May 02, 2023 | Procurement Strategy
Corporate social responsibility is a business value of operating ethically and focusing on workforce well-being and the business’s carbon footprint. In the context of procurement, it is imbibing sustainable practices across the supply chain by collaborating with responsible suppliers, relying on alternative energy sources and sustainable materials and more.
Sustainable procurement is a significant pillar of CSR. It is one of the most significant ways businesses can meet their ESG goals.
Also, with businesses aiming to turn profits by promoting their environmentally and socially responsible methods – they need to walk the talk to make measurable changes.
They should collaborate with responsible suppliers, evaluate them critically and work with them to optimize raw materials, packaging and delivery routes.
For instance, if the company’s aims to lower its carbon footprint, the procurement team should evaluate supplier reports to see if they meet the desired green standards.
Here are some of the benefits of being a socially responsible business:
Sustainability and cost savings go together. The use of ethical sourcing, less plastic packaging, use of energy efficient equipment and reliance on renewable energy sources – cut risks of disruptions and legal penalties and optimizes the process which results in cost savings. Additionally, CSR practices like lean procurement and supply chain optimization boost efficiency and productivity, resulting in cost savings by reducing waste, cutting operational costs and improving supply chain responsiveness.
CSR in procurement enhances brand reputation. By displaying a commitment towards society and the environment, businesses can build trust with customers and differentiate themselves from competitors. Customers today are increasingly concerned about the social and environmental impact of the businesses they associate with.
Partnering with vendors and suppliers always has potential for risk. The supplier or vendor may be causing pollution, which can adversely impact the business’s brand. It may also have an economic impact by causing supply chain disruptions due to non-compliance with environmental regulations. Sustainable procurement ensures that the business only partners with suppliers who understand corporate social responsibility and comply with environmental regulations.
CSR in procurement can also mean implementing safe workplace policies and abiding by labor laws. Businesses report an increase in employee satisfaction, productivity and employee retention. Also, people choose to work for businesses with a good CSR reputation – this image of being an environmentally conscious company is a talent magnet.
To succeed in the long term, sustainability should be a priority all around the organization. It is crucial for a business’s overall growth. Moreover, transforming procurement strategies to lead sustainability can bring a meaningful change in the enterprise. It can boost profitability, increase employee retention, create stronger supplier relationships and increase positive brand perception.