Sustainable Procurement: Reducing Scope 3 emissions

Increasing numbers of large enterprises and mid-market businesses have published their Net-zero strategies setting out how they will reduce their carbon emissions. Many businesses are committing to achieving significant reductions in CO2 emissions by 2030. Sustainable procurement has to be a factor in achieving these ambitious net-zero targets and timeframes.

However, sustainable procurement practices are still developing and evolving. Procurement professionals across industries and markets are debating how net-zero and the reduction of Scope 3 emissions can be achieved and their approaches to this challenge. Organisations will need to consistently refine their approach to sustainable procurement, keep up with market trends and new approaches to purchasing. In essence, they must seek innovative ways to reduce the carbon emissions of their businesses.

Sustainable procurement in challenging conditions

When market conditions are challenging, the focus in procurement usually reverts to cost savings and a focus on price. However, the assumption that sustainable purchasing is always more expensive needs to be dispelled. It is possible to implement initiatives that achieve triple bottom line benefits if you reconsider the definition of value. Triple bottom line results meaning financial, social and sustainability benefits. The key is to realise the commercial and social value of environmental led initiatives.

In turn this will also create competitive advantage, in essence, people like to work for and buy from sustainable brands.

Three approaches to sustainable procurement

In our work with clients, we have found businesses take three approaches.

Flagship

Flagship sustainability initiatives that have a material impact on their organisations carbon emissions such as a vehicle fleet, business travel or real estate. This approach is useful for addressing your most carbon intensive areas and giving your business a head start in scope 3 reduction.

Programmatic

A programmatic approach combines a range of large and small initiatives which together make a significant contribution over time. A programmatic approach is useful in that it is comprehensive, and this level of rigour may be able to unlock carbon reduction in areas previously not identified. In contrast, single initiatives or interventions will rarely be enough for a business to achieve ambitious net-zero target.

Structural

Structural changes involve embedding sustainable practices and processes into business as usual in order to achieve long-term change. A good example is the adoption of sustainable procurement policies throughout the sourcing and purchasing of new goods and services or contract renewals. This approach is a necessary complement to flagship and programmatic approaches.

Tender Requirements focussing on Sustainability

We have also seen more mid-market and large enterprise businesses increasing the sustainability requirements placed on their suppliers. Many are using specialist sustainability questionnaires to deliver more accurate and consistent understanding of how their suppliers can contribute to their net-zero strategies.

In addition, under the ‘Government Social Value requirements, Model Assessment Criteria version two’, bidders are able to achieve points by demonstrating a commitment to sustainable practices. The criteria include: “Other activities to support relevant sector related skills growth and sustainability in relation to the contract (MAC2.2) and Influence staff, suppliers, customers and communities through the delivery of the contract to support environmental protection and improvement (MAC 4.2)”.

To continue to bid successfully, businesses will need to achieve these standards. Sustainable business operations can be a point of competitive advantage.

How we can help you

We can help you develop your sustainable procurement strategy and define how you drive change in your supply chain to reduce your Scope 3 emissions. Our goal is ensure this results in a competitive advantage and improves your business’s bottom line.

If you would like to find out more about how we can help you, please contact Robert Wild.