Considered by many to be the next key frontier for business, Social and Sustainable Procurement are finally getting the attention they deserve.
Ahead of the Big Ideas Summit 2016 on April 21st, we are taking a look at the key issues facing procurement in the coming years. We have asked experts and influencers in our community to share their Big Ideas on the themes we will be discussing on the day.
Here, our experts and influencers share their thoughts on the Big Ideas impacting organisations in the fields of social and sustainable procurement.
Matt Perfect, Founder of Something Great – “Impact Spending and Social Impact Measurement”
I believe “Impact Spending” is the next frontier for defining ‘value’ in procurement. That is, spending on goods and services with the intention to generate a measurable, beneficial social or environmental impact, alongside economic benefits.
Some might say that the history of procurement can be traced by our broadening definition of value. In the old days, our decisions were mostly price-based with little regard for ‘value’ at all. The evolution of strategic procurement brought with it a greater understanding of the importance of quality and service and the ‘value for money’ equation was born. Increasingly, risk and innovation have been added to the mix, and evaluation models such as Total Cost of Ownership have become much more sophisticated.
It is becoming increasingly apparent (both in theory and in practice) that organisations can no longer separate their profitability and growth, from the impact their activities have in society. As such, procurement and supply professionals must be able to account for, and measure, the impact of their spending.
There is much the profession can learn from the emerging field of social impact measurement. By incorporating such measures as Social Return on Investment and Theory of Change into spending decisions, we will unlock the next wave of procurement value for our businesses.
Charlotte Spencer-Smith, Marketing at POOL4TOOL
Regulatory pressure on companies to report on CSR criteria in supply chain is increasing – the UK Modern Slavery Act and the Dodds-Frank Act in the US are recent examples. ISO/DIS 20400, currently under development, will provide clearer guidance about what is expected from organisations wanting to implement sustainable procurement.
Improved supply chain transparency will put pressure on procurement organisations to build category-specific strategies and make sourcing decisions with sustainability in mind. Criteria, such as sustainability and labour ethics, will be increasingly included alongside financial and risk data as factors that go into processes like supplier management, sourcing, and contract management.
Extended information and third party content, specialising in sustainability data for supply chains and procurement organisations, are on the rise. But it will soon be indispensable to have this information deeply integrated into people, process, and technology to make CSR-positive sourcing decisions as easy as possible.
It’s a crucial part of the wider picture of value-based sourcing: developing sourcing decisions beyond the purchase price.
Jordan Holzmann, Founder and CEO at Cruxcee
In terms of the now, we are seeing procurement take an interest in what role they play in sustainability. Procurement is realising that they can make a huge impact in the way they source through the supply chain.
This is exciting to procurement professionals as their job now has a new lease on life, and they aren’t just feeling like they are saving money and going through the process of buying stuff. This will shape the procurement profession in the future too, as it becomes more strategic in achieving sustainability goals for the organisation.
In terms of the future, I see the concept of finite resources impacting the way we procure products. Concepts like cradle to cradle and circular economy are driving innovation through material use. Procurement will have to be more innovative than ever as the world shifts to more sustainable materials.
They must be on the lookout for sourcing decisions that make use of alternative resources, reduce waste and reclaim any unused materials. This also goes for materials that are toxic and do harm. Procurement must work to avoid these, and find materials that do not harm the environment.
Do you work in social or sustainable procurement? What are your Big Ideas in this area? Let us know and we could be discussing them on April 21st.
Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.