Demand for more sustainable and ethical supply chains has increased dramatically over the last several years, and while the heightened push is a cause for celebration, it has not necessarily clarified the practical steps companies should take. In fact, as elaborate ESG campaigns have become more commonplace, understanding how to create and develop the most meaningful and tactical programs has become even more convoluted and fractured.
During Procurement Foundry’s recent sustainability conference, Seb Butt, Sustainable Procurement Pledge co-chair and Craft’s General Manager – EMEA, discussed how and why procurement teams should seek out and get involved with professional, community-focused networks and organizations for outside help. Many procurement leaders who are tasked with developing their ESG initiatives, for example, are not even familiar with the UN’s 17 Sustainable Development Goals (SDGs), the basic framework under which most legislation and corporate policies are derived.
But even if you’re a procurement professional with strong foundational knowledge in sustainable supply chains, the ever-changing rules, practices and regulations still require a robust community that provides benefits that traditional consultants are not equipped to offer.
Check out the summarized version of how and why to collaborate with other supply chain and procurement leaders, as well as how to stay strategic and intentional about your organization’s ESG efforts.
Key Gaps to Close
Procurement teams struggle with not only understanding where to start but how to achieve success from a variety of angles. From the tactical to the strategic, there are 4 main types of gaps that procurement and supply chain professionals encounter when implementing and overseeing their programs:
Many business leaders and professionals do not understand the basics of sustainability best practices, let alone sustainable procurement. There aren’t many books or courses out there to get a solid foundation, and with new legislation being discussed or proposed on a near-constant basis, it’s hard to know which aspects of ESG to prioritize right away. With real-life case studies and resources that provide both foundational knowledge and more advanced concepts, network-based support can bridge knowledge gaps that would otherwise take significant time and money to invest in via consultants or outdated courses.
There is no shortage of enterprise applications that claim to solve procurement teams’ burdens, or alleviate the global supply chain burden. And with procurement leaders having little time in their day to shop for the right technology solution, analysis paralysis quickly becomes quite real during the search. Leaning on those who have already tried certain strategies and tools can help steer you in the right direction when it comes to the right supplier intelligence, risk management or ESG compliance platforms. After all, consultants can help from a strategic perspective, but many, if not most, do not have hands-on experience with the latest tools and systems that may or may not save a department significant time. Organizations such as the Sustainable Procurement Pledge have easily digestible resources and directories to help navigate the complexities of various solutions by use case, team or risk area.
If you have expertise in a particular area that would push forward your organization’s ESG initiatives or help them comply with new legislation, you might be in a particularly unique position to collaborate cross-functionally and with leadership to kick off new processes, projects and more. But, especially in the case with large, established organizations, simply having a good plan is not enough. There is often a culture that prefers adhering to the same policies, rules and information rather than shaking up the status quo. Hence, gathering support and guidance from outside of your organization, as well as getting tips on how to have the right types of conversations and developing strong business cases is a critical yet often overlooked part of the process.
While traditional consultants can help with some aspects of this gap, the combination of high costs, potential conflicts of interest and singular perspectives still place a high burden on procurement teams that don’t translate to positive ROI.
Similar to the confidence gap, having guidance to bridge leadership gaps requires deep understanding of the ways in which upper management and above need to buy in to strategic changes, new investments and more. C-suite sponsorship is a key factor to success, and learning from other leaders in this area will only empower and equip you and your team for success.
Strategic and tactical ESG approaches vary not only by company but by geography as well. For example, Seb Butt points out that European firms tend to focus more strongly on environmental sustainability – as evidenced by new EU legislative proposals and regulations – and there is an urgency to lay the foundation for Scope 3 carbon emission tracking. Conversely, while the emphasis on climate change reporting and Scope 3 emissions is not as strong in the US, there is more investment stateside into supplier diversity & inclusion resources. Leaning on each region’s “areas of expertise” saves lots of time, effort and gets everyone closer to fulfilling the 3 main pillars of ESG.
A few procurement leaders, while important, can only go so far in achieving ambitious ESG goals that are ethical and also compliant with current, upcoming and proposed regulations. Hence, relying on professional network nonprofits such as the Sustainable Procurement Pledge can provide the right balance of practical tools and resources coupled with strategic consult.