Ahead of attending Procurex in April, Future Planet's co-founder and Head of Research and Innovation Ingrid De Doncker outlines the importance of understanding sustainable procurement in the context of the EU's Corporate Sustainability Reporting Directive.
How to leverage CSRD for positive sustainable impact
Between 50 to 70% of an organisation’s expenditure falls under the purview of procurement. This domain primarily involves interactions with third-party suppliers, whose engagements significantly shape supply chain resilience and sustainable practices. Sustainable procurement transcends rhetoric, it isn't a mere aspiration; it's a strategic imperative poised to drive sustainability transformations, reshaping supply chains for enduring positive outcomes. Within Ireland's public and semi-state sectors, it can play a critical role in advancing our environmental, social, and economic agendas.
Sustainable Public Procurement (SPP) assumes a dual role: not only as a conduit for cost efficiency but also as a pivotal mechanism for mitigating supply chain risks. It aims to optimise for value throughout the lifecycle while mitigating environmental and societal impacts. Operating on a triple bottom line approach, it harmonises economic, social, and environmental facets, aligning seamlessly with the United Nations Sustainable Development Goals (SDGs).
The role of procurement professionals pioneering sustainable practices cannot be underestimated. Central to the current conversations are Scope 3 emissions, representing 80% of the overall GHG emissions, and Human Rights due diligence. Both gauge the environmental and social impact of procured goods and services. We can take the lead by seamlessly integrating sustainability criteria into tendering processes, setting a definitive standard and criteria for suppliers and internal stakeholders. By prioritising environmental and social dimensions alongside cost and quality considerations in contracts, they pave the way for transformative shifts and are instrumental in realising the climate and societal targets.
The Corporate Sustainability Reporting Directive (CSRD) is pivotal in this landscape, aiming to elevate transparency, comparability, and accountability in sustainability initiatives. It's imperative for organisations to embed sustainability procurement strategies, recognising the profound impact these strategies wield on overall business operations. Greenwashing is tackled head on as CSRD mandates exhaustive reporting on climate and environmental metrics, fostering transparency and accountability.
These encompass disclosing information pertaining to the supply and value chains of organisations, spanning from suppliers to end-of-life disposal procedures. By mandating companies to report on a double materiality basis, incorporating financial and impact materiality, the CSRD aims to accelerate comprehensive sustainability endeavours. While the whole organisation and its value chain will be impacted, procurement professionals will be at the cold face of driving this change and complying with the CSRD requirements.
Preparing to be a Responsible organisation must go hand in hand with the preparation for CSRD compliance. This can only be achieved by understanding reporting requisites, engaging with governmental resources, and aligning practices with industry benchmarks. Stakeholder collaboration remains pivotal for streamlining processes and ensuring seamless compliance.
Sustainable procurement goes beyond mere regulatory adherence; it epitomises a legacy of transformative change. By championing sustainability within procurement paradigms, professionals forge tangible impact, contract by contract. Let us seize this opportunity to be catalysts for sustainability, designing a greener, more equitable future for Ireland and beyond.
It is time that we all agree that Procurement can and should serve as the epicentre for innovation. Through proactive pursuit of sustainable solutions, procurement professionals stimulate innovation across supply chains. And you are one of them: whether by embracing circular economy principles, supporting local enterprises, or advocating eco-friendly materials, you exert profound influence on market dynamics, you create awareness across all stages of your supply chains and you evidence change through collaboration with all parties at the sustainability negotiation table.
Public Procurement professionals wield significant influence during tendering. It is clear: By embedding sustainability mandates into specifications, selection and evaluation criteria, and contractual terms, they can catalyse significant change. After all, in Ireland, there is only a €20bn opportunity to get it right or wrong. Climate commitments and human rights due diligence are two integral components that should be seamlessly integrated into procurement practices.
Operating within an extensive network, procurement professionals already collaborate with suppliers, policymakers, and civil society. Through capacity enhancement and knowledge dissemination, they can cultivate an environment where sustainable practices become business as usual, driving systemic transformation.
If you are interested in understanding how you can make a difference, you can hear more about Sustainable Procurement and how to skill up for upcoming sustainable legislation at the upcoming premier public procurement event, Procurex. This event will delve into the latest sector developments, and you will get insights from the country’s top procurement experts and decision-makers, while forging connections with innovators who are actively involved in delivering to Ireland’s climate and societal targets.
Each of us plays a pivotal role in addressing the challenges of climate change. As champions of sustainability, we must advocate the protection of human rights and serve as trusted advisors within our supply chains. If you want to understand how, I invite you to reach out, exchange ideas, forge alliances. I will be there welcoming you to embark on a journey towards a more sustainable and equitable future. I hope to see you there.
