Jul 2, 2021

The Sustainable Procurement Pledge, Uniting Our Powers

SPP
Sustainability
sustainableprocurement
ESG
7 min
The Sustainable Procurement Pledge, Uniting Our Powers

“It’s awe-inspiring to wake up and know that there are so many others out there like me who want to design and build a better world, and are using supply chains to make it happen”, Sheri R. Hinish, The Supply Chain Queen, SPP Ambassador

“The Sustainable Procurement Pledge has been playing a fundamental role in driving conversation over the past year and has provided thought leadership in a domain which is developing and changing at a rapid pace.

Whilst no one company or individual has all the answers, as a community we’ve already seen over 5000 people collaborating, sharing insights, wisdom, pragmatism and most importantly, case studies. These case studies and examples of projects that have gone well (or not) provide a huge advantage to those who need to figure out how to improve the status of sustainability in procurement teams,”- Seb Butt, SPP Ambassador and European General Manager, Craft.co

The Sustainable Procurement Pledge:

 

Standing up for people and our planet.

I fully understand the criticality of climate change and the need for me to become active. I pledge to do my best to stop exploitation of nature and human beings, environmental pollution, rising inequality and injustice. I will act against modern slavery, human trafficking, child labour, corruption and bribery while upholding business ethics and law-abiding behaviour.

Together we will change the world.

I am convinced that all of us involved in Procurement can make a difference by joining forces to accelerate the creation of a just and low-carbon emissions world by contributing to the UN Sustainable Development Goals. I will team up with my Procurement colleagues, my Procurement networks, academics, NGOs and government bodies to exchange on and advance responsible business behaviour.

Starting with myself.

I commit myself to lead by example and include sustainability as part of my overall mindful vision and values. I will integrate sustainability aspects into my everyday Procurement decision-making criteria and work with my colleagues and suppliers to drive lasting improvements.

Sharing my knowledge and listening to others.

I will actively share my sustainability knowledge while keeping confidentiality obligations and antitrust rules in mind and always collaborate with all involved stakeholders on our shared mission. I will remain open to the advice and proposals of my peers.

Leaving the right legacy.

I pledge to raise concerns in case of inappropriate business behaviour or when I observe unsustainable practices. I fully respect the principles of the UN Global Compact and other international standards and agreements. I am determined to ensure that Procurement leaves the legacy of protecting a sustainable planet for us and future generations.

Tasked with the job of procuring goods and services, procurement professionals hold a unique power to change the world. However, as the brilliant Spiderman once said, with great power comes great responsibility. SPP is taking that responsibility to heart.

The Sustainable Procurement Pledge aims to unite the efforts of procurement leaders in reaching The 2030 Sustainable Development Goals (SDG). By establishing frameworks and best practices, SPP looks to remove the friction between procurement professionals and more sustainable supply chains. 

This is the opposite of greenwashing. It's grassroots, guerrilla warfare against climate change. And I'm there for it, literally having attended their last Zoom meeting. I then set up a call with the Chair of The SPP, Oliver Hurrey to find out how they got here and where exactly they think they're going.

When I jump on the call, at first, all I see is his picture, and then suddenly, it looks like he's filming an HGTV reality show. He's standing out front of his house, which seems to be going through some major renovations.

Over the noise, Oliver filled me in. "A little over a year and a half ago, during the time of climate strikes, Thomas Udesen, CPO at Bayer and Bertrand Conquéret, [President of Henkel's Global Supply Chain B.V. and Global CPO of Henkel AG & Co. KGaA.] got together and felt that they, and procurement as a whole, could do more to help beat the sustainability and responsibility crisis. They felt that there was a need to encourage, empower and enable procurement professionals to elevate their work in sustainability and add more value to their business, all of these good things that humans could and should be doing while doing more for the people on the planet as well.

Oliver then joined Thomas and Bertrand in their mission, leveraging his 16 years spent building, running and advising collaborative initiatives in sustainability to help bring the concept of The Sustainable Procurement Pledge to fruition." It's an opportunity for procurement professionals to make a personal and professional pledge to embedding sustainability and responsibility into their procurement practices. We also try and help them remove all the excuses as to why they can't achieve that pledge. My boss won't let me. I don't know what tools to use. What is a circular economy?

