Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Challenges Procurement Professionals Currently Face

Here are some challenges that procurement professionals currently face. Keep these in mind as you continue onto this career path.

1. Professionals have little to no knowledge of sustainability

One of the challenges that procurement professionals face today is their lack of knowledge about sustainability practices in the procurement process. The issue of the lack of knowledge in sustainability arises at all levels of a company.  

To implement sustainability in the procurement process, businesses need a team that can accurately process and assess relevant data throughout the procurement. However, many procurement managers and directors do not know how to collect this relevant data. 

The best thing you can do is to advocate for education and training courses to prepare and teach your team and other relevant employees about the importance and process of sustainable procurement. 

Here in Procurement Tactics, we have developed a course that will enable you to refine your strategy for your procurement. In our Annual Procurement Strategy Course, you will master everything in procurement that will enable you to make the best sustainable strategy for your company. 

2. Low internal resources

Funding, time, and other resources are necessary to ensure the best result from your sustainability efforts. Procurement teams need a lot of time to learn the processes needed to carry out sustainability initiatives and habits in the procurement process. 

Procurement teams must know how to assess the sustainability of their performance together with their supplier’s performance. 

Furthermore, when you are implementing sustainable practices, it takes a lot of time to work toward the desired results. You must know that sustainability cannot be achieved overnight. 

Due to this, many businesses feel that they do not have enough time and resources to wait, especially when they have more immediate methods. However, just like in any other aspect, time is an investment that allows you to grow and adopt new skills and practices to have sustainability in your procurement process. 

3. Little support from suppliers

The procurement department needs to judge and assess the sustainability of their suppliers in addition to their own efforts to ensure an eco-conscious procurement process. 

However, because suppliers are separate from your business, they may have different perspectives or resources available and they might not be able to be open to a new approach. Also, they may not know how to obtain the appropriate data that you need to evaluate your sustainability initiatives. 

Just like your company shareholders, your suppliers may not understand or know the significance of sustainability. Thus, telling them may change their mind due to the benefits they may benefit through sustainability. 

You also have the choice to source from suppliers who already implemented sustainability in their processes. However, this can be costly, especially for small to midsize businesses. 

4. Lack of government support

Businesses that reside in a country where sustainability is supported by the government make it easier to implement sustainability initiatives than those in countries that do not value sustainability. 

Lack of governmental support provides fewer incentives for businesses and procurement departments to switch to sustainable methods. Thus, the main reason why many companies in some other countries do not implement sustainability in their processes. 

5. High costs

In a study conducted by SCIP.org, 97% of companies reported that support from government policies leads to an increase in costs for their projects. 

Additionally, when companies change procedures, there will be a period where expected costs change. Many companies saw increases in their expenses when they switched to a sustainable procurement process. However, you can think of it as an investment for the future of your company and planet which you can benefit from in the long run. 

Overcoming The Challenges

Adapting to a sustainable business landscape is no easy transition. Businesses may encounter several obstacles, while some may even resist change. But the challenges that come with green procurement can be overcome through several strategies and approaches, such as:

1. Cost Analysis

Conducting in-depth analyses to identify the long-term benefits of implementing green procurement practices can help procurement professionals understand how to reduce overall costs.

2. Supplier Collaboration

Developing strong partnerships with sustainable suppliers encourages green procurement practices while effectively creating competition in the supply chain.

3. Product Research and Development

Keeping pace with developments in sustainable products as well as staying informed on modern green technology will help in identifying the most suitable alternatives to non-green practices.

4. Supplier Certification

Overseeing supplier evaluation to verify environmental claims is a great way to optimize supplier management. That way, you hire only the right suppliers with verified sustainability certifications, such as Fair Trade and ISO 14001.

5. Collaboration with Trade Groups

Partnering with sustainability-oriented business groups to discuss green practices and the latest developments allows organizations to remain informed on the best approaches and strategies in sustainable procurement.

The Key Benefits of Green Procurement

Green procurement highlights the importance of aligning environmental responsibility with informed decision-making.

Furthermore, green procurement practices benefit organizations in several ways while effectively contributing to a more environment-conscious future. These factors range from environmental, economic, and social benefits as follows:

1. Environmental Benefits

Green procurement helps companies select sustainable alternatives to sourcing and purchasing. This can include products and services with the least environmental impact, resulting in reduced carbon footprint and lower resource consumption.

By choosing sustainable methods of procurement, organizations can help conserve resources, reduce pollution, and minimize negative impacts on diverse ecosystems.

2. Economic Benefits

By maximizing the use of resource-efficient products and reducing waste output, green procurement reduces the risk of supply chain disruptions and allows for better cost savings in the long run.

Green procurement practices are also an innovative opportunity to create strong connections in an industry that emphasizes the importance of sustainable policies, which will open up doors for procurement professionals with sustainability in mind.

3. Social Benefits

Sourcing materials and resources from sustainable suppliers is one way to increase community engagement as it supports smaller communities and businesses. Green procurement not only enhances engagement, it significantly improves public health as the products are responsibly selected, with fewer harmful chemicals and pollutants.

Having a well-established green procurement strategy is beneficial to brand reputation and marketing. Clients and stakeholders value the market presence of an organization with a positive brand image, which will attract more customers and investors.

