Purpose creates a sense of meaning, inspiring employees and unlocking discretionary efforts to transform and grow. It promotes strategic focus, alignment and provides guardrails for decision-making.
Procurement has a clear effect on this, but the approach to unlocking this impact is often unclear for companies.
The motivation to address complexity and inertia is clear. "Consumers are shifting demand for sustainably-sourced products from more ‘purpose-driven’ companies – executives have to act on this. Sustainability becomes a new business imperative, so focusing on prices is no longer enough. Procurement has a unique position to boost a company’s sustainability efforts and establish a sustainable supply network," said Daniel Weise, managing director and partner at Boston Consulting Group.
We are seeing organisations expanding procurement’s role to explicitly involve sustainability, and leaders inspiring change:
Thomas Udesen, CPO at Bayer and cofounder and ambassador of The Sustainable Procurement Pledge: "We have €24bn spend across over 100,000 suppliers worldwide, all of whom we can directly influence on sustainability. That’s millions of lives we can have a positive impact on, whether it is through reducing greenhouse gas emissions or improving labour relations."
David Ingram, CPO at Unilever: "Through partnerships, innovation and collaboration, we’re determined to make our planet blue again."
David Cutter, chief sustainability officer and president, global supply and procurement at Diageo: "By working together to ensure clean drinking water is available, it can transform entire communities. Universal, affordable access to WASH – water, sanitation and hygiene – is a critical public health issue and a UN sustainable development goal."
Tony Milikin, chief sustainability and procurement officer at Anheuser-Busch InBev: "Climate change is the most pressing issue facing our planet. We have ambitious sustainability goals for 2025 and we are committed to playing our part to deliver the UN sustainable development goals. Collaboration across sectors and industries is the key to driving measurable change. We want to work with entrepreneurs and innovators around the world to scale game-changing solutions that bring positive environmental and social changes."
Barry Parkin, chief sustainability and procurement officer at Mars: "Working closely with farmers and relying on the innovation of its procurement team, Mars was able to demonstrate that more efficient and sustainable farming practices could yield a triple win: farmer income up by 30%; water use down by 30%; and cost savings for Mars of 30%."
‘Surface purpose’ and ‘greenwashing’ are not good enough – procurement needs to actively create an advantage in adversity. Sustainability may be one facet of this shift towards ‘purposeful’ procurement, but it is vital.
As a leader in procurement, your insights and views are valuable to understand emerging trends and alternatives in shaping the function’s purpose and priorities; a purpose that delivers a triple bottom line impact: planet, people and profit. In its new survey, the first of its kind, Inverto explores the links between procurement’s purpose and roles, capabilities, mindsets and the impact it delivers.
To help shape the future, participate in INVERTO’s survey here.
Lance Younger is a managing director at INVERTO, a Boston Consulting Group company.
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.