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Making procurement more sustainable

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2016 saw the warmest surface temperatures on earth since modern record keeping began in 1880, according to independent analysis by NASA and the National Oceanic and Atmospheric Administration (NOAA). The analysis also found that 2016 was the third year in a row that a new record for global average surface temperatures was set.

 

Many scientists attribute these rising temperatures to greenhouse gas emissions and global corporations are being increasingly encouraged to cut their emissions, much of which comes from their global supply chains.

 

While it is relatively easy to measure and record emissions from a single company, it is much more difficult to measure it across an entire supply chain.

 

The question then is how can procurement build a more sustainable supply chain while also effectively measuring emissions?

 

Green policies

 

Establishing a set of sustainable policies that suppliers must adhere to is essential. Those policies, which should include purchasing goods from sustainable sources and setting targets on the use of renewable energy, should be placed at the heart of all business operations and supplier relationships.

 

These policies should also be reviewed regularly and any supplier that is not adhering to them should be given chances and should be given help to improve.

 

US retail giant Walmart stipulates that all of its suppliers measure the environmental cost of making products and that they also provide an eco-rating.

 

Renewable Energy


For corporations that want to reduce their greenhouse gas emissions, looking towards renewable energy to power their operations is an obvious choice.

 

Wind turbines and solar panels now offer a reliable and affordable alternative to fossil fuels.

 

The average price of wind turbines has decreased by 58% over the past five years and by 15% alone in the last year. Meanwhile, the cost of solar panels has fallen by roughly 70% since the turn of the decade, according to Lazard, a worldwide financial advisory and asset management firm.

 

Energy Audits


Buildings and manufacturing facilities themselves also contribute to energy inefficiencies. One solution is to implement energy audits, which can be carried out by industry efficiency auditors to identify the causes of inefficiencies.

 

Auditors can also analyse procedures and the setup of control systems for opportunities to make additional energy savings, and recommend new equipment to bring about increased efficiency.

 

Sealing any leaks or cracks on a building can reduce energy consumption by around 20%, according to the US Department of Energy.


Sustainable procurement should be a priority for all corporations, not just for ethical purposes, but because of the fact that it can also help boost savings and brand image.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Nilen Bhatt
Posted by Nilen Bhatt