5 Biggest Challenges of Sustainable Procurement and How to Overcome Them 

Growing environmental awareness has an enormous effect on customers' buying behaviors. Today, companies encounter an increasing number of conscious customers who want to know the social and environmental impacts of the products they purchase. Customers' purchasing decisions heavily depend on where the products come from and what they are made of. Suffice to say, due to this questioning, more and more customers prefer products from green suppliers. This being the case, companies become more willing to drive their business in a more sustainable direction, starting from their procurement processes. Therefore sustainable procurement and partnering with green suppliers have become a way for companies to address their customers' requirements rather than just an option.  

In this article, we tackle the sustainable supply chain in general. However, in particular, we will shed light on the 5 biggest challenges of implementing and maintaining sustainable procurement and how to overcome them. 

Why sustainable procurement? 

According to United Nations Development Programme (UNDP), sustainable procurement is simply a way to ensure that your company's products and services have the lowest environmental impact and most positive social results. A report released by PWC and INSEAD, investigating value drivers of Global 500 companies achieved through sustainable procurement, confirmed that companies' supply chain could account for up to 4 times the amount of carbon emissions of a company's regular operations. This proves that implementing sustainability into your procurement process is one of the most effective ways to drive progress on your company's sustainability goals in many aspects.  

Companies that implement sustainable procurement successfully are also found to benefit from cost savings, risk reduction, and revenue growth. PWC and INSEAD's report showed that the Global 500 companies achieved through sustainable procurement program as follows: 

• Up to 6 times payback in cost savings,  

• Up to 85 times payback through risk reduction, 

• Up to 58 times payback through revenue growth outcomes. 

On the other hand, some sustainable changes allow your company not only to experience environmental or economic benefits but also to improve its social impact, such as partnering and procuring from local businesses. When it comes to sustainable procurement, we can talk about the benefits of wealth coming full circle as well as the circularity of materials used in production. Including local businesses in your company's sustainable procurement processes is a great way to support the local economy. No doubt supporting the local economy positively affects your company's presence. Making intentional decisions to boost the local economy would eventually prove your company's royalty within the local community and increase your customer base.  

The challenges of implementing and maintaining sustainable procurement  

Implementing sustainable procurement processes and working with green suppliers prove that sustainable supply chains are essential to almost all businesses. However, Implementing sustainable procurement is challenging; it requires social, economic, and ecological factors while balancing economic efficiency.  

Here we share 5 biggest challenges you can come across while implementing sustainable procurement and some ideas for overcoming them. 

1. Lack of awareness of sustainability issues 

Even if your company has a sustainability strategy and accompanying targets, it wouldn't be easy to make any changes if your employees or team members are not aware of the issues you want to address. You can consider creating environmental and sustainability awareness among team members as the first step of any sustainability action you want to take. Understanding sustainability issues is vital for making your team members a part of the solution and allowing them to contribute toward the same goals. 

2. Limited understanding of sustainable procurement 

Limited understanding of sustainable procurement is one of the most common challenges procurement officers experience. People react differently to changing the system already in use or adopting a new way of doing business. Along the way, you might come across people resisting the implementation of sustainable procurement policies, either claiming that it costs money to the company or simply believing that it is unnecessary. As a competent procurement officer, you should be aware that most of the resistance is rooted in the lack of understanding of sustainable procurement. And the only way to overcome this is to increase awareness of sustainable procurement within your team and the company. Training and education sessions should be organized in the company to do so. However, you shouldn't forget that focusing on the environmental and social benefits of sustainable procurement is not enough. It is best to discuss sustainable procurement as a whole and mention the benefits of sustainability realized in day-to-day operations and its long-term benefits. 

3. The complexity of implementing sustainable procurement policies  

Let's put this out first; It is never easy to launch something new, and sustainable procurement policies are no exception if they are not a bit trickier. Establishing and implementing a new sustainable procurement approach requires new learning, training, and many additional activities that would take time and energy. However, it is best to put your team's time and energy into perspective. You must establish that you are working towards making your organization more efficient in the long term, so the work you put into this will pay off in the future.  

On the other hand, you should accept that you can't change everything in one go. It is better to pick your battle and clearly define what you want to achieve with the current sustainability efforts. Simplifying your goals will help you develop a unique sustainability definition for your company that reaches each organization member.

4. The difficulty of finding the right partners  

You may encounter difficulties finding low-impact, fair trade, or environmentally friendly partners during your sustainable procurement journey. However, adopting a more sustainable supply and chain doesn't necessarily mean that you need to change all your suppliers and start over. Your first step is to focus on your existing suppliers, explain your plans, and support them to work toward sustainability goals together. You can even set targets for your current suppliers to turn them into green suppliers while building your sustainable supply chain. 

However, there will be cases where it wouldn't be possible to continue working with your current suppliers. You have to look for and negotiate new relationships with other green suppliers when this happens. No doubt, finding new suppliers comes with its challenges; you can read more about the difficulties of finding green suppliers here and use Intengine's directory to find new suppliers.  

5. Lack of standardization in the definition of sustainability 

Sustainability seems like a simple concept for many. However, it is not easy to come up with a single definition. Almost every company has its terms to explain its sustainability actions. There is nothing wrong with that; on the contrary, it is one way to overcome the complexity of sustainable procurement policies. However, procurement officers must be aware of this lack of standardization. Understanding what sustainability means, change from company to company, supplier to supplier, will help you make the right decisions when choosing your partners. Otherwise, it is inevitable to pick unsuitable partners for your company.    

Where to start a sustainable procurement journey? 

Sustainability is a trending topic in almost all areas of life, and it is hard to go by without hearing the word itself. This popularity and the importance sustainability carries also bring its problems. Intengine works to remove these problems by making trustworthy and valid information about sustainability accessible to everyone. It provides the world's most comprehensive and relevant database of green suppliers to make implementing and maintaining a sustainable procurement procedure easier for your business. You can start by listing your business in our directory and using it to find your future business partners. 

Tags: sustainable procurement, procurement, supply chain, sustainable procurement policies