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Why you should prioritise a sustainable sourcing strategy in 2016


21-Dec-15 16:32
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In this guest post, Procurement Leaders invites ISEAL’s Karin Kreider to look at the 2016 priorities for procurement functions looking to establish or develop a robust sustainable sourcing strategy.

Has your company set ambitious targets for sustainable sourcing? While these are often generated by the CEO or sustainability officer, it is often down to the procurement director to find a practical way to achieve these goals. Managing short term financial budgets while trying to secure a long term sustainable supply can create conflicting strategies.

As a priority for 2016, procurement directors need to establish a sustainable sourcing strategy, which helps the business meets its targets in a robust and credible way.

Increasingly, companies are choosing to do this through using sustainability standards. Surveys by ISEAL and Globescan enquired how confident business leaders were that standards are good for business and produce sustainability impacts. Three quarters of respondents (70% in the ISEAL survey of 101 respondents; 76% in the Globescan survey of 186 respondents) see a strong business case for standards or believe that standards deliver business value to the companies that use them.

However, making changes to well-established procurement processes is easier said than done, so businesses need to be clear on the value of choosing sustainability standards to meet their sustainable sourcing goals.

ISEAL Alliance interviewed existing users of sustainability standards – retailers, manufacturers, traders and others – on what they saw as the value of working with credible sustainability standards (certification systems) like those that are members of ISEAL.

Companies revealed the value of sustainability standards in their business in five key areas:

  1. Making complex supply chains more understandable. This included providing better traceability, simplifying what is asked of suppliers by using agreed standards and generating better relations with producers.

  2. Mitigating risk. Rigorous auditing, transparency of origin, and outsourcing assurance of responsible practices to local experts helped companies mitigate risks of sourcing from complex supply chains.

  3. Ensuring sustainable supply for the whole industry. Several companies noted that by their investment in certification, they were strengthening the reputation and ensuring a sustainable future for the whole sector.

  4. Meeting consumer expectations. By communicating compliance with sustainability standards, companies said they were increasing consumer awareness of sustainable sourcing and creating market differentiation for their products.

  5. Reflecting a company’s values and heritage. As well as aligning companies’ goals with their values and maintaining trust, certification also provided a way to engage more deeply with employees.

Click here to read interviews with M&S, IKEA, Mars, Woolworths, Wilmar, De Beers, Domtar, Bumble Bee Seafoods and Tetra Pak.

So as a priority for 2016, make sure your team is convinced of the business case for sustainable sourcing and to what extent it drives procurement decisions. Your strategy may be just to aim for compliance, to use sustainability standards as a brand differentiator or to create value and growth. By being aware of the opportunities and the solutions for more sustainable sourcing you get to be the team that delivers the company’s goals.



 

Karin Kreider is the Executive Director of the ISEAL Alliance.

This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.


Karin Kreider by Karin Kreider

 
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