This guide highlights the importance of strategic sustainable procurement to the long-term success of organisations and presents a compelling case with the delivery of consistent financial and environmental benefits.  

Sustainable sourcing efficiency improvements helped Unilever realise over €1.2 billion in operational cost savings between 2008 and 2020. In 2017 PepsiCo reported a $60 million reduction in operating costs from sustainable procurement programs and practices focused on product ingredients. In 2021, Nike achieved an improvement in profit margin across its operations of $50 million by improving its supply chain sustainability practices with initiatives such as replacing certain shoe components with more sustainable materials.

Beyond cost reductions and savings from reduced energy use, lower materials consumption, and more efficient transportation, sustainable procurement unlocks other value improvement opportunities. Authentically sustainable products improve brand reputation, provide opportunities for premium pricing, and reduce legal, compliance, and reputational risks. This is evidenced by the World Economic Forum‘s research demonstrating that the effective implementation of sustainable procurement can lead to a 9-16% reduction in procurement costs while at the same as a 5-20% increase in revenues, improved brand perception, and enhanced business and supply risk management – future-proofing the organisation.


What is Sustainable Procurement?

Sustainable procurement integrates ethical, environmental and economic values into an organisation’s procurement policies, processes and procedures. Consideration of these three core pillars of sustainability is critical when sourcing third-party products and services from suppliers and the wider supply chain to ensure protection of the environment and society as a whole.

A focus on sustainable procurement guarantees that an organisation’s core sustainable values are considered throughout the procurement lifecycle and long-term supply strategies are future-proofed. Potential issues to consider include scarcity in supply brought about by extreme and unexpected world events, the ability to cope with the demand of emerging markets, pressures brought upon by cost/inflation and the ability to reduce cost through reductions in energy consumption and waste.

Sustainable procurement also requires organisations to develop robust approaches to risk management to identify potential problems in their supply chains. While ensuring compliance with legal and regulatory requirements, this encompasses many issues beyond, for example, slavery or child labour practices, the use of harmful chemicals or materials that can affect people or the environment, and suppliers not adopting net zero practices.

It is without doubt that not adopting sustainable procurement practices could have negative consequences on your business. Before you start any procurement, therefore, you should think carefully about whether the products or services you intend to buy, and the way you are going to buy them, will impact the sustainability objectives of your organisation.


Why is Sustainable Procurement Important?

The importance of sustainable procurement cannot be understated and is increasingly at the forefront of corporate agendas. It supports the sustainability goals of the organisation and optimises the environmental, social, and economic impacts over the lifecycle of the product or service.

The threat of climate change and its adverse effects—such as loss of biodiversity, an increase in natural disasters, and food and water shortages—requires urgent and immediate action. Organisations are focusing on carbon reduction targets and working to reduce greenhouse gas emissions, eliminate waste from their supply chains, and adopt more sustainable business practices. As part of their sustainability agenda, stakeholders now focus on putting into action ESG and corporate social responsibility (CSR) initiatives, which drives the need for sustainable procurement.

Sustainability issues in the supply chain, such as slavery, forced labour, human trafficking, waste, emissions, affects every industry. Whether that’s electronics, construction, steel, agriculture, textiles and many more. For example, whilst modern slavery is illegal in every country in the world, it still widely occurs and may have significant reputational damage on your business.


The 7 Principles of Sustainable Procurement

Sustainable procurement integrates processes, systems and information focused on optimising the impact of operations on the environment, while enhancing the bottom-line benefits for the organisation and its stakeholders. A comprehensive sustainable procurement strategic approach focuses on:

  1. A long-term, strategic procurement viewpoint – Sustainable procurement needs to think long-term about business value, resource availability, risk, resilience and sustainability.
  2. Comprehensive, and well-defined business requirements – Sustainable procurement should consider typical procurement requirements like quality, cost, quality, delivery, innovation alongside sustainability-related factors like regulation, human rights and environmental factors.
  3. Systematic, transparent supplier evaluation, onboarding and management – Develop and embed clear policies, processes, procedures, and systems for monitoring and approving purchasing requests, managing suppliers, tendering, negotiations, invoicing and payment, data and record-keeping and inventory management to support sustainable procurement.
  4. Optimised spend – Sustainable procurement should aim to be a source of cost savings and positive ROI by reducing input costs, usage and/or total cost of ownership.
  5. Optimised inventory and logistics – This isn’t just better for business performance, it’s often more sustainable with lower transportation mileage, raw material consumption, energy use, and waste; all hallmarks of sustainable procurement and operations.
  6. Supplier collaboration and engagement – Building strong and collaborative relationships with suppliers is essential to your organisation’s success, particularly when you need to work with those suppliers on sustainable procurement performance, transparency, traceability and innovation.
  7. Quality and reliable data – From assessing supplier and supply chain risks to understanding environmental social impacts of specific products, the collection, analysis and management of accurate data is a critical component for enhanced supply chain sustainability and robust procurement decision-making.


The Benefits of Sustainable Procurement

Following on from the discussion on why is sustainable procurement important, it may be useful to reiterate the key benefits of adopting sustainable procurement processes: 

Lowers Cost

Sustainable procurement may reduce the overall cost (purchase price and total cost of ownership) by reducing over-specification, lowering consumption and energy costs, and reducing environmental and social compliance costs. Cost savings may also allow reinvestment into the organisation.

