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Sustainable procurement doesn’t have to be a headache – here’s how your business can benefit

Posted on November 6, 2023November 6, 2023 by dishanth

For business leaders, environmental, social and governance (ESG) goals are very much front of mind. More than 70 countries, including China, the US and the European Union, now have firm pledges to reach Net Zero, and the UK is committed to hitting this by 2050. Businesses of all sizes are increasingly aware that they have to be part of the solution, rather than add to the problem.

Procurement leaders are uniquely positioned to drive positive change and broader business impacts on ESG goals. While organisational sustainability efforts have historically been grounded in ensuring compliance with regulations, a comprehensive, proactive approach to sustainable procurement can reduce risk exposure (such as reputational, brand safety or regulatory), create savings, and improve brand value for the enterprise.

Procurement departments are certainly aware of the need to thoroughly assess the provenance of the products they purchase. But while this may be possible with core purchases – usually involving large amounts of money where there is a direct relationship with the supplier – it is simply not possible to vet every single product, particularly in categories such as IT purchases, catering items and health products, where the overall spend may be lower but individual purchase volumes are higher.

A trusted smart business buying solution, such as Amazon Business, can help operationalise and scale a responsible purchasing program. As well as other benefits, including access to business-only pricing, a familiar user interface, and Amazon’s reliable delivery network, buyers can select more sustainable products across business-relevant categories, specifying from over 40 certifications covering a wide range of credentials.

This allows businesses to set specific requirements, and even set preferences, ahead of employee product searches. These out-of-the-box buying policies can direct your team to products and sellers that can help satisfy your organisation’s purchasing goals, and would make products with certain sustainability certifications the preferred product in a buyer’s search results.

Clear labelling of products with sustainability certifications frees up time spent finding, validating and growing a base of suppliers that can help you meet your organisation’s responsible purchasing criteria, using an interface with which employees may already be familiar. In turn, business leaders can access pre-built reports (for example, orders, shipments, returns, refunds, reconciliation, related offers and the credentials report which contains product sustainability details), or build custom reports to identify purchasing patterns and track spend toward more sustainable products that meet ESG goals.

One example of a supplier that offer products with sustainability certifications is UK firm Portus Digital, which helps to repurpose or recycle redundant computer equipment. “Our aim is to be a frontrunner in the industry and set an example of how it is possible to combine technology and sustainability,” explains Tash Clementis, Director of Marketing. “People are more likely to choose a greener option when it’s easier and more accessible.”

Amazon Business also works with suppliers to help them become certified, ensuring they can benefit from organisations looking to make more sustainable and responsible purchases. “We launched on Amazon to help more businesses make sustainable IT decisions,” says Rob Judd, Director of Sales at Portus Digital. “We’re pleased by the response we’ve managed to generate so far – it’s exceeded our expectations.”

Research from McKinsey shows that organisations that embrace a comprehensive ESG strategy can enhance investment returns, increase top-line growth and keep and attract quality talent. Further, improvements on reporting can help businesses demonstrate their progress towards ESG goals more broadly, providing specific metrics to proactively measure against social responsibility and sustainability goals.

Amazon Business can also partner with organisations as they look to improve sustainability in other ways. Amazon Business Prime members can choose to consolidate their deliveries using Amazon Day, which gives them the choice of two days each week during which they can receive their orders. On, average, this reduces the number of packages. For larger orders, it’s also possible to receive bulk deliveries by the pallet, meaning organisations can stock up on items while minimising delivery journeys, where available.

Amazon Business, as part of Amazon, is committed to adopting sustainable practises, including reducing packaging and making use of electric delivery vehicles. It has also committed to power its operations with 100 percent renewable energy by 2025.

With sustainability and responsible business rising up the agenda for organisations, investors and consumers, it’s vital companies take steps – and can demonstrate those steps – to source responsibly. This is an issue that all businesses must embrace, and one they cannot afford to ignore.

Source Independent

The Power of Responsible Sourcing

Posted on October 5, 2023 by dishanth

Climate change, circular economies, ESG and sustainability have all become business priorities over the past few years, with global supply chains sitting right in the middle of these issues – both as a major contributor to the problem and as an area of focus for improvements. Businesses must, therefore, purchase materials and products from companies that can show that they have good sustainability practices, from both a labour and manufacturing point of view.

The benefits of responsible sourcing and sustainable packaging

Responsible sourcing has been shown to influence consumers buying decisions, with studies suggesting that up to 70% of consumers would pay more for sustainably-produced goods. Businesses must therefore meet the increasing demand from consumers for products that are both environmentally and socially responsible.

Yet businesses are still learning when it comes to improving their responsible sourcing process, with Richard Howells, Vice President of Solution Management for Digital Supply Chain at SAP, describing it as an “evolving landscape,” allowing businesses the opportunity to combine sustainability initiatives with efficiency efforts and customer demand.

