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In our last article in this Spend Matters PRO series, we focused on several pressing issues that are shaping procurement from the outside in, yet chief procurement officers are primarily still concerned with issues set by an inside-out agenda — that is, cost-cutting and supply assurance targets mandated by upper management. However, our PESTLE analysis of factors shaping the modern CPO agenda identified broad outside-in trends that an organization needs to consider if it wants to truly tap and manage the opportunities (and risks) offered by external supply markets. (Read the CPO’s Conundrum: Parts1Aand1B.)
Nowhere is this more readily apparent than with the topic of sustainability and environmental stewardship, the focus of today’s brief. The environment is an inseparable component of any business. It forms the platform layer off which all goods and services are produced, and cannot be ignored. And the difference between effective and sustainable management and ineffective and unsustainable management, as pointed out inyesterday’s article, is shocking. Not only would investments in environmental sustainability focussed companies over the past two decades doubled an average rate of return, but millennials will pay a (small) premium for sustainably (and ethically) sourced products and you are ensuring that you will have raw material supply for years (and decades to come).