Reduces Risk

Developing sustainable procurement practices allows the organisation to future proof themselves against risk and build resilience to major adverse economic and environmental events. Suppliers with the supply chain may be causing pollution, employing child or slave labour or not complying with environmental regulations, which will adversely impact the business’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.

Increases Revenue 

Consumers that buy into sustainability can improve organisation’s financials and revenue growth and increase brand equity and loyalty. Focusing on social, ethical and environmental impact, sustainable procurement can promote innovation to find sustainable products and services and target income from other sources e.g. recycling programs. 

For more information, please read our article on the advantages and benefits of sustainable procurement.


What are the Barriers to Sustainable Procurement?

The research within the latest 4C Transformative Procurement Survey highlighted that 46% of procurement functions had no or very limited investment in sustainability initiatives, but this may be attributable to common barriers to sustainable procurement. You can download the full report here.

1. Getting Buy-in From Senior Stakeholders

Sustainable procurement requires people to embrace change, which isn’t always easy to achieve. With an attitude of “if it’s not broken, why fix it?” or “what is in it for us” mindset it is difficult to obtain buy-in to drive positive change. To engage and bring senior stakeholders on side you will need a solid business case demonstrating the key benefits and how your organisation can make the change. 

2. Insufficient Time and Resources to Drive Ideas Forward

All organisations are resource-constrained and have conflicting demands on these scarce resources. Combined with limited time, this will limit the opportunities to drive sustainable procurement practices in your organisation. However, if this creates new efficiencies it may save time in the long-term.

3. Limited Support from Suppliers and the Supply Chain

Similar to getting buy-in from internal stakeholders, organisations can also face barriers when working with suppliers and changing their mindset. They might have different values or resources, may not be open to a new approach, unwilling to be transparent, or even understand the importance of sustainability and the benefits it can provide their organisation, the environment and society. It is best to implement sustainability practices in your own organisation before looking externally.     

4. Potential Higher Costs

While a commonly quoted benefit is lower costs, many organisations are worried about the cost of changing their processes. Moving towards sustainable procurement can be regarded costly at the outset, meaning it can be difficult to achieve internal buy-in. However, it’s critical to regard sustainable procurement as an investment for the future that can help you cut costs, improve risk management, promote innovation and reduce carbon emissions. 

5. Challenges Accessing the Right Tools and Technology

There are many tools and technologies that can support your organisation in becoming more sustainable, including our own 4Carbon tool. However, having the funds, skills and resources to access and ensure effective use can be challenging. These tools need to easily integrate into current systems and help streamline existing processes that you already have in place. This is why getting internal buy-in is crucial.

You can learn more about identifying and overcoming sustainable procurement barriers in our in-depth article.


Sustainable Procurement Requirements

To make procurement sustainable there are a number of requirements to ensure key elements are in place:


Transparency in the end-to-end procurement process is fundamental to sustainability. All the parties engaged in the process should understand their roles and responsibilities to ensure that practices are considered at the right time by the right people. This also allows any disagreements and issues to be raised and resolved.


To be successful, all parties—organisations and suppliers through the supply chain— must work closely together with aligned business goals and objectives. This is possible only when everyone knows their precise roles and responsibilities and how they can be held accountable when agreed objectives are not met. A robust approach to risk and resilience will assist an understanding of the impact of delays or disruptions and the appropriate corrective action – making the process sustainable. 


Sustainable procurement is also vital to implement consistent standards across the organisation. Those engaged in the procurement process must know and adhere to the standards when sourcing and implementing and managing the contract. To comply with the standards, periodic evaluations must be conducted for the products and services delivered to identify any corrective measures and required improvements.


How to Achieve Sustainable Procurement

Implementing sustainable procurement best practices involves a number of key steps.          

Define your sustainability targets and policies

Effective and sustainable procurement requires an understanding of and commitment to sustainability from across your 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. Formalise these targets by creating sustainability policies across your business, ensuring that they are aligned with overall business and procurement objectives so they can be more easily adopted.     

Develop a robust approach for assessing and selecting suppliers

A well-defined and consistent approach to procurement within your organisation will avoid wasted time and effort on inappropriate suppliers, ensure efficiencies in the tendering process, and ensure the supplier will deliver the business requirements. The approach will ensure your tendering activities (RFx) include relevant assessment and selection criteria aligned to your organisation’s corporate strategy and compliance requirements encompassing legal, risk, sustainability, and information security compliance requirements. 

Agree sustainability KPIs with selected suppliers

Sustainable procurement can only be achieved when your suppliers commit to an agreed baseline performance with Key Performance Indicators keeping them accountable for their sustainability efforts. These KPIs, aligned to your overall objectives, will provide an opportunity to track supplier performance and identify areas of improvement.

Report and Utilise KPIs and Assessment Results

Supplier performance reports are fundamental to prioritising sustainability and creating a framework for continuous improvement with suppliers. It is important to Inform concerned business units and suppliers of non-compliance, integrate the performance metrics in supplier selection and ensure periodic review processes. High risk or poor performance should lead to a more intensive audit.

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 should be considered.


Partner With Us to Enhance Your Sustainability Procurement Efforts     

At 4C Associates, we ensure the best sustainability practice is observed and applied to projects across all industries and subject matter. This is particularly important as building sustainability into your procurements 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 offering 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 at Andy Carter, Head of Sustainability Practice, at or Paul Ireland, Manager, at .