In pursuit of Procurement with Purpose
Procurement with Purpose isn’t just the title of Peter Smith’s recently published book, it’s also a phrase that should resonate with businesses and procurement functions across the globe as the battle continues to ensure Scope 3 emissions are managed and controlled by companies, big and small.
Smith, an author and Managing Director of Procurement Excellence, joined Vizibl CMO, Sarah Clarke, to discuss supply chain sustainability in the latest of our 2022 webinar series, The Decade of Our Lives: Climate, Carbon and the Scope 3 Challenge. In a wide-ranging discussion, the conversation not only focused on key issues impacted by climate change, most notably water security, species loss and deforestation, but also on the social issues that matter to businesses and stakeholders around the world.
Collaboration is key
A recurring theme in the conversation was the need for proactivity and the requirement for a consistently collaborative approach between buyer and supplier.
“I do think that climate change is the most important issue facing humanity today,” says Smith. “But I do have a few concerns over how the discussion is going around Scope 3. I think some people see Scope 3 emissions being something that is a bit passive. We’re getting a lot of people talking about this now, but there’s still less action than talk. It’s pushing the responsibility onto other people.
“You need to be working with your suppliers in a collaborative manner. If you’re a smaller company and you don’t have the power to influence or direct your suppliers, you need to think about what those numbers mean and whether you can change what you’re buying, change the specification, change the supplier even. I don’t want Scope 3 to be a passive data collection point.”
The rise of sustainable procurement
This resorting to passive data collection is, of course, the danger; arguably a greater one for smaller companies who feel they don’t have the leverage to directly impact suppliers outside of their Scope 1 and 2 remit. The good news – and let’s face it, there hasn’t been too much of that so far this year – is that sustainable procurement isn’t so much climbing up the agenda, as sprinting to somewhere near the top. ‘Sustainable procurement’ as a Google search term has seen a 900% year-on-year rise - a clear indication of its increasing importance and its place in the consciousness of those individuals and businesses who are aware of just how critical it has become.
Maintaining a positive mindset, though, can be a challenge, as Smith acknowledges.
“I think a lot are struggling, particularly smaller organisations, on where to start,” he says. “Unless you’re a big organisation, a Unilever for example, who can apply pressure down your supply chain, it’s quite hard for a mid-size services company of some sort to understand what they can really do in Scope 3. There’s a tendency to look at those numbers and think, what can I really do to impact on these?”
Keep it simple and control what you can control
As in everything, there’s a tendency to complicate matters. The most important thing to remember, though, is that the majority of the key elements associated with sustainable procurement simply represent good business sense. “Why would you use more energy than you need,” Smith opines. And he has a point. A very good one.
Again, it comes down to proactivity. Here at Vizibl we place particular emphasis on the importance of robust supplier collaboration, starting with an initial small set of strategic suppliers, in enabling procurement to achieve ever more ambitious targets, most recently in the sustainability space.
“A key leading metric we look at is active relationships,” says Clarke. “Active relationships are defined by a set of behaviours – does the relationship have activities, a good cadence around mutual projects, innovation initiatives and opportunities that are all logged against an objective or a strategic initiative, that are aligned to a joint shared vision, and are mutually beneficial to both the buy side and the supply side.
“So, if for instance, your business objective is to reduce scope 3 supply chain emissions by 50% by 2030, the key leading metric from a supplier collaboration lens, is what is the total number of active, collaborative relationships you have working towards this goal. If the answer is only a small handful, ask yourself if you’re really on the right path, and at the right scale, to achieve this.”
Smith concurs. “Measuring things like engagement with suppliers is a good place to start,” he says. “I think targets based very much on what you can control yourself are things that companies can be doing now.”
As evidenced over the past month, the world can be an uncertain place. On the journey to net zero, controlling the controllables is as good a place as any to begin.