Dive Brief:
- In a recent survey of procurement professionals, just 38% said that ensuring environmental sustainability was within their scope of responsibilities, compared to the 72% who pointed to traditional functions like executing contracts and cost control, according to a study from the consultancy Efficio.
- Of the same group, 40% said that social sustainability was within their official duties, according to study, which surveyed more than 530 procurement professionals and nearly the same number of C-suite leaders.
- Amid data challenges and competing priorities, just 33% of business leaders said they were “very confident” in their ability to hit their goals on eradicating greenhouse gas emissions, according to Efficio. That share was around 40% for goals around waste reduction, resource consumption and improving social impact.
Dive Insight:
Supply chains make up the bulk of most businesses’ environmental and social footprints. That means in many cases that procurement is among the most critical units in making a business sustainable on a day-to-day basis.
Efficio’s study shows that both procurement teams and company management do register sustainability issues as priorities, but they still rank below mandates to cut costs and boost revenue and profits.
Among all business leaders, 93% said that revenue and profit maximization, and market share growth, were “very” or “extremely” important, compared to 66% who said the same about net-zero plans and 71% about delivering on social impact.
Those are still fairly high numbers, and they were even higher among C-suite executives. Still, gaps between profit priorities and sustainability show up elsewhere as well.
When evaluating suppliers, 63% of procurement professional say that their teams assessed third parties against traditional priorities such as financial strength and capacity to delivery, according to Efficio’s study. Compare that to 31% who said suppliers were assessed on ethics and governance and 28% on effective environmental stewardship.
Metrics matter, too. Among procurement staff, 66% said that their organization captures sourcing metrics around cost benefits and quality to measure the team’s success. But only 38% said their organization collects environmental sustainability metrics as a success measure and 28% collect metrics on carbon neutrality.
Chief procurement officers had a very different response to that question, with 59% saying they collect environmental sustainability metrics as a measure of success.
Efficio said in its report that this discrepancy could be because “CPOs are having to be too [focused] on compliance-based metrics and not the core ESG issues and opportunities that the teams can see from interacting with the goods and services on a daily basis.”
Some of the difficulties around meeting sustainability goals lay outside the company and with their suppliers. More than half (54%) of procurement professionals said that suppliers were unsure of their own environmental footprints, 40% reported difficulty in tracking fragmented suppliers and 35% said they lacked high-quality data sharing with suppliers.
But organizational challenges exist as well, with 46% reporting conflicting procurement priorities in which incentives are not aligned to climate-related goals. Around a third of respondents said there was a failure to embed ESG concerns within broader corporate policies.
