Sustainable procurement initiatives and their risk-related costs: a framework and a case study application

Abstract

Purpose The purpose of this paper is to contribute to a better understanding of the economic consequences of aiming for sustainable procurement. The authors develop and apply a framework designed to identify and measure the risk-related cost trade-offs inherent in initiatives designed to improve sustainability in procurement. Design/methodology/approach The research uses a combined conceptual and case-based research method. A model is developed from theory; subsequently, it is applied using an action research approach and its limitations in use are identified. Findings Specifically, the authors develop and exemplify a framework designed to measure the risk-related cost impact of initiatives to improve sustainability in procurement and develop an initial list of difficulties and constraints when in use. Research limitations/implications This research presents one instance of a model that is applied in one single setting. The purpose is not to generalize, but to provide a deeper understanding of the interconnectedness between sustainability initiatives, risk mitigation and their economic effect. The framework and its calculation methods have to be further developed and refined using more case studies. Practical implications The model can provide initial inspiration and a starting point for firms with the ambition to develop business case models to assess initiatives to improve sustainability in procurement. Its main strength is to demonstrate the multiple cause–effect relationships as well as trade-offs involved in accounting for the risk related effect of a sustainable procurement initiative. Originality/value The presented research contributes to the existing literature by conceptually developing a framework with the potential of outlining the risk-related cost implications of investments initiatives designed to improve sustainability in procurement.