Zupa: Five challenges to achieving sustainable procurement
In the quest for more sustainable procurement, there are many positive changes afoot, from the recent plastic packaging tax, to minimising wastage and building more sustainable supply chains. Although companies have begun to take more progressive strides towards tackling climate change, there is still much to be done.
The UK has already put in place mechanisms to increase sustainability and social value to deliver economic, social and environmental outcomes from the procurement of goods and services - these include the Public Services (Social Value) Act 2012, the UK Climate Change Act, Equality Act, Modern Slavery Act and others.* As a result, firms will need to effectively mobilise procurement to deliver on relevant priorities including targets to achieve the Government’s net zero strategy, which sets out policies and proposals for decarbonising all sectors of the UK economy in order to meet its net zero target by 2050.
But what are some of the key considerations needed to achieve sustainable procurement?
Supply Chain Traceability
It is becoming more important for companies to accurately track the environmental footprint of the products they source as well as to understand from an ethical perspective where items originate from, in the interests of transparency and visibility. Tracing the country of origin is achieved through effective data capture = requiring a focused strategy and a more comprehensive process.
It is critical that businesses first identify what information they need to capture across their entire supply chain - and then understand how they can best collate all this information in the right way. The next step is to understand how to use that data effectively. It is an absolute necessity for businesses to have insight into the global supply chain in terms of the environmental impact it has to be able to compare scenarios that highlight where globalisation works, and where it doesn’t.
Tracking on provenance
When it comes to tracking on provenance, often the misconception is that any goods originating from destinations further afield are worse in terms of environmental footprint. This consequently limits choice and international trade. Yet, calculating carbon footprint is far more complex than simply looking at the ‘air miles’ travelled. For example, a product’s carbon footprint may be smaller if it is being farmed and shipped on a larger scale from afar, as opposed to being farmed and shipped on a smaller scale at destination closer to home.
Thankfully, innovations in procurement technology are already starting to help firms to understand related factors such as the length of travel for deliveries, the sustainable impact, different delivery methods as well as considerations such as energy consumed for storage/refrigeration etc. Next generation advances in technology will need to encompass the entire spectrum of required functionality from a sustainability perspective. Businesses needs solutions that aggregate data confidentially, before presenting it back, thereby helping to shape future behaviours for the better.
Labelling and measuring carbon impact
Many businesses have questioned the future of labelling and the sustainability challenges faced in the future. It is not unlikely to assume that measuring carbon impact will one day become a mandatory requirement, just as allergen and nutritional information are today. This will have a knock-on effect, shaping industry behaviours and impacting organisations that only produce products under a pre-specified number of carbon figures, and we will likely see heightened awareness among existing manufacturers, who will be required to change their modes of production and record the carbon footprint in order to comply, such as with palm oil, for example.
Procurement technology and automation
The only method of capturing comprehensive information, is to record data at every step in the supply chain. The best way to do this is through fit for purpose technology and automation. If this information is captured correctly, it will allow businesses to make more informed decisions and reduce pressure on their teams from an admin and time perspective.
Customer demand for sustainability
Sustainability is moving to mainstream. There is a growing consumer demand for businesses to track their environmental footprint and for many firms that means via their supply chain too. Although we are not at the stage yet where this more granular level of traceability has impacted mass-consumer purchasing, or is influencing buying decisions on a mass level, it will come to that in the near future. Consumers are becoming more eco-savvy; they are already prioritising brands who walk the sustainability walk. So, tracking sustainability credentials needs to be implemented proactively from the top down. Only when it becomes necessity through legislation and direct consumer spending habits, will we see meaningful change for the future.
The Government says it will cut emissions from manufacturing by about two-thirds from 2018 to 2035. Carbon data capture will play a vital role here, but considerable progress is needed, not to mention procurement technologies, which will help businesses to manage these vital changes effectively and efficiently.
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