3-8-2016 | by Eric Baker
Sustainable procurement (known also as Green procurement) refers to the measures utilized by companies to ensure that business practices generate the maximum net benefit for both the company and the world as a whole. When making business decisions, companies practicing sustainable procurement take a wide set of variables into consideration alongside the traditional criteria of price and quality. These variables, categorized as environmental, economic, and social, have become known as the triple bottom line.
Let’s break down the triple bottom line and discuss some of the ways to incorporate sustainable procurement practices into successful business models.
In the last 25 years, the topic of the environment has had a large impact on the business world. Legislation limiting greenhouse gas emissions and conferences debating the impact of pollution have shaped many of the policies that companies choose to enact. So, in acknowledgment of these new protocols, administrations have begun implementing green procurement practices, taking careful measures to curb climate change and mitigate the over-consumption of scarce resources.
Many companies have taken to initiating environmentally-friendly measures such as installing energy saving light bulbs or commissioning projects made from easily renewable materials. One of the most cost effective trends involves cutting down on paper usage. Companies, especially small businesses, can now manage most of their business online, right down to closing contracts with electronic signatures and paperless contracts. Contract lifecycle is reduced, organization is made much simpler, and companies can enjoy cutting paper costs while also doing good for the environment.
Sustainable procurement also addresses social issues, typically those involving equality, diversity, and integration in the workplace. When companies enact new policy, they must gauge the impact that specific practices may have on the local community and take careful measure to ensure that the public’s welfare is in no way threatened.
An application of social sustainable procurement would be a commitment to corporate social responsibility (CSR). CSR refers to business practices that incur upfront short-term costs but also promote positive social change. Donations to charitable organizations as well as the use of ethical labor practices may cost upfront cash, but they demonstrate a company’s commitment to social responsibility.
Companies will of course take economic factors into consideration when making decisions, but those who practice sustainable procurement will take the process a step further. The decisions made by companies can have both positive and negative economic consequences on unrelated third-parties. Therefore, companies must make it their goal to enact policy that will be economically beneficial to as many people as possible.
On a global level, companies can promote free trade practices and make investments in developing countries. On the more applicable micro-level, sustainable procurement encourages economic distribution. Measures that create job opportunities in poorer areas as well as offering assistance to struggling local businesses not only enhances a company’s public image, but may also provide economic returns in the future.
For more information on Concord or how you can become more sustainable in business and procurement practices, call us at 844-693-7446.
- Sustainable Procurement (Wikipedia.com)
- Summary of Tools for Sustainable Procurement
- Consumer Social Responsibility
- What is Corporate Social Responsibility