A recent survey conducted by HEC Paris and EcoVadis, the 2017 Sustainable Procurement Barometer, shows continued rapid growth in sustainable procurement (SP), with nearly 97% of organizations considering SP important or critically important. For a full appreciation of just how rapid this growth has been, you need to look no further than 2003 when the first Sustainable Procurement Barometer was published. At the time, only 40% of organizations surveyed rated SP as important or critically important.
Source: HEC/EcoVadis - 7th Sustainable Procurement Barometer
Fortune 500 organizations across the globe are investing heavily to ensure sustainability permeates all aspects of their supply chain and procurement operations. Return on investment (ROI) expectations among CEOs and other top executives are high. Chief Procurement Officers, Chief Sustainability Officers and their teams are being challenged to deliver results across the supply chain in accordance with these lofty expectations.
So, what’s driving this upward trajectory?
Brand reputation (identified as a critical factor by 63% of organizations surveyed), risk reduction (61%) and compliance (57%) are the top three drivers among procurement managers. Increasing regulations in Europe and the U.S., like the California Supply Chain Transparency Act, UK Modern Slavery Act and Dodd-Frank Act on Conflict Minerals to name a few, have helped to raise the focus on compliance.
Other drivers include cost savings (identified as a critical factor by 39% of organizations surveyed), along with profitability and revenue (35%).
Corporate social responsibility (CSR) and SP issues, ranging from Greenhouse Gas (GHG) emissions to human rights to anti-bribery practices, have seen a shift in focus during the last three years. While a higher percentage of organizations (33%) are placing greater emphasis on business ethics and social/labor issues, a lower percentage (18%) are placing more importance on the environment.
Tangible business results that organizations can attribute to SP include the following:
• 76% report improved brand reputation
• 55% report stronger, more reliable supplier relationships
• 28% report cost savings
How can WGL Energy (WGL Energy Services and WGL Energy Systems) help?
WGL Energy delivers a full spectrum of energy offerings, including electricity, natural gas, renewable energy, carbon reduction, distributed generation and energy efficiency solutions provided by WGL Energy Services, Inc. and WGL Energy Systems, Inc.
Our energy market experts can work with you to customize a renewable energy plan that meets your business and sustainability objectives. Our Program Lead for Clean Energy, a member of this year’s Forbes 30 Under 30 in Energy, can help your organization evolve to Net Zero GHGs, with the right Net Zero (energy or emissions) strategy for your facilities.
Contact your Business Development Manager for help in making sustainability a priority in your supply chain and procurement operations.
About HEC Paris
Specializing in management education and research, HEC Paris offers a complete and
unique range of educational programs for the leaders of tomorrow. Founded in 1881 by the Paris Chamber of Commerce and Industry, HEC Paris is a founding member of the Universite Paris-Saclay. Visit their website at www.hec.edu to learn more.
EcoVadis is the first collaborative platform providing sustainability ratings and performance improvement tools for global supply chains. EcoVadis’ easy-to-use CSR scorecards help companies to monitor suppliers’environmental, ethical, and social practices across 150 purchasing categories and 110
countries. Visit their website at www.ecovadis.com to learn more.
Bruel, O., Menuet, O., & Thaler, P. (2017). Scaling Up Sustainable Procurement: A New Phase of Expansion Must Begin (Whitepaper). Retrieved February 17, 2017, from HEC/EcoVadis website: http://www2.ecovadis.com/sustainable-procurement-barometer-2017
Whitepaper based on the 2017 HEC/EcoVadis Sustainable Procurement Barometer, 7th Edition.