What future will we build for the next generations? And why do we must act now?

This is a question with many answers and only one certainty: we – people, businesses and governments – are responsible for promoting actions that can significantly decrease the negative impacts of our activities on the planet.

When it comes to the procurement area and supply chain, being sustainable is no longer a choice. And it’s precisely for this reason that circular economy, ESG and supplier management are vital dimensions for the sustainability of the sector.

The theme, which is being more and more discussed within businesses, has procurement as the common thread of thoughts and transformations that must be promoted urgently.

It was with this growing demand in mind that ME’s B2B Summit 2021 promoted a panel called “The future of procurement is sustainable”, with the presence of big names in the market:

  • Dominic Schmal, sustainability director at the EDP Institute;
  • Murilo Zappelini, head of procurement for South America at ALPLA;
  • Francisco Cortinas, Supply Director at Hidrovias do Brasil;
  • Priscila Miguel, coordinator at FGV-CELog.

See below the key experiences of the guests of this event, about the buyer’s role in circular economy, ESG practices and supplier management.

Sustainability as an organizational culture

In the dictionary, the word “journey” has the meaning of “travel” or “walk”. The truth is that the race for sustainability never ends. It’s a means, not an end.

In the corporate world, the procurement area is one of the main protagonists in this journey. And sustainable purchases go far beyond the inputs chosen for their production.

It’s vital – and very challenging – assuring that the whole production chain doesn’t violate human rights. It’s also essential that there is no bribery or corruption in negotiations.

These and all other issues involving sustainability and compliance must be a priority on CPOs‘ agenda – whose mission is to broaden discussions within businesses.

In spite of this, the procurement area can’t and shouldn’t walk alone in the sustainable journey. The entire company must act responsibly and commit to ESG aspects.

For sustainability to become a reality – that is, to become a culture, circular economy, ESG and supplier management must comply with more than legal aspects.

Circular economy goes far beyond disposal

It’s almost impossible to talk about sustainable actions without rethinking, reducing, reusing and recycling materials and energy. These are the 4 Rs of sustainability linked to circular economy.

In procurement, it’s necessary to resignify the production model and product disposal. The key point here is the mindset change of the responsibility of organizations in this regard.

When talking about product change, for instance, most of times, the first question that arises in organizations is price – and not the added value.

In this sense, the procurement area must leave the orchestra and go to the stage. Only in this way the area will be able to promote significant changes for organizations and society.

Increasingly, aspects that promote the circular economy, such as product life cycle assessment and ecodesign, should be part of the strategy of businesses.

Therefore, more than stimulating circular economy, sustainable procurement will help businesses to stay competitive in a fierce market.

Supplier engagement starts at home

Like circular economy and ESG, supplier management and procurement must walk together in the journey towards sustainability.

In businesses, sustainability policies include supply requirements, but unfortunately they aren’t enough to ensure good practices from suppliers.

That’s why it’s important having supplier management practices, such as certification – a stage in which tax, labor and environmental aspects are checked, among others.

In addition to well-designed processes, in this journey, suppliers must be seen as strategic partners, with a close relationship – and must be heard, of course.

To comply with all such requirements and being able to engage suppliers, it’s crucial that sustainability, in fact, happens from inside out – and not the other way around.

We saw above the key points discussed in the panel called “The future of procurement is sustainable: circular economy, ESG and supplier management”, held at ME’s B2B Summit 2021.

In addition to environmental issues, adopting policies that consider aspects of diversity and inclusion are no longer a trend, and have increasingly become a reality.

How circular economy, ESG and supplier management issues have been addressed in your company?

Share your views in the comments field!

See you next time!