It’s that time of year again. The PIU is about to launch the results of its 2011 CPO Strategy report, which surveyed over 200 CPOs and other senior procurement executives from 30 countries at the end of last year. The research takes a deep dive into how the global recession has impacted the procurement agenda, highlighting this year’s key challenges and further examining the critical success factors that the procurement community believes will be suitable to meet its ambitions for the year ahead.
As this is the second report of its kind, we can note the changes that occurred over the last year, including shifts on the CPO agenda list and developments with respect to spend managed and that which falls under a category strategy. But what’s more, this year’s survey takes a comprehensive look at how the economic downturn has influenced the standing of the function within the wider organisation (revealing some good news here), to what extent procurement can be an influencer, as well as placing certain procurement practices under the microscope, such as risk management and supplier collaboration.
One of the exciting developments the PIU noted was the build-up around green procurement, an area that we believe is of paramount importance. While, overall, Green Procurement still remained in a low position (13th place) on the list of CPO priorities, it nonetheless has been nudging up the list over the past twelve months.
However, there was something even bigger, and perhaps even groundbreaking, going on. When we probed our survey participants to predict which megatrends could affect the procurement function between 2011 and 2020, the single, most frequently mentioned response given was Green or Sustainable Procurement (then trailed by Supplier Collaboration). This, given the rate at which procurement is currently progressing at (as, for instance, reflected by its increasing spend coverage responsibilities), is a sure indicator that "going green" may not be a top priority right at the moment but that it will nonetheless be a dominant force within the next decade. Meanwhile, what we see is a clear sign of recognition that environmental issues are becoming increasingly significant for the function.
In fact, the vast majority of our sample, a staggering 81%, indicated that they currently have some kind of policy on responsible and sustainable procurement in place. This represents a 19% increase since March/April 2010 when we asked the very same question in a different piece of executive research. Yet again, this observation highlights a rather quick pace of change.
When we designed the 2011 CPO Strategy survey, we wanted to ensure that we not only understood what proportion of the procurement community embraces green procurement but also come to an understanding of how exactly it goes about ensuring that suppliers adhere to "the code of ethics". Here, we noticed that most organisations practice sustainability on paper either by contractual obligation or via written communication to the supplier base. However, far fewer organisations address compliance by conducting audits or providing some kind of support to their suppliers (whether financial or educational). So, while on the surface we see a strong movement towards a green business model, the reality of this ambition reflects a lack of certain action. Inadvertently, it also raises the question is it responsible to simply assume suppliers will comply with your policies on sustainability and, perhaps even, to what extent can and should procurement organisations audit their supplier network?
The PIU is currently talking to a range of companies at the forefront of green/sustainable procurement and with a story to tell; these include ditching inefficient audit processes, using supplier diversity to drive innovation and reducing CO2 emissions by changing internal customer behaviour, among many other great accomplishments. But we equally speak with companies that have no story as yet and who are seeking advice on how to go about implementing a green strategy.
The results of the forthcoming 2011 CPO Strategy confirm what we already believe in: green procurement is a moving target on the CPO agenda list, moving up and moving quickly.
As we accelerate our Bright Green Procurement movement forward this year, we look forward to working with companies to identify their challenges and strengths, share further insight through networking, events and workshop, and help develop strategies. If you have any sustainability/green success stories that you would like to share, or inspire us with, please don’t hesitate to contact me on firstname.lastname@example.org.
If you’d like to find out more about our CPO Strategy 2011 Report, simply click here.