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Dear sustainability experts,
Last week, we delved into the intricacies of measuring and reporting on procurement sustainability, empowering you with tools to track your progress in sustainable initiatives. This week, we’re taking a bold step forward. What trends will shape the future of sustainable procurement? Discover the answers in our last edition for this series: Edition 10: The Future of Sustainable Procurement: Trends to Watch. Whether you're a CEO or a Procurement Manager, these insights will position your business ahead of the curve.
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This Week’s Topic: The Future of Sustainable Procurement: Trends to Watch
SCM Takeaways
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This Week's Topic:
The Future of Sustainable Procurement: Trends to Watch.
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Adopting sustainable procurement practices offers businesses immense potential for boosting revenue and cutting costs. Companies that fully integrate ESG principles often experience reduced expenses, improved growth trajectories, and higher valuation margins. By implementing closed-loop supply chains and prioritizing ethical procurement, organizations can significantly enhance their environmental and social contributions. For instance, Unilever achieved savings of $1.27 billion over two decades by focusing on sustainable sourcing.
However, the transition to sustainable procurement is far from straightforward. Common hurdles include insufficient sustainability knowledge, constrained resources, resistance from suppliers, and inadequate governmental support. Despite these challenges, the urgency for action remains clear.
Corporate supply chains often have a far greater environmental impact than direct operations, underscoring the critical importance of sustainable procurement in shaping a better future.
11 Procurement Trends for 2025 (Source: Procurement Tactics, n.d.)
1. Digitalization in Sustainable Procurement
Case Study: Nestlé’s Blockchain for Supply Chain Transparency
Situation: In the late 2010s, Nestlé faced increasing pressure from consumers and stakeholders to enhance transparency in its supply chain, particularly regarding ethical sourcing of raw materials like coffee and cocoa. The company recognized the need to implement digital tools to address concerns over child labor, deforestation, and unfair trade practices.
Tasks:
Ensure full traceability of coffee and cocoa beans from farm to shelf.
Improve consumer trust through greater transparency.
Create a scalable digital solution for monitoring supply chain sustainability.
Actions:
Partnered with IBM to integrate blockchain technology into its supply chain.
Allowed customers to trace the origins of their products via QR codes.
Implemented AI tools to assess suppliers’ compliance with ethical and sustainability standards.
Results:
Achieved near-complete traceability for key product lines by 2022.
Increased consumer trust and satisfaction by 20%.
Enhanced efficiency in identifying and addressing supply chain violations (Nestlé, 2022).
2. Decarbonizing Supply Chains
Case Study: Microsoft’s Carbon Neutral Commitment
Situation: In 2012, Microsoft identified its operations and supply chain as significant contributors to carbon emissions. With growing public scrutiny on tech companies’ environmental footprints, Microsoft aimed to lead the industry in sustainability.
Tasks:
Achieve carbon neutrality across all operations, including supply chains.
Collaborate with suppliers to adopt renewable energy and reduce emissions.
Develop technology solutions to assist global sustainability efforts.
Actions:
Introduced an internal carbon fee to fund sustainable initiatives.
Partnered with suppliers to integrate renewable energy and energy-efficient technologies.
Invested in carbon capture and removal projects globally.
Results:
Became carbon neutral by 2014.
Pledged to be carbon negative by 2030, influencing suppliers to adopt similar goals.
Improved supplier collaboration, reducing emissions across the supply chain (Microsoft, 2023).
3. Circular Economy Initiatives
Case Study: Patagonia’s Worn Wear Program
Situation: As a leader in outdoor apparel, Patagonia identified the environmental harm caused by the fast fashion industry, including resource depletion and textile waste. The company sought to integrate circular economy principles to minimize its environmental footprint.
Tasks:
Promote product longevity and repair over new purchases.
Reduce waste by creating a closed-loop system for apparel.
Educate consumers on sustainable consumption.
Actions:
Launched the Worn Wear program, enabling customers to repair or trade in used gear.
Partnered with recycling facilities to create new materials from returned products.
Organized educational campaigns on sustainable consumption.
Results:
Diverted thousands of tons of textile waste from landfills annually.
Increased brand loyalty and repeat customers through repair services.
Set a benchmark for sustainability in the apparel industry (Patagonia, 2022).
4. Regulatory Compliance and Global Standards
Case Study: Siemens’ Compliance with EU Green Deal Directives
Situation: The European Union introduced the Green Deal in 2019, setting stringent requirements for carbon neutrality and sustainable practices by 2050. Siemens, a global leader in industrial manufacturing, faced significant compliance challenges across its complex supply chain.
Tasks:
Align procurement processes with EU Green Deal requirements.
Train internal teams and suppliers on regulatory changes.
Develop solutions to monitor and report sustainability metrics.
Actions:
Integrated ISO 20400 into procurement strategies to ensure sustainable sourcing.
Launched digital platforms to monitor suppliers’ compliance with Green Deal standards.
Partnered with regulators to develop best practices for reporting and compliance.
Results:
Achieved full compliance with Green Deal standards by 2022.
Reduced supply chain emissions by 30%.
Strengthened relationships with regulators and stakeholders (Siemens, 2023).
5. Supplier Diversity and Inclusion
Case Study: PepsiCo’s Supplier Diversity Initiative
Situation: PepsiCo recognized the lack of diverse suppliers in its procurement processes as a missed opportunity for innovation and equity. The company aimed to foster economic inclusion while meeting stakeholder expectations for corporate social responsibility.
