Sustainable Procurement Strategies for Better Spend Management
Sustainability is now critical for companies to succeed across an increasingly diverse marketplace. Businesses must set themselves apart from the competition with values that are more than vision statements — companies must deliver actionable results on promises of environmental, social, and corporate governance (ESG) day to day.
Procurement is a cornerstone of this sustainable process. By creating and deploying sustainable procurement strategies that encompass everything from supply chain onboarding to product sourcing, relationship management, and reporting, businesses can capture end-to-end visibility that drives sustained value.
The challenge? Deploying proactive procurement is easier said than done. Here are three ways Coupa and EcoVadis can help.
Exploring the sustainable advantage: Reduced risk and improved ROI
As the world's most trusted provider of business sustainability ratings and collaborative performance improvement tools, EcoVadis is ideally positioned to assist companies in their sustainability efforts by reducing the risk of suboptimal decision making. Meanwhile, Coupa's Business Spend Management (BSM) platform is designed to help enterprises boost ROI without sacrificing sustainable practices. Sustainable BSM can help deliver measurable impact for your business and the broader community.
Coupa and EcoVadis can assist with multiple mission objectives, including:
Building the business case for sustainability
With supply chains rapidly growing more complex and interconnected, organizations need a way to effectively calculate their existing supply chain footprint, compare it to sustainability goals, and calculate a quantitative indicator of potential impact. This empowers companies to build a business case that both reduces the risk of supply chain missteps and helps boost ROI. Recent survey data by EcoVadis shows 63% of corporate respondents, and 71% of supplier respondents, report that their sustainable procurement initiative helped them during the COVID-19 pandemic.1
Benchmarking the competition: Coupa and EcoVadis streamline research
Sustainability doesn't happen in a vacuum. To ensure sustainable procurement processes meet evolving market expectations, it's critical for companies to leverage key sources, such as industry reports and publicly available competitor data. Coupa and EcoVadis can help streamline the capture — and contextualization — of this data.
Bolstering supply chain consistency
2020 made it clear: No supply chain is invincible. As a result, it's critical to combine procurement and spending practices with environmental, health, and safety data to reduce the risk of disruption and ensure sustainability isn't negatively impacted by lack of supply.
Designing for data-driven sustainability at scale
Data drives sustainability at scale. As noted by the 2021 EcoVadis Sustainable Procurement Barometer, this data isn't limited to internal sources — Sustainable Procurement Leaders reported a higher level of benefits across all categories, especially in risk mitigation and supply chain resilience: 85% vs 59% and 70% vs 42%, respectively.1
In practice, however, data volumes alone aren't enough to deliver superior sustainability. Companies must be able to combine disparate data sources on demand to deliver actionable insights. As a result, it's critical for organizations to select sustainability and BSM providers that deliver across key areas, such as:
- Data depth — For sustainability initiatives to succeed, data depth is critical. In practice, this means reliable access not only to how suppliers are handling their ESG responsibilities but how suppliers' suppliers (Tier 2) are addressing sustainability requirements. This is essential as customer visibility into supply chain practice increases. Even in arm's-length interactions, consumers expect companies to act responsibly, ethically, and sustainably.
- Industry breadth — The scope of supply chains is substantial. As a result, applicable data often includes hundreds or thousands of commodities, supplier activities, and indirect services.
- Actionable identifiers — Data collection is the first step. Contextualization comes next, followed by decision making. To ensure supply chain data sources deliver sustainable procurement practices, it's critical for companies to deploy tools capable of defining quantitative benchmarks that help compare market performance and incentivize ongoing improvement.
Integrating optimal solutions for digital spend management
Despite the uptake of automated workflow solutions to help streamline spend management, many companies remain frustrated by the lack of actionable and sustainable results.2 Why? Fragmentation. While solutions often address and automate specific aspects of ESG, the increasing scope and complexity of sustainability management at scale means that businesses can't afford the time or effort that comes with managing multiple platforms. Instead, enterprises need end-to-end solutions that deliver across the entire procurement process.
For example, by integrating EcoVadis data with Coupa Risk Aware, it's possible for companies to digitize key data, improve ESG, and drive procurement data simultaneously. With more than 55,000 businesses across its global network, EcoVadis provides an easy-to-read scorecard that adds the fourth pillar of sustainability to the current supply chain trifecta of price, on-time delivery, and quality. From sustainable raw material sourcing to supplier diversity initiatives and data-driven answers for ethical governance questions, Coupa and EcoVadis can help deliver agile decision making across the ESG framework.
Put simply? Underpinned by this powerful pairing, organizations can make sustainability a factor in procurement decisions across the supply chain, evaluate and measure ESG across suppliers' suppliers, and access one single number to weigh all procurement decisions.
Sources:
1 "Sustainable Procurement Barometer 2021," EcoVadis, 29 Jul 2021.
2 "The Deloitte Global Chief Procurement Officer Survey 2019," Abrar Khan, Preetha Devan, Rupesh Bhat, and Anya George Tharakan; Deloitte, 2019.
