Why It Matters
Scope 3 emissions, or indirect GHG emissions, occur in a company’s value chain from both upstream supplier as well as downstream customers.
Sustainable procurement focuses on lowering upstream scope 3 emissions in the supply chain.
Sourcing environmentally-friendly products and services reduces a business’ environmental impact and supports ethically sourced materials, playing a crucial role in meeting sustainability goals.
What Is Sustainable Procurement?
Sustainable procurement refers a purchasing process that considers the social, environmental, and economic impacts of acquiring goods and services.
Because businesses hold various guiding values, sustainable procurement will look different for everyone. Considering both businesses beginning their procurement journey as well as businesses seeking to improve sustainability within the supply chain, this page includes a guide to establishing your business’ goals and values, a list of certifications that ensure suppliers meet various environmental and social standards, and methods for maintaining existing supplier relationships while decreasing environmental impact.
Establishing Goals and Values
To ensure alignment with suppliers, begin by evaluating what is most important to your business and brand identity. Then, create a set of requirements that vendors must meet in order to work with you.
While you may strive for the highest level of sustainability possible, consider balancing short-term feasibility with long-term goals. One strategy for this is a tiered approach in which a smaller number of these practices are integrated at a time, working up to your larger, overarching sustainability goals.
Goals and Values Guide
Every business’ goals and values will look different, but this page aims to help guide your process of determining what is most important to your brand identity. Here, you can find common environmental and social topics and questions to ask when considering working with suppliers.
Environmental Impact
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Minimal packaging and packaging made from recyclable materials reduces waste and increases diversion.
When products and their packaging are reusable, recyclable, repairable, or refurbishable, they generate a lower environmental impact.
Questions to ask:
Has the supplier set zero-waste goals?
What kind of packing do they use?
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Energy-efficient lighting, such as LEDs, reduces energy consumption.
Investing in renewable energy reduces carbon footprints.
Questions to consider:
How much energy is used to make the product, and what does the supplier do to reduce their energy use?
Have they set decarbonization goals?
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In order to track your business’ scope 3 emissions, it is important to know your suppliers emissions.
Questions to consider:
From where are materials sourced?
Does the supplier track its emissions?
Does the supplier have emission reduction goals or a commitment to carbon neutrality?
Social Impact
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Sourcing materials from conflict-free areas avoids exploitation.
Certifications can help ensure that products are made using environmentally and socially responsible processes.
When considering working with a supplier, note their values and/or mission statement and ensure it aligns with your business’ goals.
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Companies that invest in their community support local economies, build more resilient futures, preserve culture, and improve qualities of life.
Community investment can occur by partnering with local nonprofits, donating to charities, and practicing stakeholder engagement.
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Suppliers that provide livable wages and follow labor laws help support better and safer working conditions for all employees.
Review a supplier’s management system, looking at hiring practices, consequence protocols, etc., to avoid child and forced labor, unequitable business practices, and discrimination.
Certifications
Once a business has established its guiding values, the procurement process can begin. Certifications are a great indicator of how well a supplier suits a business’ mission.
Different certifications require a variety of environmental and social criteria such as safe working conditions, ecological health, environmentally responsible supply chain management, and much more. Identifying certifications that ensure suppliers with your business’ values will help guide your procurement decisions and make the process easier.
The certifications listed below are some best known and recognized for their sustainability and/or social standards within the environmental field.
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Green Seal
Green Seal’s certification standards are based on protecting people and the planet through key impacts that occur throughout a product’s life cycle. These impacts are categorized into four sections: protecting human health, preserving the climate, ensuring clean water, and minimizing waste.
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B Corp
B Lab’s “B Corp” certification standards are extremely holistic, evaluating ESG (environmental, social, governance) factors such as fair work, human rights, environmental impact, stewardship, circularity, and more. The certification process is rigorous, and a B Corp must not only meet high social and environmental standards, but also uphold them to remain certified.
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Fair Trade
Fair Trade certified products must meet rigorous ESG standards including, but not limited to, safe working conditions, environmental protection, sustainable livelihoods, and community development funds. Fair Trade’s motivation is rooted in protecting the planet and improving the lives of those who interact with a product at any point during its lifecycle.
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Cradle to Cradle
Cradle to Cradle (C2C) certified products must meet standards across five categories: material health, social fairness, product circularity, water and soil stewardship, and clean air and climate protection. With this certification, C2C aims to support the transition to a circular economy and climate nerutality by 2050.
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SA8000
The SA8000 certification by Social Accountability International (SAI) ensures ethical working conditions. Standards for the certification include elements regarding discrimination, child and forced labor, working hours, health and safety, remuneration, management systems, etc.
Existing Supplier Relationships
When beginning the sustainable procurement process, there should be a strong vetting process to verify that a supplier is the right fit for your business. Use company values, supplier requirements, and certifications to guide the decision process.
If you wish to maintain current supplier partnerships, however, it is still possible to increase the sustainability of your supply chain.
This section addresses how to navigate existing supplier relationships while still striving to decrease scope 3 emissions and environmental impact.
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Communicate your sustainability and social priorities and desire to continue the partnership. Share your business’ sustainability mission statement and ethical values. Then, discuss a plan to move forward.
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You can work together with the supplier to help them improve sustainability practices within their operations such as packaging, sourcing, and more sustainable materials alternatives.
Suggest ways to support the local community. Your business can collaborate with the supplier to match donations to nonprofits and/or charities, seek out carbon credits to offset their emissions, and practice stakeholder engagement.
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Establish benchmarking methods and a plan to move forward.
Tracking the progress towards sustainability and social goals is important in continuing alignment throughout the partnership. Key performance indicators (KPI’s) written in contracts set clear expectations for both parties and assist in identifying opportunities for improvement.
KPIs for tracking progress towards zero-waste, for example, could include waste diversion rates. If the diversion rate increases over time, the supplier is reducing their waste and making progress towards that goal.
Additionally, as new sustainability technologies and innovations are introduced, explore how they can be integrated into the supply chain