Organisations recognise the role that strategic sustainable procurement can play in their long-term success with the delivery of key ethical, environmental and economic objectives when sourcing third-party products and services from suppliers and the extended supply chain. A focus on sustainable procurement ensures that an organisation’s core sustainable values are considered throughout the procurement lifecycle, and long-term supply strategies are future-proofed.

It can help companies build resilience and mitigate the risks associated with supply issues brought about by extreme and unexpected global events, increasing demand from emerging markets, and cost pressures brought upon by inflation and energy consumption. Another positive for organisations is their improved reputation brought about by responsible and ethical practices. By choosing sustainable suppliers and third-party products/services, companies may contribute to environmental conservation and reduced waste, greenhouse gas emissions and carbon footprint.

Ethical procurement may also positively impact employee morale and engagement improving their well-being and staff retention. It can also create opportunities for small businesses and promote local community development. In this blog, we are going to deep-dive into the many advantages and benefits of sustainable procurement and provide guidance on how best to achieve them.


The Benefits of Sustainable Procurement

Sustainable procurement provides a wide range of desirable benefits for organisations and directly affects all ESG (environment, social, governance) sub-dimensions throughout the organisation. It has a direct impact and influence at all stages of the supply chain; from bolstering internal compliance to regulations, ensuring a focus on business ethics to reducing waste and emissions and the reduction of environmental risks.

The application of end-to-end sustainable procurement provides significant improvement potential and has a positive impact on the entire organisation including its customers and suppliers. The research in our latest Transformative Procurement Survey highlights that for most organisations today, goals such as supply risk mitigation, supply chain resilience, and the contribution these can make to their sustainability targets are more important than aiming for further cost reductions in procurement. These are key goals that can be achieved with sustainable procurement, but more than that: highly cross-functional and collaborative procurement should be focused on embedding sustainability along all three ESG dimensions throughout the entire organisation.


Environmental Benefits of Sustainable Procurement

Sustainable procurement offers significant environmental advantages. By choosing suppliers committed to eco-friendly practices, organisations contribute to reduced carbon emissions and pollution, conservation of natural resources and biodiversity protection. This approach aligns corporate goals and objectives with a healthier planet.

Reduces Pollution and Carbon Emissions

Sustainable procurement plays a crucial role in reducing pollution and carbon emissions. By identifying and selecting environmentally responsible suppliers, organisations can minimise the use of harmful chemicals, waste generation, and energy consumption during production. This can also consider the entire lifecycle of products to reduce the overall environmental impact. Local sourcing (as opposed to global sourcing) or using efficient transportation methods decreases carbon emissions associated with long-distance shipping. 

Energy Efficiency

Organisations adopting a sustainable procurement approach can significantly improve energy efficiency by procuring products and services from suppliers using energy-efficient technologies that reduce energy consumption during production and use (such as renewable energy sources, clean energy practices, LED lighting). 

By considering the entire product lifecycle, organisations may source products made with recycled or renewable materials and designed for longevity, which minimises energy-intensive manufacturing processes. Local suppliers or efficient transportation methods will decrease carbon emissions associated with long-distance shipping.

Reduces Waste

Another key environmental benefit from the selection of environmentally friendly sources of supply is the reduction of waste. Sustainable procurement encourages recycling, reuse and repair, which diverts waste from landfills and conserves natural resources. Sustainable products should also use fewer natural resources, contain fewer hazardous materials, have a longer and more efficient lifespan, consume less energy or water during production or use, and generate less waste at the end of their lifespan. 


Competitive advantages of Sustainable Procurement

It is not just ethical and environmental benefits at the forefront of the case for sustainable procurement. There are many economic and commercial benefits for organisations who implement a highly cross-functional and collaborative procurement approach focused on sustainability.

Sustainability can serve to enhance the corporate reputation and brand image, which in turn helps to sustain brand loyalty and retain existing customers and attract new ones to stimulate revenue growth. The common goal of enhancing sustainability practices can also strengthen external downstream relationships with customers and upstream relationships with suppliers and the extended supply chain. The latter of which can reinforce practices targeting sustainability improvements.

Improves Brand Image and Corporate Reputation

It is quite obvious that a sustainable procurement strategy will have a positive impact on your organisation’s reputation and brand image, which in turn helps to sustain brand loyalty and retain existing customers and attract new ones to stimulate revenue growth. If we consider labour rights – paying a fair national living wage is perceived better than your brand being associated with child or slave labour. This is confirmed by the fact that sustainable procurement practices lead to a 15-30% increase in brand value. While enhancing brand perception, this research also indicates that effective sustainable procurement can raise revenue by 5-20% and reduce procurement costs by 9-16%.

Demonstrating commitment to environmental and social responsibility also positively impacts how stakeholders perceive the company, which has a key impact on its valuation on stock markets.

Research by the World Economic Forum indicates that effective sustainable procurement can raise revenue by 5-20% and reduce procurement costs by 9-16%, all while enhancing brand perception and mitigating risks. In summary, sustainable procurement aligns business goals with responsible practices, benefiting both the organisation and its reputation.