“While the ‘Amazon Effect’ has led to heightened consumer expectations for quick delivery, there is a similar demand for eco-friendly products,” Howell says. “In fact, 90% of Gen X consumers say they’d be willing to pay more for sustainable items – compared to 34% just a couple of years ago.

“In today’s market, for businesses to prosper and expand they must discover novel approaches to meet rising demands for ESG standards, placing greater emphasis on responsible sourcing.”

Responsible sourcing within procurement

For businesses to build a responsible and resilient supply chain, leaders need to acknowledge that procurement is the first step. “The procurement team begins the sourcing process by evaluating potential goods and materials that would make up the products made and distributed in the supply chain,” says Etosha Thurman, Chief Marketing & Solutions Officer, of Intelligent Spend and Business Network at SAP.

“In their evaluation, they are considering the environmental, societal, and economic impact of sourcing the materials. For example, potential risks with energy efficiency, water and land usage, and hazardous materials.”

To ensure businesses adopt responsible sourcing, leadership needs to set out clear definitions which align with the ESG goals of the organisation. Procurement professionals must also be educated about the necessary steps to ensure the goods and services under consideration meet the criteria.

Technologies role in responsible sourcing

In today’s rapidly evolving business landscape, technology stands as a pivotal ally in driving sustainability across the source-to-pay (S2P) and procure-to-pay (P2P) processes. By seamlessly integrating innovative solutions, organisations can navigate strategic sourcing, procurement, and supplier relationships while adhering to responsible and ethical practices.

“Technology can help organisations follow sustainable practices at every stage of the S2P and P2P process,” Thurman says. “In strategic sourcing, the right solutions can help analyse current and future spending, find and source from suppliers, ensure compliance and reduce risk with sustainability in mind. SAP Ariba Sourcing is a good example of a solution that enables users to prioritise suppliers that align with ESG goals.”

During the P2P process, Thurman reminds organisations that it is important to use solutions that help guide business users to make risk-aware and sustainable purchases, ensuring contract compliance with sustainable procurement policies. “The guided buying capability in SAP Ariba Procurement solutions can help guide employees to purchase from sustainable suppliers,” she adds. “Technology can also be a valuable tool in nurturing relationships with sustainable suppliers. Taulia’s Sustainable Supplier Finance solution allows users to reward suppliers that share their ESG qualifications with early payment incentives.

What’s more, to build a sustainable and risk-resilient supply chain, businesses need to establish strong relationships with key suppliers, which must be diverse. The supply chain data then needs to be monitored and analysed in real time, and investment needs to be made in technologies that can enhance supply chain visibility and agility.

“Efficient, effective technology can help businesses acquire and manage the data and information they need to measure compliance, minimise risk and boost sustainability,” Howells says. “Businesses must examine their value chains comprehensively, from sourcing raw materials to understanding the end product’s lifecycle. By adopting technology-driven solutions like blockchain and IoT, companies can ensure that their sustainability efforts extend beyond the surface level to every aspect of their operations.”

What’s more, SAP works with its partners to provide efficient solutions to business operations, while recognising the importance of monitoring and measuring not only cost, speed, profitability and customer service, but increasingly, emissions, waste, inequality and other sustainability and risk KPIs across the supply chain. This can be accomplished by connecting every process, contextualising every decision and collaborating with partners without obstacles. However, there is no one-size-fits-all solution for supply chain complexities.

Howell explains: “Buyers on SAP Business Network can choose vendors based not only on price and availability but also on human rights records and third-party sustainability ratings. Suppliers share human rights questionnaires to their profiles on SAP Business Network, where buyers can access them. Buyers are automatically notified any time a supplier they are doing business with updates their questionnaire. This saves suppliers time and helps buyers easily prepare for due diligence processes.”

Final thoughts

Embracing responsible sourcing is paramount for businesses aiming to navigate the evolving landscape of sustainability, satisfy consumer demands and enhance their growth prospects. Through integrating technology, fostering diverse supplier relationships and monitoring supply chain data, organisations can achieve a holistic approach to ESG standards, ensuring lasting positive impacts on both their operations and the wider world.

In a rapidly changing business environment, responsible sourcing stands as a gateway to sustainable success. By aligning with ESG goals, leveraging technology-driven solutions, and nurturing supplier relationships, businesses can forge resilient supply chains that not only meet current demands but also pave the way for a more environmentally and socially conscious future.

Source Sustainability

Future-proof sustainability through a people-centric culture

Posted on February 3, 2023 by dishanth

The team behind sustainability pioneer Green Mountain share their insights into ESG, The Scandinavian Management Philosophy and collaborative cultures
“To operate efficient state-of-the-art colocation data centers, the number one priority for Green Mountain is to have skilled, motivated, and enthusiastic employees who are up for the task.”

This is the ethos of Tor Kristian, the CEO of Green Mountain. And it is this people-centric approach that has shaped the entirety of Green Mountain’s company strategy.

“Whether it is the operations team, project managers, service delivery, sales, management or supporting functions – they all contribute to the same goal; “Setting the green standard” in the data center industry.”

