Sustainable procurement |7 drivers and benefits

Sustainable purchasing is about ensuring that the products and services we buy are as green as possible, with the lowest environmental impact and the most positive social outcomes.

Environmentally friendly products should:

  • Use natural materials and resources.
  • Сontain less hazardous or toxic materials.
  • Build a foundation for a longer lifespan.
  • Reduce the amount of energy and water used in the manufacturing process.
  • Produce smaller waste, for example, using recycled materials, reducing the packaging or allowing your supplier to recycle your waste.

Drivers for sustainable procurement

  1. Human rights

Respect for human rights when interacting with stakeholders of the supplier as a whole (team members, customers, suppliers, shareholders, and communities). Suppliers must uphold the principles of the Universal Declaration of Human Rights. They should avoid association with equipment that is used to violate these rights, such as instruments of torture, or with the production or transfer of weapons to repressive regimes.

  1. International, national, state, and local laws are all applicable

Suppliers must follow all local, national, and international regulations, including all environmental, health and safety, and labor rules, regardless of legislative practice.

  1. Forced and child labor

Forced, bonded, or compulsory labor must not be used by suppliers.. Also, persons under the legal minimum age for employment should not be hired. Children should not be involved in any hazardous work or work incompatible with their personal development.

  1. Equality and diversity

Combating all forms of discrimination in the workplace and promoting diversity. Suppliers must not discriminate in the hiring, compensation, training, promotion or retirement of their employees.

  1. Well-being and development of employees

Flexible working conditions are needed to ensure work-life balance, facilitate learning and personal development for team members. Respect and dignity should be shown to employees. Physical, verbal, or other forms of harassment are all forbidden, as is any threat or other type of intimidation.

  1. Health and safety

International norms and laws require that all employees work in a healthy and safe environment. This includes providing adequate facilities, training, and access to safety information.

  1. Impact on the environment

Implementation of processes for understanding environmental impacts and risks. Reducing environmental impact and promoting environmentally friendly policies. Areas covered include:

  • Waste and disposal.
  • Efficiencies in the use of finite resources such as energy, water, and raw materials have improved.
  • Protecting biodiversity.
  • Reducing emissions of CO2, methane, and other gases.

What does the research say?

  • Companies that adhere to social or environmental standards performed better in 88% of studies, and 80% showed a positive impact on stock performance.
  • Ignoring ESG exposes investments to huge risks and lowers profits. This behavior has devalued $534 billion over the past five years.
  • Creating value through sustainable procurement practices can increase revenues by 5-20%, reduce supply chain costs by 9-16% and increase brand value by 15-30%.

Benefits of Sustainable Purchasing

  • Reduced energy, waste, and travel costs.
  • Minimizes risk in the company’s business practices.
  • Compliance with environmental and social legislation.
  • Improving consumer perception.
  • Creates markets for new products and services.
  • Reduced energy, waste, and travel costs.
  • Reduced risk of non-compliance with environmental legislation.
  • Increased employee and customer loyalty as customers.

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