"We wanted to knock down all of the reasons why an individual professionally can't start to embed sustainability and responsibility into procurement's ways of working. That was the principle. We started with a group of Thomas and Bertrand's CPO friends. There were about 20 of us on a call. The 8th meeting held on May 11th had nearly 1500 people in attendance. Fast forward 18 months or so to today, and we've had a pro bono group of volunteers that have been meeting every Wednesday night with Thomas and Bertrand, and effective this month, we are now a formal global non-profit organisation. 

"It's accelerated rapidly. In addition to the approximately 1500 that are now turning up to the Zoom meetings, we have developed an online community of about 4,000 professionals. We also now have our own website. And since we are officially a not-for-profit, we're looking to raise funds." SPP's goal is to recruit 1 million procurement professionals as ambassadors by 2030.

"Ultimately, it's about getting people together across the value chain in procurement to make sure that everyone is singing from the same hymn sheet about how to make it easier to embed sustainability and responsibility into procurement."

The 8th SPP Ambassadors meeting challenge was defining metrics for sustainable procurement. Lewis Howard, Transformation Director at GSK, Alexandra Tarmo, Head of Partnerships & Social Procurement at Unilever and Sonia Prey of the SPP team, but formerly of Liberty Global Director of Procurement Excellence, were there sharing their insights on how teams can use metrics to drive sustainability and responsibility.

During the meeting, everyone broke off into groups, which is when I skidded away, afraid I would have to answer for something. And so I ask Oliver about the groups (stick with him, he gets there).

"I have a Google doc of about 187 different sustainable procurement initiatives that exist in the world right now. It's an extraordinary number, across industries and across issues. The key difference of what we're doing here is empowering all of those initiatives, but not by helping companies or organisations as such. We're helping the procurement professionals. It's very much about helping individuals collectively. 

"They need to be able to understand what best practice might be, but also to feel part of the community, part of a movement. It's essentially a peer group. You're far more likely to embed something you've heard from a peer rather than someone with an agenda. That's the principle. 

"So we break out over 500 people into groups of five and allow people to meet each other, understand what their challenges are and bounce off each other. We try to create opportunities for those unusual collaborations and get people from all over the world. Almost 150 different countries were in the last meeting, which is extraordinary."

"Ultimately, we're a not for profit. So we are absolutely guided by the individuals. Our model is to gain grant funding. So we don't lean one particular way or another. We are driven by what the professionals want us to do. And I think that's important and unique."

If you haven't yet taken The SPP Pledge, perhaps it's time you do so. The next meeting is scheduled to be held on July 7th and will be tackling the challenge of circular thinking. Now an official non-profit, SPP is looking for funding. If you've got the coin, and a heart, give them a call.

 

Check out what Seb Butt, SPP Ambassador and European General Manager at Craft.co has to say about how SPP is driving a global conversation around embedding sustainability in procurement and supply chain.

 

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Jul 24, 2021

A Watershed Moment for Sustainability Commitments

Vizibl
ESG
Sustainability
sustainableprocurement
Mark Perera, CEO, Vizibl
5 min
Mark Perera, CEO of Vizibl discusses the Royal Dutch Shell climate commitments and how the ruling has sent ripples through the oil, gas, and energy sector

Last month saw a landmark ruling where Royal Dutch Shell was instructed to significantly step up its 2030 climate commitments and slash absolute emissions by 45% compared to 2019 levels. This ruling represents a considerable advance on Shell’s stated aim to cut 45% of its emissions intensity compared to 2016 levels by 2035 – a target which provided leeway for increasing emissions as long as the relative carbon emitted per unit of energy produced fell. Now, this imposes a much larger climate obligation on Shell in calling for an urgent absolute reduction.

