What’s the biggest change in terms of the focus and priorities for procurement teams and leaders over the last decade or so? There are a few potential answers to that question, but my feeling is that the whole area of corporate social responsibility (CSR) and sustainability is a strong candidate for that award.
It’s just over a decade since I last held a full-time chief procurement officer (CPO) role, but I don’t remember issues such as modern slavery, carbon reduction, global warming, plastics, or human rights taking too much of my thinking as a CPO through the nineties and noughties.
But now, they are right up there on the agenda for most organizations, in terms of both procurement priorities and overall business focus. It’s been driven by consumer demand and a more aware population, with younger people taking the lead on issues such as climate change, as we’ve seen in the UK with major protests and the visit of climate activist Greta Thunberg in recent weeks. Firms have become aware of the risks if they mess up on these issues, and that has spread through to shareholder action and sensitivity – a sign that firms really do need to get to grips with this agenda.
We’ve even seen some CPOs morphing into “chief sustainability officers” in their organizations or combining the two roles. That’s not surprising when you think about it. The fact is, for most organizations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business.
Certainly, an organization can look at its own energy and water use or how plastics fit into its packaging strategy and make sure it is behaving properly with regard to the human rights of its own staff. But if we consider the wider issues once we look at our suppliers, the scope is far greater. For larger organizations in particular, the impact they can have on hundreds or thousands of suppliers, all around the world, almost certainly outweighs anything they could do purely internally.
And this isn’t just about “saving the world,” although there is nothing wrong with believing that we should all do our bit to make the world a better place. There are selfish reasons, too, for procurement organizations and leaders to position themselves in the foreground for their organizations’ sustainability efforts. From a functional standpoint, the vast majority of us look for purpose in our work, but as we said earlier, younger people are particularly concerned about these issues. So, if you want to attract the best and brightest to your team, it makes sense to show that you are concerned about sustainability and similar issues and that procurement in your organization is deeply involved in worthwhile initiatives.
It is also clear that because sustainability is high on the corporate agenda, procurement can gain in terms of internal profile and reputation if we are seen to be taking a lead and driving the agenda through our supply chain. I’ve heard a number of procurement executives talking about how topics such as carbon reduction or supporting social enterprises have gotten them onto the board agenda in a manner that day-to-day procurement frankly just didn’t.
It’s your turn to contribute to the debate
We can see another sign of how these issues have risen up the agenda with the announcement of our upcoming Sustainability Summit on Tuesday, June 4, just before the opening of the SAP Ariba Live event in Barcelona. There will no doubt be a certain amount of discussion around how SAP Ariba solutions can help in this area, but the morning event is primarily designed to be a very interactive session with expert panel discussions and small group sessions as well. And for our participants, this means a great opportunity to pick up ideas from each other as well as from the experts involved.
SAP Ariba Live is the largest procurement event in Europe, and we suspect that the number of seats available for the summit will be limited. So if you are interested, don’t delay and register now. Please contact Miriam Kuritzkes to express interest and for further details.