When purchasing or signing contracts with partners and suppliers, you look at different aspects, like quality, price and delivery time. Sustainable procurement adds social and environmental aspects to this list of important requirements, especially when dealing with foreign suppliers.
When adapting sustainable procurement, one avoids risks that could harm the product or the company’s reputation. But most importantly: one takes responsibility for social and environmental consequences of the production process.
By being committed to sustainable procurement, the company integrates social and environmental values into the company’s supply chain.
Follow a Sustainable Procurement Checklist
The following sustainable procurement tips can guide you through the procurement process.
The easiest way to start sustainable procurement, is to follow a step-by-step sustainable procurement checklist provided by other, like the sustainable procurement checklist of Ecovadis.
It is worth noticing that sustainable procurement is different for every company. More than anyone, you know best what sustainable issues your company focuses on and where opportunities for improvement might be found.
What can you do? Start with a sustainable IT.
Tip: Be analytical. Think deeply and investigate thoroughly your supply chain and suppliers. Remember that unethical aspects in the supply chain might be hidden from you by suppliers.
Avoid risks when purchasing
Especially when buying products or resources abroad, it is important to know the origin. Production can take place in another country than the country where your supplier is based. As a result, production can be done under other circumstances.
Think about child labour, long working hours, underpayment of workers, bad working conditions and discrimination. Do you want this to happen in your production chain? If not, make very sure it doesn’t happen.
By prohibiting these activities in your supplier contract and monitoring whether the contract is followed by the supplier.
Although it is not your intention and you didn’t know about these activities happening in your production chain, you might be responsible and blamed for it, resulting in a damaged reputation and possible fines.
Gain insight into the raw materials in your production chain
Ram materials may have limited availability, because of for example:
- Possible exhaustion
- Price fluctuations
- Social risks, such as poor working conditions or environmental pollution
How? The Raw Material Scanner gives insights in possible risks at play in retracting the raw materials used in your production chain. The scanner also gives insights in what you can do to reduce these risks. This way, the scanner supports you in adapting sustainable alternatives in time.
Know your production chain
You might be ‘oblivious’ or have no idea about all activities in your production chain. However, customers, partners, civil organisations and governments hold you responsible. Governments require you to identify and prevent risks in your supply chain. This is called risk management or due diligence.
Or in other words, you’re not allowed to be ‘oblivious’, but you are in fact obligated to act in a socially responsible manner in relation to the entire chain.
Corruption in other countries
When trading or doing business abroad, you might experience corruption and bribery practices.
Unfortunately, corruption is perceived as normal in many countries. Foreign companies take part in corruption, as they see this as the most efficient way to extract resources, do business and/or trade. However, this way foreign companies keep corruption alive.
In countries of origin of these international companies, corruption might be punishable by law. Also when corruption takes place abroad.
It is advisable to really study ways to avoid situations that might lead to corruption. For example, by using models for international contracts.
In the most sever cases, corruption is used as a way for foreign companies to extract resources in a way that the country nor the local people profit, but only local politicians and foreign companies profit. Locals and the (third world) country are left with environmental damage and high costs. For example the corruption activities of Shell in Nigeria.
Or, like in the case of Odebrecht in Latin America, large infrastructure projects come at a high cost, so national politicians receive millions in bribes. Of course, these countries technically cannot afford these high costs of these projects. It is inexcusable that politicians receive millions in bribes when millions of citizens live in poverty.
Does your company really want to take part in these ‘criminal’ activities?
Sustainable procurement and the government
Governments should be an example in sustainable procurement. This included at first the national governments. These should be followed by regional and local governments, like provinces and municipalities.
The government has the capacity and resources to pursue a socially responsible procurement, setting the path for corporate organizations to follow in its footsteps.