Consumers, employees, and investors are increasingly demanding that businesses take positive and demonstrable steps to reduce their negative environmental impact.
But the pressure to respond can be overwhelming, and the most difficult obstacle for many organizations is that they often do not know where or how to start. However, one metric in particular has emerged as a logical starting point, due to it being one of the most quantifiable ways to measure sustainability, and that is carbon footprint reduction.
Carbon footprint reduction might initially seem daunting – especially after the relatively ‘low hanging fruit’ options of reducing office consumables and LED lighting have been implemented. But taking more comprehensive action is not as complex as it might initially appear, and there are three key areas procurement activity can help organizations make a tangible impact to ultimately benefit the whole business.
Three areas to make a difference
It is important to first establish the primary needs of your business, and then manage demand accordingly. From business leaders to procurement consultancy professionals, we can all agree to purchase requests because they’re within a budget or with an approved supplier. Sustainability action starts by challenging internal customers as to whether they need that item or service at all and, if they do, whether they have considered more sustainable alternatives. Sometimes just asking the question can make people think twice about what they really need.
This isn’t just limited to the item or service itself but could also encompass the wider environmental cost of buying the item or service. For instance, where items are essential to the business, changing and managing demand can involve reducing the number of deliveries required, perhaps opting to take a bigger delivery once a week rather than multiple smaller ones.
Altering specifications is another lever to use to have an immediate impact, and there is ample opportunity to do so. In a manufacturing business, it may be possible to take a scientific look into making elements lighter or longer lasting, substitute a plastic product for something less environmentally damaging such as a biodegradable material – or even eliminate a particular component altogether. Packaging is becoming a target area, most noticeable for supermarkets, where consumers are demanding more eco-conscious practices and materials. These ideas can be leveraged and applied across industries; some of which could result in cost reduction too.
Then there’s the circular economy mindset. Put simply, this revolves around the idea of designing products to be re-used or recycled at the end of the product’s life or building entire systems where one facility’s outputs will benefit another’s inputs. There are many simple ways this can be implemented; in the Nordics, we see examples of industrial symbiosis leveraging this concept. One facility reuses the heat generated by a chemical plant to heat water, enabling the neighboring facility to farm fish at optimal temperatures. The ‘output’ is then used as fertilizer for growing crops in local greenhouses that produce CO2, which can then be directly fed back into the chemical plant.
Employing this mindset helps reduce waste overall, as much of it is instead considered as biproducts with additional purposes. Cars are already being designed in a more modular manner to ensure easier reuse of parts at end of life, which may well be totally functional but would ordinarily be scrapped along with the rest of the vehicle.
Collaborate for your pocket and the planet
In many cases, what organizations truly require to reduce their carbon footprint is a fresh – and collaborative – approach, working with suppliers and even competitors to help the wider cause. In the banking sector, we’ve seen rival organizations come together to create a central service to collect and distribute important paperwork from high street branches, removing the need for each bank to run their own journeys – creating both environmental and cost savings for all parties. Procurement’s role here is to drive the agenda and present potential solutions, which can then be discussed with the wider business.
The biggest challenge is often trying to view things differently. Many in procurement will not have tackled such issues before and there’s no manual to help with the kind of fresh thinking that will be required to innovate.
However, the opportunity for procurement is significant. CEOs are keen to move businesses in this direction, and those in operations will welcome suggestions around specific measures that can be implemented relatively easily. Procurement stands at the heart of how a modern business can go about tackling what is arguably the single biggest issue of our time, so start making a mark now.