Insights from Procurement Specialists: Key Takeaways from a Round Table Discussion on ESG

The world faces environmental and social challenges threatening the planet’s sustainability.

As a result, companies are looking for ways to incorporate sustainability into their business models. On May 15th, 2023, Per Angusta|SpendHQ and Market Dojo invited procurement professionals to an intimate dinner in London to discuss the impact of Environmental, Social, and Governance (ESG) on the supply chain.

ESG: The Key to Building a Stellar Corporate Reputation

Reputation is critical in business. The discussion focused on how a company’s sustainability practices can impact its reputation. AECOM, a multinational engineering firm, was cited as an example of a company that had made a public commitment to reducing its carbon footprint. As a result, AECOM saw its stock price double, and it could access discounted lending from banks. However, not all companies are the same, and each needs to find its path to sustainability.

Aligning Corporate Ownership and Vision with ESG: A New Era of Responsible Business

The discussion then shifted to corporate ownership and vision. A top-down approach to ESG is vital, and corporate ownership is critical to driving sustainability initiatives. Companies must make ESG a corporate mandate, with procurement as the enabler. They emphasised that ESG is a journey that requires long-term investment and trial and error. The discussion centred on the need for companies to have a holistic view of ESG and create an ecosystem that is best for their business.

ESG Implementation: No Silver Bullet

Finally, there is no silver bullet for ESG. Quantifying social values is challenging, and there is no uniform approach. Technology, like Ecovadis, can help, but it primarily focuses on the “E.” SMEs often ignore the ESG assessments due to prohibitive costs or resource limitations. ESG is very difficult to report on, and the challenge lies in having a holistic view and focusing on smaller scopes where there is something measurable and reliable.

Procurement Power: Harnessing ESG Best Practices for Sustainable Impact

The key discussion points from the evening offer valuable insights for procurement professionals looking to incorporate ESG into their supply chain practices.

Here are some takeaways:

• Reputation is critical: A company’s sustainability practices can impact its reputation. Procurement professionals should consider how ESG initiatives can help enhance their company’s reputation.
• Corporate ownership and vision: ESG needs to be a top-level initiative. Procurement professionals should work with senior management to make ESG a corporate mandate and create the best ecosystem for their business.
• No silver bullet: Procurement professionals should recognize that there is no one-size-fits-all solution for ESG. They should focus on smaller scopes where there is something measurable and reliable and work with SMEs to ensure they are not ignored from or ignore ESG assessments due to prohibitive costs or resource limitations.

In conclusion, the round table discussion on ESG highlighted the challenges and opportunities that procurement professionals face when incorporating sustainability into their supply chain practices. Procurement professionals should consider the key discussion points from the evening to create a sustainable supply chain that enhances their company’s reputation and positively impacts the environment and society.

Find out how you can reimagine your strategy, including ESG, with The New Rules of Procurement Engagement