Sustainable procurement – the case for supply chain responsibility

Like most organisations, you’re probably starting to integrate sustainability factors in your procurement. Maybe you’ve added criteria for product energy consumption or packaging. Great, right? But the reality is, if you’re focusing on product ecology only, you’re likely neglecting sustainability in the product supply chain, which is exactly where some of the highest social and environmental risks are found.

New research from Dr. Veronica H Villena at Penn State University reveals that the procurement function is widely lacking in efforts to drive supply chain responsibility. This means that critical risk areas like factory working conditions, health and safety, and environmental impacts of production can go unchecked, limiting your ability to hold product manufacturers accountable for any human rights or ecological violations where your products are made.

Whether it’s apparel, technology or any number of commodities, a life cycle approach to sustainable procurement demands that products and their supply chains are both on your radar.

So why is procurement’s voice in supply chain responsibility so important?

As a sustainability certifier of IT hardware, we know that when a purchaser uses TCO Certified to identify more sustainable electronics, there’s a direct impact on industry. When procurement stands by supply chain responsibility criteria coupled with a system of verification and accountability, we have seen a direct correlation with improvements in areas like factory working hours and worker safety. What our experience – and our interactions with brands – tells us is that customer demands are an important driver of progress in supply chain responsibility. Put simply, when procurement speaks, industry is more likely to act.

To illustrate, let’s look at some specific examples from IT – one of the most complex, multinational supply chains – to see why procurement needs to add their voice to supply chain sustainability.

Research from our 2020 impact report shows that almost 80% of a computer’s lifetime greenhouse gas emissions happen in the manufacturing phase, not on the desktop! So while you might assume that buying energy efficient IT on your regular three year cycle is a sustainable option, it’s only perpetuating the emissions problem and “take, make, dispose” linear economy. Taking a more circular approach by extending product life and demanding lower emissions (or greater use of renewables) from suppliers are good places to start.

Impacting what happens on the factory floor across the other side of the world can seem like a daunting task for procurement. Complicating the problem is inadequate enforcement of labor laws in countries where electronics are manufactured. It’s critical for procurement to demand accountability on working conditions from their vendors. Rigorous criteria coupled with independent verification are important in the procurement toolbox.

Incredibly, only around 1% of the thousands of chemicals in use today are tested for human health or environmental hazard. While some of the most toxic substances are banned, more work needs to be done to identify safer alternatives for use in plastics, components and essential processes. Procurement can influence progress by engaging in multi-stakeholder initiatives and third party certifications that are currently yielding results.

Procurement is one of the strongest influences on sustainable product ecosystems, including what happens in the production phase. Design your sustainable procurement program to include both environmental and supply chain responsibility and signal these priorities to your suppliers – early and often. Reputable certifications or independent partners can help you get started, set criteria and verify progress.