Consider the results of the 2017 Sustainable Procurement Barometer, recently released by EcoVadis and HEC Paris. The data, gathered from supply chain professionals around the world, shows multiple business drivers behind a global maturation of the supply chain sustainability market. The research found three primary drivers of sustainability:
- Brand reputation – identified as a critical factor by 63 percent of organizations;
- Risk mitigation – identified as a critical factor by 61 percent of organizations; and
- Compliance – identified as a critical factor by 57 percent of organization.
For organizations looking to expand their sustainable footprint, supply chain transparency plays a critical role. However, only 15 percent of organizations have complete supply chain visibility into the CSR and sustainability performance of both tier one and two suppliers. Beyond that, only six percent of organizations report having full visibility into tier three suppliers and beyond, according to the research.
While supply chain visibility continues to be a top challenge for procurement organizations today, nearly every organization surveyed (97 percent) places a high level of importance on sustainability. This consensus among supply chain leaders illustrates just how established the sustainable procurement field has become — a major development in less than 10 years’ time.
Interestingly, the report found that over the past three years, the sustainable procurement landscape has shifted its emphasis away from environmental issues and toward social, labor and business ethics. Consider the following findings:
- Only 18 percent of organizations are placing significantly more importance on the environment today than they were three years ago;
- 33 percent of organizations are placing significantly more emphasis on social and labor issues than three years ago; and
- 33 percent are placing significantly more emphasis on business ethic.
Consumers are also making their preferences felt when it comes to responsible sourcing. Unilever recently surveyed more than 20,000 people across five countries to gauge sentiment around brands using socially and environmentally responsible practices. The study found that one third of consumers intentionally buy from brands that are doing social or environmental good, an opportunity that represents more than one trillion dollars for brands that make their sustainability credentials clear.
While the sustainable procurement landscape is still in its infancy, it’s rapidly growing and maturing across the globe. The increase in consumer pressure, and the competitive benefits of operating in a sustainable fashion, will continue to push companies to become more socially responsible and scale their sustainability efforts. This evolution will set the stage for a new phase of sustainable procurement maturity in 2017 and beyond—one where the leaders continue to generate tangible business value and scale programs further, and the laggards either get in the game, or risk falling dreadfully behind.
—Pierre-Francois Thaler, co-founder and co-CEO of EcoVadis.
EcoVadis is a supplier sustainability ratings company that helps organizations institute corporate social responsibility and various sustainability programs. EcoVadis Twitter: @ecovadis