Skip to content
Search AI Powered

Latest Stories

Forward Thinking

Commitment to sustainable procurement is on the rise

2019 Sustainable Procurement Barometer shows that sustainability awareness is growing among buying and supplying organizations, but challenges persist.

Commitment to sustainable procurement is on the rise

From the top down, more businesses are recognizing the importance of sustainability practices, especially when it comes to procurement, according to the 2019 Sustainable Procurement Barometer, released this week by sustainability firm EcoVadis and the New York University Stern Center for Sustainable Business.

The study of more than 210 buying organizations and nearly 400 supplier organizations revealed that 81 percent have increased their commitment to sustainable procurement in the last year and that just 13 percent list "executive support" as a challenge to implementing such policies. The results indicate the growing importance of sustainability across global supply chains, the study authors said.


"Against the backdrop of an increasingly stringent regulatory landscape and growing pressure from stakeholders, it is evident that sustainability awareness is expanding among both buying and supplying organizations," the authors wrote in their executive summary to the report.

Sustainable procurement is the adoption and integration of sustainability principles into procurement processes and decisions; it encompasses both product and materials sustainability as well as the sustainability of supplier practices, according to EcoVadis, which provides sustainability rating platforms for global supply chains. 

The study also revealed the top three challenges to implementing sustainable procurement practices: a lack of internal resources, the inability to effectively and efficiently track supplier sustainability performance, and concerns about costs.

The study also found that most firms continue to measure sustainability progress from a compliance standpoint, "a trap that leads to limited engagement and lacks incentives to drive performance and long-term improvements," the study authors said. Sixty-six percent of procurement organizations cited regulatory compliance as a critically important aspect of their sustainable procurement programs, for example.

"The importance placed on regulations is quite striking, but not surprising given the global awareness and growth in supply chain due diligence and reporting laws. While keeping up with compliance is important, a compliance-only approach could compromise the business benefits awaiting companies that move beyond 'checking boxes' to truly engage suppliers," Pierre Francois Thaler, co-CEO of EcoVadis, said in a statement announcing the study's results. "Embedding programs into corporate strategy, leveraging external databases, and integrating them via a balanced scorecard approach will inherently address compliance concerns while also delivering long-term value."

Other study findings include: 

  • Fifty-eight percent of respondents say they are better able to mitigate risk through sustainable procurement, and 30 percent say their programs contribute to cost reduction.
  • Other benefits include innovation and access to new categories (25 percent) and improved procurement metrics (24 percent). 
  • Companies with mature programs reported more benefits across the board—risk mitigation (88 percent), cost savings (35 percent), innovation (29 percent), and improved procurement metrics (53 percent).
  • For 34 percent of procurement organizations, labor and human rights practices have become significantly more important over the past three years and 33 percent say business ethics have become more important.
  • Only 22 percent observed the same shift in environmental concerns.

Recent

More Stories

robots working in factories

North American manufacturers cut back on robot orders in Q1 and Q2

The North American robotics market saw a decline in both units ordered (down 7.9% to 15,705 units) and revenue (down 6.8% to $982.83 million) during the first half of 2024 compared to the same period in 2023, as North American manufacturers faced ongoing economic headwinds, according to a report from the Association for Advancing Automation (A3).

“Rising inflation and borrowing costs have dampened spending on robotics, with many companies opting to delay major investments,” said Jeff Burnstein, president, A3. “Despite these challenges, the push for operational efficiency and workforce augmentation continues to drive demand for robotics in industries such as food and consumer goods and life sciences, among others. As companies navigate labor shortages and increased production costs, the role of automation is becoming ever more critical in maintaining global competitiveness.”

Keep ReadingShow less

Featured

Logistics activity expanded in September
LMI/CSCMP

Logistics activity expanded in September

Economic activity in the logistics industry expanded for the 10th straight month in September, reaching its highest reading in two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.

The LMI registered 58.6, up more than two points from August’s reading and its highest level since September 2022.

Keep ReadingShow less
logo images ILA dockworkers union USMX ports

Strike ends: East Coast dockworkers return to work

Dockworkers at dozens of U.S. East and Gulf coast ports are returning to work tonight, ending a three-day strike that had paralyzed the flow of around 50% of all imports and exports in the United States during ocean peak season.

In identical statements posted to their websites, the International Longshoremen’s Association (ILA)—the union representing some 45,000 workers—and the United States Maritime Alliance Ltd. (USMX) said they had struck a deal.

Keep ReadingShow less
team collaborating on data with laptops

Gartner: data governance strategy is key to making AI pay off

Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, composite AI and supply chain data governance, according to a study from Gartner, Inc.

"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”

Keep ReadingShow less
manufacturing job growth in US factories

Savills “cautiously optimistic” on future of U.S. manufacturing boom

The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.

While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”

Keep ReadingShow less