As increasing numbers of businesses are joining the quest for more sustainable procurement, there is one big question: are we making progress?
In the UK, the Government 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. Such legislation means businesses will need to effectively mobilise their 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.
To achieve this, businesses will need to accurately track the environmental footprint of the products they source as well as to understand from an ethical perspective where those items originate from. Transparency and visibility are key; as ethically and eco-driven businesses we need to be tracing the entire journey of the goods we purchase, such as the country of origin, which is achieved through effective data capture.
For this to be successful there needs a focused strategy and a more comprehensive process. It is critical, for example, for businesses to glean insight into the global supply chain in terms of the environmental impact it has if they are to accurately compare scenarios that highlight where globalisation works, and where it doesn’t. And there are three key steps businesses need to take:
- Identify what information they need to capture across their entire supply chain;
- Understand how best to collate all this information;
- Ensure they know how to use the data effectively.
Carbon footprint - debunking the myths
When it comes to tracking on provenance, often the misconception is that any goods originating from destinations further afield are worse in terms of their environmental footprint. This is a mistake and consequently it limits choice and international trade. Calculating carbon footprint is far more complex than simply looking at ‘air miles’ travelled. For instance, a product’s carbon footprint might 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.
Supporting provenance with procure-to-pay tech
Innovation in P2P technology is already helping firms better understand factors such as the length of travel for deliveries, sustainable impact and different delivery considerations, such as energy consumed for storage or refrigeration. Businesses also need solutions that aggregate data confidentially before presenting it back to shape future behaviours for the better.
Next generation advances in technology will need to encompass the entire spectrum of required functionality from a sustainability perspective, capturing and recording data at every step in the supply chain. This will allow businesses to make even more informed decisions and reduce pressure on their teams from an admin and time perspective.
The future of sustainable procurement
As consumer demand for businesses to track their environmental footprint grows, sustainability will move more mainstream. Whilst we are not yet at the stage where this more granular level of traceability has impacted mass-consumer purchasing, or is influencing buying decisions on a significant level, this is the direction of travel. Consumers are becoming more eco-savvy and are already prioritising brands who walk the sustainability walk.
It is encouraging to see businesses already make important and progressive strides in becoming more environmentally responsible. Technology solutions, like Caternet by Zupa, also play a major role in enabling this. But there remains many challenges ahead, and only when it becomes necessity through legislation and direct consumer spending habits will we see meaningful change for the future. For the moment, however, we’ve only just scratched the surface.