Revenue Growth

Focusing on social, ethical and environmental impact, sustainable procurement can promote innovation and growth strategies to find sustainable products and services to target income from other sources. Recycling programs, offering eco-friendly products or services and by-products from current manufacturing processes, while not requiring a significant investment, can capture market share, increase sales and offer a decent ROI for organisations. This revenue is in addition to the increase of 5-20% from effective sustainable procurement indicated by research by the World Economic Forum. 

Cost Reduction

For cost-related benefits, sustainable procurement may reduce the overall cost (purchase price and total cost of ownership) by reducing over-specification, lowering consumption and energy costs, enhancing operational efficiency, streamlining processes and reducing environmental and social compliance costs. Cost savings may also allow reinvestment into the organisation.

Research by the World Economic Forum reports that sustainable procurement can reduce procurement costs by 9-16%, while research by McKinsey suggests that strong ESG credentials can drive down costs by 5-10%. While sustainable practices may require initial investments, they pay off in the long run with reduced energy costs, lower consumption, and decreased social and environmental compliance costs contributing to the overall cost reduction.

For more information, read our article ‘Sustainability and Cost Reduction: Are They Mutually Exclusive?.’

Strengthening Consumer and Supplier Relationships

The common goal of enhancing sustainability practices can also strengthen external downstream relationships with customers and upstream relationships with suppliers and the extended supply chain. The latter of which can reinforce practices and innovation targeting sustainability improvements throughout the end-to-end supply chain. These collaborative efforts can also lead to improved supply chain transparency, cost savings and enhanced supply chain resilience.

Risk Mitigation and Future-Proofing

When we look at the risk-related benefits developing sustainable procurement practices allows the organisation to future proof themselves mitigating risk and building resilience. Suppliers within the extended supply chain may be causing pollution, employing child or slave labour or not complying with environmental regulations, which will adversely impact the organisation’s brand and may cause supply chain disruptions. Sustainable procurement ensures the use of suppliers who understand corporate social responsibility and comply with environmental regulations.

Organisations must proactively pursue supplier sustainability with increasing pressure from customers, international bodies, governments, and investors to act. For example in the Oil & Gas industry, one that receives a lot of attention in this area, a landmark ruling held Shell accountable for its supply chain’s sustainability performance. Chevron shareholders voted to cut scope 3 emissions, signalling frustration with the company’s approach to climate change. ExxonMobil faced an activist investor coup over its strategic direction regarding sustainability. Although not confined to organisations in this sector, adapting to the climate crisis and stakeholder demands is crucial for long-term business success.

Social, economic, and environmental factors shape the way supply chains work. By making these factors a priority while creating your procurement strategy you can protect your company against scarcity in supply and other changes.


How to Implement Sustainable Procurement

There are a number of key steps involved in the implementation of a best practice sustainable procurement approach.

Define your sustainability targets and policies

Effective and sustainable procurement requires an understanding of and commitment to sustainability across your entire organisation – not just your Procurement team. These targets may be shaped around local standards, legislative targets and requirements, what challenges your organisation faces, or the issues that your customers most align with, but ensure that they are aligned with overall business and procurement objectives.

Develop a robust approach for supplier selection

A well-defined and consistent approach will avoid wasted time and effort on inappropriate suppliers and ensure the supplier will deliver the business requirements. The approach will ensure your procurement activities include relevant assessment and selection criteria aligned to your organisation’s corporate strategy and legal, risk and sustainability compliance requirements.

Agree sustainability KPIs with selected suppliers

Sustainable procurement can only be achieved when your suppliers agree and commit to Key Performance Indicators (KPIs), keeping them accountable for their sustainability performance and assisting to identify areas of improvement.

Report and Utilise KPIs and Assessment Results

Supplier performance reports need to encompass sustainability metrics and indicate non-compliance within the periodic review processes.

Collate and centralise all compliance documentation

For certain organisations, compliance with sustainable procurement practices is non-negotiable and evidence will be required to prove that the business has considered, evaluated and selected suppliers and procurement contract types that contribute to sustainability improvements – especially to pass external audits (e.g. for ISO 14001 certification that relates to environmental systems and ISO 50001 certifications relating to energy management systems). Centralising these documents in a contract repository tool is a key consideration.


Get in Touch with our Sustainability Procurement Consultants

At 4C Associates, we ensure the best sustainability practice is observed and applied across all industries and subject matter. In procurement, this is particularly important as building sustainability into your sourcing activity is crucial in order to meet the 2050 net zero target set by the UK Government.

Our solution to sustainability strategy is based on a two-phase ‘ABC’ diagnostic and ‘4C’ implementation methodologies. If you would like to learn more about our sustainability service and how we have helped companies achieve their sustainability goals, please feel free to get in touch. We’re always happy to share thoughts and learn from you as well.      

Contact myself, Andy Carter, Head of Sustainability Practice, at or Paul Ireland, Manager, at