Tackling Climate Change Challenges in Procurement

Author: Sarah Shannon
Date:  October 4, 2023

Key Takeaways from our Procurement Round Table

At Pulse Market, we're eager to stay up-to-date with industry trends and addressing important issues that affect Procurement Consultants. In our second Procurement round table of 2023 we talked about how climate change is a challenge in procurement. We brought together procurement experts who shared important insights.

So you can stay up to date too here, are the main points:

1. Climate Change Awareness: We're in no doubt climate change is a big problem today. It's not something people should argue about anymore. We can see its effects on the weather and the environment. This shows how urgent it is for businesses to deal with climate change with support from procurement teams.

2. Different Challenges for Different Organisations: Climate change affects organisations in different ways depending on what they do and where they operate. For example, if a company provides services, makes products, uses raw materials, or processes things, their challenges are different. We also talked about two types of carbon emissions: the ones that come from day-to-day activities and the ones that are hidden in products. Each needs its own solution.

3. Measuring and Holding Accountable: One big problem is figuring out how to measure if a company is being sustainable and making sure they do what they say they will. Even though people are asking more questions about sustainability, it's still hard to know if companies are doing the right things.

4. Government Rules: Governments are making rules that force companies to be more eco-friendly. These rules push companies to use fewer resources and be more responsible when they buy things.

5. Incentives from Inside Companies: Companies are making their own rules too. They are using incentives like extra charges for carbon emissions to make their leadership team and employees act in a more eco-friendly way. Also, some bosses are getting bonuses based on how well the company does with sustainability.

6. ESG Programs: Many companies are joining programs that care about the environment and society. These programs cover climate change and other important issues. This shows that companies want to do better.

7. Making Things Standard: We need to have clear ways of doing things and measuring them to make sustainability a standard. But it's not easy to balance being eco-friendly with the cost of things.

8. Paying More for Eco-Friendly: Some companies are willing to pay more for things that don't harm the environment. They're also thinking about adding fines or extra charges for things that hurt the environment.

9. Being Open and Honest: Transparency in disclosure is crucial in making informed procurement decisions. Transparency in supply chains, especially regarding sustainability issues, will help overcome the challenge.

10. Sustainability vs. Social Value: Some people think that social issues are more important than environmental ones. We talked about how we need to think of both as equally important.

11. Keeping an Eye on Things: Monitoring and Standardisation of climate change efforts is becoming a necessity ahead of regulations like SECR (Streamlined Energy and Carbon Reporting) which may become auditable in the future.

12. Consumer Influence: People's purchasing power can and will have a big impact. They are asking questions about where products come from and how they affect the environment.

13. Companies Being Responsible: Companies that lie about being eco-friendly can get in trouble and have to pay hefty fines. This should move companies forward in wanting to do the right thing, but it could also make them risk averse or not care at all.

14. Procurement Consultants' Role: We talked about how people who help companies procure products and services can educate clients about how to do business better in a more responsible and sustainable way.

Ultimately, our round table discussion emphasised that climate change is increasingly more important in procurement decision making processes and supplier management. There are many challenges still to overcome, from measuring and accountability to regulation and satisfying consumer demand. We believe that by working together and staying informed, we can help our clients make more informed procurement choices and create a better future.

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