11 Jan 2010 Sustainable Procurement Sourcing? Show me the money
I’m going to quote a senior procurement professional. And when I say senior I mean senior! Someone who’ll be very glad I don’t attribute this. “Sustainability?” He said. “You know what procurement people are like – if we can find it cheaper we’ll have it – sustainable or not. Show me the money and I’ll do sustainability.”
Show me the money. It’s a fair point of view. You‘re charged with sourcing safely goods and services that meet the business requirement at the lowest cost and the lowest risk to the business. Sustainable goods cost more. It’s a fact. You don’t need to be Sarah Palin to appreciate that this is somewhat problematic. So how can a sustainable sourcing policy be justified financially? In a competitive and fragile market, how can I justify paying more than the competition?
Well, if your looking to the balance sheet to understand where to slot in you sustainability benefits, you are looking in the wrong place!
You need to be looking at your vendor risk profile. Over recent years the argument as been won. Without concerted efforts by industry, our environment is under serious and imminent threat. Action is required now to reduce carbon emissions and find carbon efficiencies with a positive environmental impact. There is now a comfortable critical mass that takes the view that to not embrace sustainability is commercially unacceptable.
In other words – if your organization does not take sustainability seriously you will be found out. You will lose customers and you will suffer reputational damage as sure as if you employed 7 year old orphans to dig coal underground.
There isn’t a direct commercial benefit from sustainable procurement sourcing and any attempt to find one will be contrived. There is however a serious commercial risk to not buying into the sustainable supply chain.