Sustainable Procurement: Still a Priority for European Firms

Brand protection and cost management are still the driving factors behind Sustainable Procurement initiatives, but compliance with environmental regulations has taken on increased importance.

According to the fourth-annual HEC Paris -- EcoVadis -- Sustainable Procurement Benchmark Report, Sustainable Procurement is a top priority of procurement directors in Europe. And despite the global financial crisis, they continue to invest in the tools and processes to drive programs that fuel environmental innovation and compliance with Corporate Social Responsibility (CSR) initiatives.

"Sustainable procurement is an integral part of the new model that companies must adopt to survive and thrive in today's global economy," said Professor Olivier Bruel, Associate Professor, Coordinator of the Operations Management & Information Technology Department at HEC Paris. "Our research clearly shows that the economic dimension of sustainability -- total cost of ownership reduction as well as supporting suppliers in dire financial situations -- is a critical focus for companies as they attempt to weather the financial storm while continuing to run their businesses in a socially and environmentally friendly manner."

Conducted with support from Ariba, Inc, a solution provider of spend management,the study found that:

  • Sustainable Procurement is considered an "important" or "critical" objective by 90% of procurement directors at comparable levels to 2007.
  • Brand protection and cost management are still the driving factors behind Sustainable Procurement initiatives, but compliance with environmental regulations has taken on increased importance.
  • The vast majority of respondents have moved toward operational implementation of sustainability programs, with over 80% citing that they had initiated a program in 2008.
  • 35% of companies surveyed intend to increase their investments in Sustainable Procurement despite budget cuts prompted by the recession.
  • 37% of companies have put in place a Sustainable Procurement department and half have raised buyer awareness through training on Sustainable Procurement concerns and practices.
  • Usage of tools specific to Sustainable Procurement has significantly evolved, with a special focus on solutions for supplier evaluation and risk analysis across procurement categories.
  • 75% of companies interviewed are now integrating CSR into their sourcing process, with 30% allocating significant weight to these criteria in the grading and selection system.
  • 75% of companies use Sustainable Procurement criteria to measure the performance of their suppliers on an ongoing basis.

"After four to five years of intense activity towards Sustainable Procurement, companies now have the tools and processes needed to actively contribute to CSR programs and deliver measurable results" said Olivier Menuet, Sustainable Procurement Director, SNCF (French National Railways Company). "Now is the time to move forward and to start realizing the benefits that such solutions can provide."

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