Driving ESG initiatives in procurement: insights from industry leaders

In a recent panel discussion at Amazon Business Exchange 2024, procurement leaders from diverse backgrounds shared their experiences and strategies for implementing ESG in their operations. Environmental, Social, and Governance (ESG) initiatives have become increasingly important for organisations across sectors, particularly in procurement where arguably one of the biggest impacts can be made towards ESG goals.

Defining ESG for different organisations

The panellists emphasised that ESG can mean different things to different organisations, but ultimately revolves around creating value for communities and stakeholders.

Richard Carroll, Chief Procurement Officer at Durham County Council, noted: "If you look at any of those definitions, it's very much around the social, the economic, and the environmental aspects of the business. And that ultimately is really important in Durham, particularly in the public sector because all of those aspects very much focus on the local communities."

For universities like Nottingham Trent, ESG is deeply integrated into their core mission. Claire Davies, Sustainable Procurement Manager, explained: "At Nottingham Trent University, we have four strategic themes and embracing sustainability is one of our strategic themes, and that runs through our research, our teaching, knowledge exchange and our business operations."

Challenges in implementation

While progress is being made, the panellists acknowledged several significant challenges in implementing ESG initiatives:

Data Collection

Claire Davies emphasised the difficulty in obtaining accurate carbon emissions data: "Data, carbon emissions data... it's getting that data from our suppliers. Embodied carbon is the best data we can get, so hard. We just need our suppliers to be able to provide embodied carbon data." This challenge underscores the need for improved data collection methods and closer collaboration with suppliers.

Cultural Change

Richard Carroll highlighted the resistance to change within organisations: "Changing the culture and implementing something where you have that clear resistance to change... we've always done it this way - worst phrase in the English language." To address this, Durham County Council adopted a two-pronged approach: "We took an approach where we said, right, we're gonna go top down, bottom up... I got leadership buy-in, we created all the infrastructure on the ground and we just squeezed the middle."

The business case for ESG

While ESG initiatives are often seen as costly, the panellists argued that they can actually drive efficiency and cost savings. Claire Davies shared: "Buying sustainably is not always more expensive. We've recently awarded our graduation gown contract and we've saved significant savings and it's made from recyclable materials."

A recurring theme was the importance of collaboration – both within sectors and between public and private organisations. "The public sector needs the private sector; the private sector and the collaboration is a necessity. We use the private sector to fill gaps that we can't deliver on, they supply the local jobs, they supply a lot of the infrastructure that we need." Richard Carroll noted.

Amazon Business is committed to supporting sustainable procurement practices

Amazon Business plays a significant role in supporting procurement teams to meet their ESG objectives. Richard Carroll highlighted how Amazon Business has collaborated with Durham County Council to promote local buying: "We brought Amazon business on board because they heard about this and they said, how can we get involved?" This partnership led to the implementation of a local buying filter on the Amazon Business platform for Durham County Council employees, automatically prioritising Durham-based suppliers in search results. This feature helps drive local economic growth and reduces carbon footprint associated with longer supply chains.

Amazon Business offers several tools and features to support responsible purchasing. The Climate Pledge Friendly badge helps customers identify products with sustainability certifications, making it easier to make environmentally conscious choices. The platform also provides detailed product information, including energy efficiency ratings and recycled content percentages, enabling informed decision-making.

For organisations focusing on supplier diversity, Amazon Business offers the ability to identify and purchase from small and diverse sellers, supporting inclusive economic growth. Furthermore, Amazon Business provides analytics tools that offer insights into purchasing patterns, helping organisations track and improve their sustainability performance. The Spend Visibility tool, for instance, allows customers to monitor their progress towards sustainability goals by tracking purchases of eco-friendly products.

As ESG becomes increasingly critical for organisations, procurement leaders are finding innovative ways to drive sustainability while balancing cost and efficiency. By collaborating across sectors, focusing on data-driven approaches, and aligning ESG with business objectives, organisations can create meaningful impact and prepare for a more sustainable future.