CPO’s Talk Sustainable Procurement Value and Common Myths

Would you like to know what Canadian CPO’s think about the value of sustainable procurement? Interested in the truth about costly myths for moving forward with impactful programs? Read on to find out!

The Annual CCSP CPO Panel Peer Exchange was held on June 10th to an audience of over 80 individuals from organizations across Canada. Each year the CCSP is privileged to have Canadian leadership join us for an hour-long webinar to get an annual outlook on the status of Canadian sustainable procurement in the public sector and how CPOs are framing the value of sustainable procurement.

Our expert panelists this year were Karen Jensen, Director of Corporate Procurement at BCLC, Alexander Ralph, Chief Procurement Officer and Director of Supply Chain Management at the City of Vancouver, and Stefane Belleau, Executive and Head of Supply Chain, Strategic Sourcing and Procurement at CBC Radio Canada. And just in case you missed it, we’ve summarized the entire discussion into a quick 3-minute read!

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How does your CFO value sustainable procurement?

For organizations that have been developing their sustainable procurement programs for some time, purchasing sustainably is about seizing opportunities as much as addressing potential risks in their supply chains. Our CPO Panelists all agreed that the value behind sustainable procurement doesn’t just come from the money saved, but the value added through long-term return on investment. Alex Ralph pointed out that while purchasing sustainably is the morally correct thing to do, research* has shown that every dollar invested into sustainable procurements is stretched and multiplied. Other reasons CFOs are backing sustainable procurement include:

      1. The opportunity to work internally with other departments with similar goals.
      2. Visualize broader areas of impact through a positive ripple effect.
      3. Avoid risks in the supply chain.
      4. Align spending with corporate mandate.

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“As we are trying more and more to understand priorities and see how we can resonate with our communities, we want to have those success stories of how procurement can resonate in our communities as well.”Karen Jensen

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Sustainable Procurement Myth-busters

Myth: Sustainable procurement is more costly.

In fact, panelists agreed that through total cost of ownership (including maintenance costs, end of life disposal etc.), it is possible to save money through sustainable procurement. By using TCO, the pricing evaluation is changed, and you are able to see the total cost of a product or service throughout its lifecycle. The evolution of technology has also made green products more affordable and more widely used, so products that were once prohibitively expensive are becoming more reasonable through TCO and initial cost.

Similarly, Stefane Belleau has found that many existing suppliers meet the sustainability criteria without added RFP specifications. When it was once difficult to obtain sustainable options from suppliers, now it is becoming ready-baked into services without an added cost.

Myth: Sustainable procurement increases the length of the procurement process.

In fact, including sustainable procurement specifications into the process is simply adding a few new questions into the research that is already being done at BCLC. For Karen Jensen looking at sustainable requirements doesn’t add any new steps, just new questions. The process of conducting market research, engaging suppliers, and encouraging suppliers to innovate takes the same amount of time with sustainable specifications added in.

 

Our panelists agreed on a key message; sustainable procurement is worth the effort. The ripple effect caused by strong sustainable procurement programs can create valuable ROI and meaningful outcomes for communities. And it doesn’t need to be difficult! Sustainable procurement is quickly becoming standard for procurement processes and can be less costly in the long run. There’s no excuses now; go forth and integrate sustainability into your everyday procurements.

 

*Research to support procurement has strong ROI

https://www.mhlnews.com/global-supply-chain/article/22044397/sustainable-procurement-can-lead-to-cost-savings

https://resources.ecovadis.com/whitepapers/roi-sustainability-responsible-business-practices