How Technology is putting Sustainability at the forefront of Procurement
Our Marketing Exec attended a number of webinars celebrating Sustainable Procurement Day last month.
The first-ever World Sustainable Procurement Day, hosted by Sustainable Procurement Pledge (SPP), took place during the Spring equinox on 21st March 2022. The day aimed to empower and equip Procurement Practitioners with knowledge, best practice approaches, and practical solutions to sustainability challenges.
Technology has a huge place in our developing world. We’re increasingly seeing technology adopted for sustainable development projects, such as tracking and reducing carbon emissions, and the procurement function itself drives much of this adoption. This World Sustainable Procurement Day session titled ‘How is Technology helping procurement to embed sustainability?’ focused on how companies are utilising technology in practice and what can be done to help procurement professionals embed sustainability and make it easier to do.
The panel was led by Lance Younger and Oliver Hurrey. The members of the panel itself were:
- Jennifer Bennett – Technical Director in the office of CTO, Google
- Mark Roberts – Director of Commercial Services, Metropolitan Police
- Tom Newbigging – a member of the sustainable procurement team, GSK
Choosing the right technologies
The topics of data, data sharing and privacy are at the forefront of technology right now. The ecosystem of worldwide data is growing rapidly, and Jennifer’s main concern here is that organisations make sure they can manage data effectively and find useful insights. Often people are still extracting data in a very manual way, but this will not be possible in the future. Implementing new technologies requires looking at other, more efficient ways these processes can be carried out. Yet, operations should be focused on the organisational goals first, which the correct technology can then be coupled with.
Tom introduced GSK’s net-zero by 2030 policy, where the issue faced by the organisation is the insights taken from their pool of data. Their 5-step plan implements supplier opportunities and uses data to set specific targets and KPIs. The focus on improvement and constant innovation is key for GSK, which the organisation sees as predominantly concerned with procurement. However, they recognise that the sustainability and finance teams are key to gaining cost of ownership whilst integrating sustainability data.
The Energise Project
The Energise Project was a key takeaway from this session. GSK and 9 other pharmaceutical companies comprise the Pharmaceutical Environment Group (PEG) which founded this project. The aim is to reduce carbon emissions in pharmaceutical supply chains. The first part of the programme introduces suppliers to renewable energy and how they can start to transition. This is completely free and delivered via a series of workshops over 10 weeks. The other half of the programme is optional and requires an upfront payment, though appears to be extremely worthwhile to suppliers who would value expert help throughout this complicated process. Expert energy consultants from Schneider Electric will assemble a ‘buying cohort’ for suppliers in this segment of the programme. Overall, the project offers sustainability credentials for suppliers with further commercial benefits.
Procurement or Sustainability first?
The overall attitude from the panel showed an ability for the sustainability and procurement functions to work collaboratively. Metropolitan Police considers social value to be an area where they can make an immediate impact. With the largest fleet of vehicles in London, they are looking to electric vehicles (EVs). They are also starting to look at net-zero targets through the lens of procurement.
GSK are starting to look at how sustainability can be embedded into current processes through using technology and data. This first requires arming the procurement function with the necessary knowledge. Once these teams understand sustainability in relation to procurement, they are more likely to view it as a value creation activity rather than a ‘nice-to-have’.
The Need to Innovate
The traditional top-down approach within the value chain is requiring some new mechanisms. New requirements are likely to be set, especially surrounding data sharing and sensitive data. A lot of the innovation will come from new generations, already finding traditional procurement tools to be archaic.
This innovation not only looks like new tools and technologies but also staff development. Mark discussed how Metropolitan Police are in an ideal position where employees have a natural inclination to learn and adapt. In Jennifer’s words, ‘we shouldn’t all have to be data scientists to be able to leverage machine learning or AI.’
This great talk from SPP left us with much to think about. Technology and sustainability are together transforming the procurement function. Organisations working to practice social value should consider sustainability in all its forms when adopting new technologies. These functions working collaboratively will ensure the creation of new value. There were 20 sessions in total on Sustainable Procurement Day and you can catch up on the recordings here.