Environmental, Social and Governance (ESG) metrics have gained traction as ways to hold companies—including their supplier accountability for sustainability efforts. These metrics vary widely, including: tracking carbon emissions, addressing human rights risks like zero child labor in the organization’s supply chain or understanding the circularity of materials used throughout the supply chain.
Climate reporting is already mandatory in Europe and this past March the U.S. Securities and Exchange Commission (SEC) officially proposed its much-anticipated mandatory climate-related disclosure rules for publicly-traded companies in the U.S. With procurement teams on the front lines of sourcing and securing goods and services throughout the supply chain, it is critical to adopt a sustainability mindset in all decisions. This means everything from monitoring the materials that go into products or services to tracking suppliers and ecosystem partners and assessing their overall environmental impact as a result of how they do business.
Yet many procurement teams aren’t equipped with the strategy, expertise, tools and incentives to execute their organization’s sustainability goals. This disconnect surfaced in a recent Accenture and HFS Research (HFS) study of 350 enterprise leaders, including Chief Procurement Officers (CPOs). The study examined how sustainability links to procurement and the entire supply chain. The findings reinforce themes that emerged at the recent COP26 UN Climate Summit that leaders need to think bigger and more holistically to turn sustainability aspirations into action. For all the talk about striving to be green, what has become clear is that sourcing and procurement are integral to an organization’s sustainability agenda and preparation is key.