When it comes to sustainability, you often hear the same question: who’s responsible? Is it the CEO? The COO? Should everyone in the organisation contribute in whatever ways they can?
The answer is perhaps yes to all of the above. However, a particular responsibility will always lie with procurement teams, as they extend the arms of the organisation out into the wider economy, via its supply chain. In this age of increasing extra-financial demands, it’s time to focus on how procurement teams can not just be carried along with the sustainability agenda but actively drive it, and thereby create long-lasting value for the business they represent.
The key to resilience is in the data
The saying goes that cash is king, but for long-term success in procurement, data is the pot of gold that should garner the attention of key stakeholders, due to its ability both to help anticipate risks, and to capitalise on opportunities within the value chain. In short, leveraging data effectively allows a businesses to remain viable in a world shaped by physical and regulatory constraints, even if it requires a degree of transformation to achieve this
Looking beyond the essential question of business survival, data provides the fundamental insights needed to lay the foundations of long-lasting success. It permits a business to optimise processes, identify inefficiencies, and reduce waste. By embedding sustainability considerations into procurement strategies, companies can better future-proof their operations and build stronger relationships with stakeholders.
At the end of the day, it is the businesses that adopt and prioritise a data-driven approach to sustainability which will be able to differentiate themselves in the market and gain a competitive edge as regulations and consumer expectations evolve.
Self-awareness for success
While four out of five companies acknowledge the need for transformation to survive, nearly as many indicate that they lack insight into their Scope 3 emissions, especially those linked to the activities across their supply chain. This information on Scope 3 emissions is crucial for meeting mandatory reporting requirements and achieving sustainability objectives, indicating that for many, there is a critical gap between the data businesses hold, and their visibility over it. For purchasing teams, achieving a deeper understanding of their own operations is essential if they are to enhance both operational resilience and performance.
In order to obtain a better understanding of Scope 3 emissions, it’s essential to work collaboratively with suppliers and partners across the supply chain, by implementing robust tracking and reporting mechanisms, and leveraging digital tools and analytics to gain accurate insights. Once you have this data, proactive steps can be taken to mitigate environmental impacts and climate risks, for example selecting suppliers with lower carbon footprints, investing in greener logistics, or optimising supply chain routes to reduce emissions.
Striking the right balance between economic and sustainability performance
The key idea to bear in mind is a balance between financial and non-financial performance. In today’s world, traditional economic performance metrics in procurement must now coexist with sustainability considerations. Environmental and social factors need to be evaluated alongside pricing and volume. Recognising societal impact within your value chain is becoming essential for building a resilient and, consequently, efficient supply chain.
As a result, regulatory frameworks such as EUDR, CBAM, FLAG, PEF, CSRD, and CSDDD are becoming increasingly prominent. These regulations aim to ensure that suppliers are evaluated on more than just cost and quantity, pushing businesses to anticipate the physical limitations of resource availability. As a reminder: materials like copper, nickel, or cobalt will in the not too distant future become scarce, and at that point, industries will need to adapt swiftly. The businesses which start to take action now, will be ahead of the game.
What’s more, companies that embrace and embed sustainable purchasing practices can enhance their brand reputation, attract investment, and increase customer loyalty. Additionally, they can reduce financial risks associated with environmental non-compliance and supply chain disruptions caused by climate change.
Does your data speak the language of ESG?
We can think of purchasing as a company’s early-warning system, a way to identify risks and uncover opportunities within the value chain, to inform strategic decision-making. The key is to make data readily accessible and actionable for procurement professionals.
A company’s procurement information system is a valuable resource, an uncut diamond. There’s a vast amount of data out there. The trick is capturing, structuring, refining, and transforming it. To interpret this data in an ESG context and unlock its non-financial value, digital tools are indispensable: tools which can handle large data volumes, adapt to suppliers’ varying levels of maturity, provide granular management, and integrate scalable carbon methodologies seamlessly.
Providing the right digital tools is only part of the solution; equipping employees with the knowledge and expertise to apply these insights is equally critical. Companies must also prioritise training and upskilling their procurement teams to effectively analyse and interpret ESG data.
Working towards a digitally driven future
The future of purchasing lies in its ability to harness digital data-management solutions equipping procurement teams with the knowledge and skills to manage non-financial data. Soon, the term “value chain” will take on a new, more meaningful significance—one that fully integrates at its core all of the types of value that go beyond the pure financial.
Digital transformation will play a crucial role in streamlining data collection, automating reporting processes, and enhancing transparency across the supply chain. Technologies such as Artificial Intelligence, blockchain, and big data analytics can help companies verify supplier sustainability claims, prevent greenwashing, and ensure compliance with stringent regulations. By leveraging these innovations, businesses can build smarter, more ethical supply chains that benefit both the planet and their bottom line.
Ultimately, companies that view sustainable purchasing as a long-term investment rather than a regulatory burden will be the most successful. As industries continue to evolve, procurement teams must remain agile, forward-thinking, and committed to integrating ESG principles into their operations. In doing so, they will not only secure the future of their organisations but also contribute to a more sustainable global economy.
