Unlocking Value Through Sustainable Procurement

Abstract

In the modern marketplace, organizations do not embed sustainability in their strategies as a matter of choice, but as a matter of competitive necessity. In this broad corporate movement toward pro-sustainability policies and practices, one business function plays an especially vital, yet under-appreciated role: the end-to-end supply chain. Clearly, the success of any corporate sustainability initiative requires close collaboration and synchronization with companies across the supply chain. However, companies rarely engage multiple tiers of suppliers in pro-sustainability policy formation or execution primarily because coordinating the processes and practices of a global network of independent companies and subsidiaries is challenging. Yet, one department may be particularly well suited to bring about such coordination: procurement. The reason why procurement executives might be in a favorable position to carry out this work is their cross-cutting functional span, which reaches across numerous areas within an organization. This research provides evidence that certain capabilities are needed to drive sustainability programs through the organization. Seven capability pillars are introduced to help sustainability programs successfully mature into world class programs.