How You Can Join The 'Sustainable Trend' In Procurement

March 22, 2024

‘2023 is the year of translating commitments into swift and concrete action.’ Plan A

Although sustainability goals aren’t being met, for most companies, they are continuing to climb to the top of the agenda.

Plan A’s recent whitepaper, exploring 2023’s sustainability trends, provides a pivotal view of how companies, nations and individuals are actually making the changes needed to meet sustainable goals.

It raises some eye-opening numbers. For example, to keep existing targets within reach, GHG emissions need to be reduced by 45%. According to OECD, €6.35tn is needed each year to meet the Paris Agreement targets by 2030. Additionally, we have already failed to meet COP26’s global target of keeping rising temperatures below 1.5°C, along with numerous other promises.

“The way we define the success of our economy today is flawed, as it ignores the financial, economic, and societal risks associated with climate change. The task of the decade is to create transparency around these risks and align on how to mitigate them.” Lubomila Jordanova, CEO and Co-Founder, Plan A

Broken down into six key trends, Plan A outlines what companies can expect to get ahead, while maximising both the impact and commercial success of sustainability initiatives.

1. The race to net-zero

‘With only 20% of companies disclosing their full value-chain emissions and with emissions reduction targets in place, there is still much room for leadership and improvement… There’s still time to become an early adopter.’ Plan A

Where a change in business operations can influence the type of organisation one is creating, early movers reap the rewards. Critically, this includes the type of talent that the company attracts and retains (the report suggests as much as 40% retention). With content and enthusiastic employees sharing the same goal towards sustainability, this can also result in better financial performance, cost savings and increased shareholder and stakeholder interest.

2. A new economic framework: ESG as a primary market-driver

ESG is set to continue growing, with some companies already reporting a ~60% increase in operating profit, thanks to investing in such assets. Furthermore, governments are finally acting: international regulations concerning ESG compliance are growing, with more than 25 countries imposing mandatory reporting on ‘corporate climate strategy, emissions, targets, and roadmaps.’

3. Sustainable and resilient supply chains

‘Supply chains are responsible for 90% of a company’s environmental impact.’ Plan A

Consistent disruption over the last few years has emphasised the need for tools to combat and manage the impact on supply chains and business operations. Thankfully, thousands of digital solutions exist to help reduce the effects, especially where disruption is expected to continue throughout 2023 and beyond. The future of procurement sustainability will, undoubtedly, see a rise in how data is managed, along with AI, machine learning, RPA and similar automated technologies.

4. Decarbonisation: will you lead or be led?

Focusing on decarbonisation is beneficial for the planet, but also companies’ pockets. For instance, Unilever and IKEA reported as much as €800mn and €130mn in savings, simply by using low-cost renewable energy. Consider how extensive the impact would be, if more companies and individuals adopted such energy sources.

5. Data and technology at the service of sustainability

Fortunately, there is a growing number of tools that help companies empower themselves, gather supply chain info, and more accurately determine the decisions needed to reduce carbon emissions. In fact, recent studies have shown that as much as 45-70% of carbon emissions can be saved when using automated tools throughout supply chains. For these reasons, Plan A strongly advocates using technology as a ‘future-proof accelerant’ to reach sustainability goals, faster.

6. Regulations shaping sustainability reporting

These represent just some of the various European regulations on the rise, intent on making sure companies are adhering to their sustainability initiatives (while tackling greenwashing):

  • The SFDR
  • The SFAP
  • EU Taxonomy Regulation
  • CSRD

Key takeaways

  • Continue to put sustainability at the top of the agenda, and ensure consistent action
  • Use digital tools throughout the supply chain, to gain insights and better transparency
  • Data – use it to make informed decisions. Understand where emission reductions are possible and will be the most impactful

Read the full whitepaper here.

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