According to Kristian, Green Mountain is shaped by four core values: a strong customer focus; reliability and honesty; knowledge and enthusiasm.

“These values are deeply rooted in our company culture and reflect on anything we do. After all – it is all about the people.”

To delve deeper into Green Mountain’s people-led philosophy, and the importance of the human factor in the running of a data center, we spoke to four Green Mountain employees, spanning the company’s entire value chain.

Source Sustainability

Is A Renewable Energy Boom Coming To The Middle East?

Posted on March 16, 2021 by dishanth

The coronavirus pandemic has raised awareness among GCC countries of the importance of environmental, social and corporate governance (ESG) standards. If current trends continue, then ESG could become a valuable element of the region’s recovery from Covid-19.

ESG standards are used by investors to evaluate potential investments, as well as enabling business leaders to formulate responsible and sustainable corporate strategies.

Environmental criteria take into account a company’s environmental footprint, as well as the actions it takes to offset it. Social criteria evaluate how it manages relationships with its various internal and external stakeholders. Lastly, governance criteria evaluate the inner mechanisms of a company’s management and operations.

Demand for investments that are ethical and sustainable has been increasing in recent years. Globally, more and more investors are turning to businesses that embrace ESG, and this tendency has been boosted by Covid-19.

As phrased in a report published by S&P Global in April last year, “strong ESG performers with stakeholder-focused and adaptive-governance structures are likely to remain resilient amid these rapidly changing dynamics”.

ESG standards have become a central focus of the world’s major financial bodies. In January this year, at the World Economic Forum (WEF) in Davos, it was announced that a coalition of multinationals and business leaders had signed up to the “Stakeholder Capitalism Metrics”, a set of ESG standards released by the WEF and the International Business Council in September 2020.

“Stakeholder capitalism [has become] mainstream,” Klaus Schwab, founder and executive chairman of the WEF, told international media at the time. “The public commitments from companies to report not only on financial matters but also their ESG impacts are an important step towards a global economy that works for progress, people and the planet.”

Meanwhile, the International Financial Reporting Standards Foundation is moving forward with its plan to develop a single set of internationally recognised sustainability standards. In early February the foundation announced the goal of producing a definitive proposal by September this year.

In the GCC region, ESG has likewise become a hot topic in recent months.

For example, at the end of last year the CFA Institute – a global investment association – announced the results of a study which found that 94% of retail investors in the UAE were interested in or applied ESG principles in 2020, up from 90% in 2018.

Meanwhile, 74% of investors in the UAE with values-based objectives said they would be willing to give up some profit in exchange for meeting their values objective.

Green shoots in the GCC

Significant steps have been taken by major regional players towards a more ESG-oriented future.

Qatar National Bank (QNB) set up its Green, Social and Sustainability Bond Framework in February last year.

Related Video: Fukushima’s Radioactive Wastewater Disaster Then, in September last year, QNB launched its $600m green bond, for which it received subscriptions of more than $1.8bn. These proceeds will be used to “finance and/or refinance assets in verified Eligible Green Projects”, the bank said.

This was only the second such issuance from a commercial bank in the GCC, following the green bond of the National Bank of Abu Dhabi, as it was then known, in 2017.

In a further sign of the growing interest in such instruments in the region, in April last year the Dubai Financial Market launched the UAE ESG index, while in August Tadawul – Saudi Arabia’s stock exchange – announced that it planned to launch its own ESG index in 2021.

This was followed in September by Saudi Electricity’s $1.3bn green sukuk (Islamic bond) issuance, which was five times oversubscribed, a result that was driven by growing regional demand for ESG-compliant investments.

Saudi Arabia recently reinforced its commitment to ESG and sustainability during the Saudi Future Investment Initiative in January, at which Tadawul and the Future Investment Initiative Institute signed a memorandum of understanding to advance ESG awareness in the Kingdom.

At the same conference Prince Abdulaziz bin Salman Al Saud, the minister of energy, told media that Saudi Arabia was set to become “another Germany when it comes to renewables”.

Despite these promising indications, however, the Saudi ESG index has yet to be launched.

Elsewhere in the region, in early February the Abu Dhabi Investment Office launched an ESG policy, which it will deploy in relation to different operations, among them public-private partnerships.

ESG key to GCC recovery?

The growing focus on ESG standards dovetails with development priorities shared by countries in the GCC region.

On the one hand, it ties in to different diversification strategies. Last year’s slump in oil prices served to underline the importance of a more broad-based economy. Investments guided by ESG – for example, in renewable energy – offer a way to augment diversification.

On a related note, the Gulf is on the front line of climate change, and ESG can boost resilience as well as reducing emissions.

Lastly, globally speaking, ESG-guided companies have proven remarkably resilient in the face of Covid-19. An increased focus on ESG may thus constitute a way to drive a sustainable recovery from the pandemic.

By Oxford Business Group

Source Oil Price