Tasks:
Identify and onboard diverse suppliers, including women- and minority-owned businesses.
Allocate a significant portion of procurement spend to diverse suppliers.
Create long-term support programs to help small suppliers scale operations.
Actions:
Committed $1 billion annually to diverse suppliers through its Supplier Diversity Initiative.
Organized supplier mentorship programs to enhance business capabilities.
Partnered with industry groups to promote diversity in procurement.
Results:
Increased procurement spend on diverse suppliers by 25% between 2018 and 2023.
Enhanced supplier innovation through diverse perspectives.
Strengthened brand reputation as a leader in diversity and inclusion (PepsiCo, 2023).
SCM Takeaways
Why It Matters: Sustainable procurement trends like digitalization, decarbonization, and circularity are redefining global supply chains.
Example: Walmart’s Project Gigaton demonstrates how strategic sustainability initiatives can yield significant environmental and financial outcomes.
Connection: Integrating these trends enhances operational efficiency and strengthens your company’s brand reputation.
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Recommended Reading
"Sustainable Procurement: A Practical Guide to Corporate Social Responsibility in the Supply Chain" by Jonathan O'Brien
This comprehensive guide provides procurement professionals with actionable strategies to integrate sustainability into their supply chains. O'Brien outlines step-by-step processes for implementing sustainable procurement practices, emphasizing the importance of corporate social responsibility. Readers can expect to gain insights into reducing supply-side risks and driving positive social and environmental impacts through effective procurement. Amazon
"Responsible Procurement: Leading the Way to a Sustainable Tomorrow" by Stefan Aichbauer et al.
This open-access book serves as a practitioner's guide to tackling sustainability challenges within procurement and supply chain organizations. It offers practical insights and methodologies for integrating responsible procurement practices, aiming to lead organizations toward a more sustainable future. Readers will find valuable case studies and frameworks to apply in their professional contexts. Amazon
"Strategic Sustainable Procurement: Law and Best Practice for the Public and Private Sectors" by Colleen Theron and Malcolm Dowden
This book explores the legal aspects and best practices of sustainable procurement in both public and private sectors. Theron and Dowden provide a thorough analysis of how procurement can serve as a strategic tool for sustainable development, offering guidance on navigating the complex legal landscape associated with sustainable procurement initiatives. Amazon
C2B Takeaways
Everyday Sustainability Made Simple
Making sustainable choices doesn’t have to be complicated or preachy. It’s about small, practical steps that fit seamlessly into your daily life. Here are some simple, no-nonsense hacks that save time, money, and resources—without any extra effort or compromise. Let’s make sustainability something you do naturally, not something you stress over.
Smart Shopping Shortcuts
Hack: Use apps like Freecycle or Vinted to find pre-loved items at a fraction of the cost—or even for free.
Tip: Before buying new, search your local area for swap events or online groups where you can trade items.
Example: Need a new bookshelf? Check your local community boards or online swap groups; you might score one for free or trade it for something you no longer need.
Energy-Saving Made Easy
Hack: Plug all your devices into a power strip, and turn it off when you’re done to eliminate standby energy use.
Tip: Lower your thermostat by just 1°C—it can save up to 10% on your energy bill without much noticeable difference.
Example: Switching off your TV and game console with a single click on a power strip saves money and reduces energy waste.
Food Waste Fixes
Hack: Store leftovers in clear containers so you can easily see what’s inside and don’t forget about them.
Tip: Create a “use-it-up” recipe night to turn leftovers or nearing-expiry items into a fun, creative dinner.
Example: Turn leftover roasted veggies into a quick stir-fry or blend them into a soup for a no-waste meal.
Procurement Magazine highlights the top 10 industry trends shaping 2025, from addressing the talent gap among young professionals to the growing adoption of automation. Procurement remains a cornerstone of business operations, driving efficiency and value throughout global supply chains. As we look ahead, the industry faces a dynamic mix of opportunities and challenges that demand innovative strategies and forward-thinking leadership.
Strategic procurement planning is no longer a routine activity but a vital tool for sustaining a competitive edge in a rapidly evolving market. By harnessing advanced AI technologies and prioritizing sustainable sourcing, procurement teams can transform how they create value and manage risks.
In collaboration with industry experts, Procurement Magazine delves into the trends poised to define procurement success in 2025.
Top 10: Predictions for 2025 (Source: Procurement Magazine, 2024)
Top 10: Predictions for 2025 (Source: Procurement Magazine, 2024)
We Learned Today
Key takeaways:
Digitalization and decarbonization are critical for sustainable procurement.
Circular economy initiatives are transforming how we source and consume.
Supplier diversity isn't just ethical—it’s profitable.
Sources
Procurement Tactics. (n.d.). 11 Procurement Trends for 2025. Retrieved from https://procurementtactics.com/procurement-trends-2025/Unilever. (2023). Blockchain in sustainable palm oil sourcing. Retrieved from https://www.unilever.com
Walmart. (2022). Project Gigaton: Cutting emissions by 1 billion metric tons. Retrieved from https://www.walmart.com
IKEA. (2021). Sustainability through furniture take-back programs. Retrieved from https://www.ikea.com
Siemens. (2023). Compliance with EU Green Deal directives. Retrieved from https://www.siemens.com
Coca-Cola. (2020). Supplier Diversity Program: Driving economic inclusion. Retrieved from https://www.coca-cola.com
Procurement Magazine. (2024). Top 10: Predictions for 2025. Retrieved from https://procurementmag.com/procurement-strategy/top-10-predictions-2025
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