Green Procurement Practices vs Green Procurement Policies

Although they are related ideas within the scope of sustainable procurement, there are several core distinctions between green procurement practices and green procurement policies.

We will explore their differences and highlight their positive impact on the procurement process.

Green Procurement Practices

Green procurement practices refer to the specific habits and behaviors within an organization that empower it to integrate sustainability into its procurement activities.

Examples of green procurement practices include:

• Procurement of energy-efficient appliances to reduce energy consumption.
• Using recycled or recyclable building materials such as recycled plastic and concrete blocks, reclaimed wood and steel, precast concrete, and zero-VOC paint.
• Locally sourcing goods and services that prioritize lowering carbon emissions and supporting the local economy.
• Utilizing eco-friendly, natural cleaning products. This includes non-toxic products that are free of harmful chemicals.
• Investing in renewable energy, such as naturally powered fixtures that rely on solar or wind energy to power facilities.
• Transitioning to digital document management to reduce paper waste.

Green Procurement Policies

Acting as a guideline for sustainable business endeavors, a green procurement policy is made up of a set of documented regulations that define how an organization operates by applicable environmental laws.

It acts as a blueprint for an organization’s strategic direction toward sustainable objectives, providing clear guidance for procurement leaders in building a sustainable business landscape.

A green procurement policy includes specific targets and statements about supplier selection standards, product value, and compliance with environmental regulations. These targets include:

1. Policy Statement

A policy statement typically involves a draft that outlines an organization’s commitment to minimizing environmental impact through sustainable procurement. It is a crucial aspect in maintaining compliance, accountability, and high sustainability standards within an organization.

2. Objectives

A set of objectives includes clear targets for achieving resource conservation, reduced carbon emissions, sustainable sourcing, and minimizing waste. Specific objectives enable procurement teams to prioritize what is needed to achieve their goals.

3. Scope

The scope of your strategy defines the range of applicability of each section within a green procurement policy. Typically, your scope enlists boundaries as well as clarifies who or what they apply to.

4. Environmental Regulations

Environmental regulations are crucial in conserving the planet and its diverse ecosystems. They highlight various environmental concerns while maintaining product standards involving sustainable sourcing and the use of energy-efficient, and earth-friendly products.

5. Supplier Selection Criteria

Supplier selection criteria refer to the standards used by an organization to determine which suppliers prioritize sustainable and socially responsible sourcing. Selecting sustainable suppliers enables procurement teams to ensure cost savings and high-quality standards while maintaining sustainable practices.

6. Policy Compliance

Enforcing compliance with policy affirms the importance of adhering to applicable environmental procurement regulations. This involves enforcement as well as ensuring compliance through monitoring activities and stating consequences for non-compliance.

7. Monitoring and Record-Keeping

Real-time reporting is what allows procurement managers to accurately record all activities during each step of their procurement processes. Comprehensive record-keeping enables effective performance evaluation, risk management, transparency, and benchmarking.

8. Training and Awareness

This refers to a method of training and educating procurement teams on sustainable purchasing. Training and awareness are integral to achieving sustainability objectives by encouraging a culture that emphasizes environmental responsibility.

9. Accountability

Accountability reiterates the responsibilities an organization has to commit to sustainability, reasserts consequences for non-compliance, and holds any uncooperative individual or sector accountable for irresponsible activities.

10. Target Timeframes

Target timeframes align with an organization’s sustainability objectives. It refers to the establishment of targets and timelines for green procurement practices and indicates clear goals for progress and development.

11. Resources and Data

Sustainability objectives rely on in-depth data analysis and various resources to aid them in decision-making, tracking activities and progress, and overall organizational enhancements. Easily accessible resources and data also make it possible to provide information on all applicable laws and regulations.

Companies Who Embraced Green Procurement 

Organizations across the globe have embraced green procurement and are determined to put sustainable policies into practice. Below are some examples of companies that committed their efforts to achieving sustainable and socially responsible business.

1. IKEA

Swedish furniture and home decor giant IKEA has innovated modern and sustainable methods of sourcing, in addition to the products they sell. Their products include energy-efficient light bulbs, rechargeable batteries, as well as other products sourced from recycled materials.

IKEA also transitioned to 100% renewable energy across all their factories and storage facilities, thus minimizing their energy consumption and decreasing their carbon output.

2. Coca-Cola

Coca-Cola has set sustainability objectives in its procurement policies to reduce the environmental impact of its products. Aside from utilizing recyclable packaging, they have set a goal of returning over 100% of the water used in the production of their drinks.

With a base year of 2015, they established an ambitious target of achieving a 25% reduction in their carbon footprint by 2030.

3. L’Oréal

French cosmetics company L’Oréal achieved a significant number of its objectives by the end of 2022, with an impressive reduction of 91% in CO2 emissions throughout their factories and warehouses.

Their commitment to green procurement practices included a well-formulated plan to only use sustainable packaging, responsible water management, and sourcing materials from sustainable suppliers.

Conclusion

In this exploration of green procurement, we’ve uncovered the origins of this sustainable practice and delved into the concept of green purchasing, shedding light on its positive impact on the environment and human health.

As companies increasingly embrace green procurement, it becomes crucial for procurement professionals to navigate the associated challenges. By understanding the obstacles faced by procurement teams, one can better address them and contribute to the successful integration of sustainable practices in the procurement process.