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Sustainable approach benefits business

(chinadaily.com.cn)
Updated: 2008-07-09 09:36

Founded in 1886 in Boston, Arthur D Little (ADL), the world's first management consulting firm, launched a new white paper urging businesses to bring sustainability to the supply chain.

As stakeholders become increasingly insistent that "promises made" by the CEO should be "promises delivered", business leaders will need to extract and manage increasing innovation from suppliers as well as employees to deliver on commitments to sustainable performance, according to the consultancy.

ADL last month launched the white paper, "Green Purchasing Power," exploring how regulation, rising energy costs and increased consumer concern with ethical business are driving corporations across sectors to consider sustainable procurement to lower costs and build more valuable business practices.

The paper looks at how leading businesses are benefiting from a sustainable approach to procurement through reduced costs, lowered risk levels, increased stakeholder value and increased scope for innovative products and pricing.

However, key to achieving these benefits is correctly positioning sustainable procurement within an organization's wider management strategy; ADL argues that this means buy-in from the top. In this latest paper, ADL examines the implications of green procurement on the CEO's accountability for the company's supply chain.

"Companies operating in this changing business landscape have three strategic choices in relation to sustainable procurement: react, adapt or anticipate," said Richard Clarke, Director and Global Leader of ADL's Sustainability and Risk practice.

"Businesses interested in reaping significant competitive benefits from sustainable procurement need a strategy of anticipation through systematic evaluation of the company's procurement options, followed by implementation of measures designed to maximize the business benefits delivered through procurement.

"In this white paper we offer companies specific advice about how best to implement these systems into their ongoing procurement processes."

What is sustainable procurement?

Sustainable procurement is an approach to purchasing products and services that takes into account the economical, environmental and social impacts of buying choices. A sustainable procurement approach includes best value-for-money considerations, optimizing the price, quality, availability and functionality of a required product or service.

It also includes the impacts of the product or service on the environment over its entire lifecycle, and social aspects of the product or service's origin and use, such as poverty elimination, international equity in distribution of resources, labor conditions, and human rights.

What is it not?

Procurement is not sustainable if it is divorced from business tangibles. Nor can procurement be defined as sustainable if it is an effort to gain approval from unspecified or irrelevant 'stakeholders', regardless of whether that is at the expense of the business. In this paper we explore the drivers behind a sustainable approach to procurement, its influence on CEO's overall accountability, and how such an approach can be placed in the context of the wider strategic choices facing a company. We outline the profile of a "sustainable" supplier and present a view of the spectrum of procurement strategies taken by today's companies.

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