and also allows teams to align short-term objectives (like annual procurement pipelines) with longer-term sustainability planning (such as for 2030 and 2050 goals).

“Existing procurement policies can be aligned with internal goals and regulatory requirements, minimising the need for new policies and creating harmonisation across the business. We’ve seen this done well at a couple of organisations, notably where procurement and sustainability have a good working relationship and collaborate regularly.”

What are some practical steps that procurement teams can take to monitor and improve the sustainability performance of their supply chain?

“At Efficio, we understand that sustainability in procurement has historically been overlooked but this is rapidly changing. So, it’s important that procurement teams understand the steps they need to take to deliver tangible impacts to environmental, social and governance objectives.

“It starts with knowing what these objectives are. Be sure you’re clear on your company’s commitments and prioritise actions accordingly. Procurement teams should segment objectives based on importance – with the highest priority given to external commitments – and the potential for procurement to drive change. Then it is about connecting with the organisation’s sustainability leads and working as one team towards the agreed objectives. 

“Training and upskilling are other factors that shouldn’t be overlooked by procurement teams. Everyone involved in the sustainability performance of the supply chain must be equipped with the skills and knowledge to respond appropriately to a more sustainability-focused business. 

"The management of supplier relationships is also extremely important. Keeping suppliers included in sustainability processes and goals will help organisations understand potential supplier challenges and how to best support them. We have seen excellent examples of this where suppliers are briefed on the business's objectives so they can adjust their own strategy accordingly. 

 “To be successful in delivering the agreed objectives, procurement teams must also ensure they embed these within policies and processes used in procurement’s business as usual activities. It will take some time for procurement teams to shift from a two-dimensional approach of cost and quality to a three-dimensional one incorporating sustainability.

"That said, if done correctly, sustainable procurement builds on, rather than completely overhauling, existing processes, which means the transition can be smoother. We have seen this work well when current procurement policies are updated to include the sustainability objectives, where existing tender scoring mechanisms are weighted on sustainability metrics, and when suppliers are given the space to propose alternative, more sustainable solutions as well as traditional products/services.

“Finally, data – whilst crucial – this shouldn’t stand in the way of success. Teams can run successful projects that are headed in the right direction without being derailed by an inability to measure sustainability improvements perfectly. For example, kicking off projects like rolling out electric vehicle fleets (even if you can’t fully quantify the emissions reduction) can serve as a compelling sustainability success story for the business. As the business matures, the data landscape will typically evolve in tandem.

Less granular emissions calculation methodologies, such as spend-based approaches, can be gradually replaced by supplier-specific data or activity data. This enhanced data can then be used for tracking and reporting on KPIs – feeding back into the planning process.”

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