The procurement solution that looks after the details so you don’t have to

For anyone working in procurement, responsible sourcing is now an essential part of the job. Not only are procurement teams tasked with finding the best price and delivering the greatest value for their organisation, they now have to be able to demonstrate they are using suppliers that take their wider responsibilities seriously, to fit in with wider organisational mandates and pressure from customers and investors. This will include both environmental practices of suppliers but also encouraging the use of smaller or local businesses, as well as those from particular backgrounds.

Yet while this is generally part of the due diligence process carried out on key suppliers, it is often not the case with organisations where there is a smaller spend. Often such transactions are put on a company credit card with little thought for the provenance of the item, or the supplier. Yet, put together, the amount of money spent on indirect items – such as office supplies, furniture and other business essentials – is significant.

Businesses that can ensure they are directing portions of their annual spend toward certified sustainable items can help meet their organisation’s sustainability goals while doing their bit to help create a better business environment for everyone. One of the challenges, though, is to research the credentials of individual items they may want to buy; something that can be time-consuming and challenging when starting from scratch.

Amazon Business offers a solution to this. As well as ensuring users benefit from business-only prices and Amazon’s speedy delivery network, its use of the Climate Pledge Friendly label – which includes over 40 certifiers such as EPEAT, Carbonfree Certified, and The Forest Stewardship Council – as a search filter means buyers can seek out products with sustainability certifications. Teams can go even further and create a set an automated policy to prefer products with sustainability certifications.

Another useful certification is Amazon’s own Compact by Design label, which identifies items that have a more efficient design. These might involve the elimination of excess air, water or packaging that would make items heavier, leading to smaller and lighter items. At scale, these small differences in product size and weight lead to significant carbon emission reductions.

Crucially, procurement teams can also access robust information around just what has been spent, and the proportion of this that has been on items with sustainability certifications. This means organisations can, in turn, demonstrate their own sustainability improvements, aligning their purchasing behaviour with wider organisational goals.

It’s not just environmental concerns that should form part of a responsible sourcing policy. Amazon Business’s wide network of selling partners means buyers and employees can choose to buy from particular groups of suppliers.

This has been a core part of responsible sourcing among key suppliers for some time – with small or local businesses or women/minority-owned organisations often the main focus – but being able to easily identify such companies effectively opens the door to this policy also being extended to indirect or off-contract spend.

In the UK, small and medium-sized firms sold more than 950 million items on Amazon in 2021, helping create 175,000 jobs, while in the US more than 60 per cent of sales made through Amazon go to independent sellers^[1], the majority of which are small or medium-sized organisations.

Again, procurement teams can access robust data to demonstrate the amount of spend that is directed this way, and any improvement year-on-year, which can show the wider value they bring the organisation. Doing so from a previously untapped source such as off-contract spend – around which very little data traditionally exists – means there’s potential to have a significant impact, with very few extra resources required.

From a wider business perspective, increasing spend on products with sustainability certifications and with sellers from particular backgrounds can bring you closer to your business values and goals, but it can also enhance a company’s reputation. In turn, this can lead to more business and a stronger brand, and make it easier to attract and retain employees and find investment.

^[1] https://press.aboutamazon.com/2023/5/amazons-u-s-small-business-empowerment-report-shows-continued-sales-growth-for-independent-sellers

Originally published on The Independent.