By Richard Edwards
The global economic crisis has failed to have a knock-on effect on green procurement, according to the findings of a recent study by the Supply Chain Management Institute (SMI) of the European Business School (EBS).
Green and sustainable procurement today – A perspective on leading European companies, which was published in the BrainNet Science Edition, surveyed leading figures from 49 European companies boasting a collective spend of more than €137bn.
The study found that 63% believed that the global slowdown was not having an impact on their green and sustainable procurement programs.
A focus on suppliers was identified as one of the key differentiators between top performing companies and their peers, although fears remain that firms are still not doing enough to ensure the ethical credentials of their supply base.
“Many companies are not adequately informed about the time bombs that are ticking away in their added value chains,” said Simone Luibl, practice head, green procurement at BrainNet, the co-author of the study. “After all, it’s not just about high standards within their own four walls: overlooked environmental legislation, poisonous substances in product components or suppliers employing child labor can damage the company’s image long term and bring with it serious financial and legal consequences.
“The application of a company’s own social standards and environmental guidelines should therefore also be a key criterion when choosing a supplier. The best price isn’t of any help whatsoever if, for instance, the supplier is taken to court over environmental offenses that taint the image of the customer. Many companies have learned this lesson the hard way in recent years.”
Sustainable procurement was more prevalent in companies which are positioned more closely to the end customer, the report found, while those businesses adopting a proactive approach were identified among the top performers.
“The support of top managers makes a crucial difference as to whether a company can achieve the position of ‘best performer’ in sustainable procurement – this is an even more powerful driver than legal requirements,” said professor Constantin Blome, research director in emerging markets at the SMI. “The successful pioneers of ‘Green and Sustainable Procurement’ also focus on long-term, cross-departmental strategies. For stragglers, sustainability is frequently over and done with once a project is completed.”