 

A ruling that sent ripples through the oil, gas, and energy sector

A watershed moment, this ruling is sure to cause significant alarm amongst fellow oil and gas giants who recognise – for perhaps the first time – that national courts can compel organisations to accelerate their reduction of harmful emissions under the Paris Agreement. Not only does it have "far-reaching" consequences for Shell itself and may even curb the potential growth of the company, but the decision is also likely to set a legal precedent for other energy companies and corporations. According to Thom Wetzer from Oxford University, who heads up the sustainable law programme: “all companies in the energy industry and all heavy emitters will be put on notice and have to accelerate their decarbonisation plans.”[1]

This court mandate applies to not only the Shell group’s own operations but notably also to all the suppliers and customers of the group – strongly implying that Shell is being asked to tackle its Scope 3 emissions. Consequently, it is clear that Shell cannot meet the ruling’s demands alone; to make an impact across all carbon emissions scopes, Shell and other large businesses must immediately look towards forging new, productive partnerships with supplier stakeholders. Failing to do this not only means missed targets and mounting legislative action but also the reputational damage that this will cause to its brand and the company.

 

Activist investor warns of existential business risk

Reports on the Shell ruling were almost immediately followed by news of a coup attempt in American oil and gas corporation Exxon Mobil. Due to concerns surrounding Exxon’s strategic direction, hedge fund Engine No. 1 ousted sitting board members, stating that the climate crisis poses an "existential threat to the business", which the board has been reluctant to confront.

This small hedge fund accused Exxon of "a failure to take even initial steps towards evolution" and of "obfuscating rather than addressing long-term business risk", partly due to a historical lack of energy industry experience in Exxon’s board. This signalled an imminent shift in the company’s sustainability strategy, which was well received by the market, with Exxon’s shares rising 1.2% the day after the event.

 

The drive to reduce Scope 3 emissions

And if that wasn’t enough of a shakeup, this was followed by American multinational energy corporation Chevron’s shareholders voting 61% in favour of a proposal to cut Scope 3 emissions at their AGM, signalling frustration with the company’s slack approach towards climate change. Chevron has thus far failed to match its competitors’ net-zero targets with any commitments of its own.

For those less familiar, corporate emissions fall into three categories: Scope 1, 2, and 3. Scope 1 covers emissions from sources that an organisation directly owns or controls. Scope 2 refers to emissions from purchased electricity, steam, heating, and cooling that the reporting company consumes over the course of its operations. And Scope 3 is everything else – all other indirect emissions that occur within an organisation’s value chain, both up and downstream.

Why is this significant? Until now, Scope 3’s heady combination of difficult-to-manage and thus far easy-to-ignore has led large companies to abdicate responsibility for their value chain and sweep its emissions under the carpet. However, the Shell ruling indicates that this approach is no longer viable for big business. With courts stepping in and dictating climate policy to corporations as well as governments, the pressure is mounting on all heavy emitters to tackle their true impact and reduce Scope 3 emissions.

As organisations like Shell, Chevron and Exxon are considered responsible for the actions of their entire ecosystems, sustainability performance becomes contingent on supplier behaviour. The clearest example of this lies in Scope 3 emissions which, for many organisations, considerably exceeds the CO2 they emit directly.

Therefore, the time for green-washing and lip service is now over as pressure mounts from all stakeholder groups for large corporates to take decisive action on sustainability in the supply chain. However, businesses cannot turn promises into concrete progress without actively collaborating with stakeholders across the value chain.

 

For every five weeks that pass, we lose 1% of the decade

2030, the deadline for achievement of UN SDG-related climate commitments, is fast looming, and with every five weeks that pass, we lose 1% of the decade. The imperative to take immediate action has never been clearer. It’s now down to procurement, wider business leaders, and their associated supplier ecosystems to put sustainability strategy into action by:

 

      Defining, aligning, and communicating their corporate sustainability goals to focus suppliers, partners and the wider stakeholder groups on how they can make an impact.

 

      Collaborating systematically through technology using transparent processes that develop trust with suppliers and partners.

 

      Harnessing the innovation and IP within the supplier ecosystem, turning ideas into projects that can be managed and reported on transparently, and adding clear value trackers to prove impact.

 

Working closely with stakeholders in the supply chain is an infamously complex process, but it can be made that much simpler using Supplier Collaboration & Innovation (SC&I) technology. This ensures strategic alignment between buyer and supplier and provides comprehensive relationship governance and real-time performance visibility. This allows companies and their suppliers to work on sustainability initiatives more cohesively and develop innovative ideas through collaboration.

 

Here at Vizibl – through our SC&I platform combined with our knowledge and expertise – we are helping large enterprise organisations in the energy sector better leverage their supplier relationships and move closer to meeting those lofty 2030 sustainability goals.

 

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