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Responsible Procurement Makes a Difference

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Despite the challenges, there are many good reasons which make the case for responsible procurement


Responsible procurement aims at incorporating social, environmental, and ethical factors into sourcing & purchasing decisions. By practicing responsible procurement, sourcing managers realize added value when carrying out necessary purchases of products & services. They spend their procurement budget in such a way that, while delivering the required goods or services, the expenditure also contributes to wider responsible procurement policy goals.

Organizations have adapted their sourcing decisions, opting to buy products & services that support their policy goals in a variety of areas including green procurement, research ethics, prevention of  bribery, corruption and conflicts of interest, employment principles, safety, health & environment practices, fair trade & competition, protection of confidential information etc.
                                                               
Responsible procurement does pose some challenges as initial investments can be a problem for shrinking budgets; some benefits of responsible procurement cannot be expressed in monetary terms.  It can also be challenging to find suppliers able to supply the necessary requirements while ensuring adherence to responsible procurement practices. This is where market research and vendor due diligence becomes imperative.

Despite these challenges, there are many good reasons which make the case for responsible procurement:

  • Introducing responsible procurement requires strategic rethinking of procurement practices. Responsible purchasing practices can make a significant contribution to delivering strategic objectives of the organization. This can include policies on environmental protection, social inclusion, equal opportunities, employment, global solidarity, sustainable development etc. This event can also be used to make internal procedures more efficient; as well as to improve accessibility of supplier information to various stakeholders. By considering both price and quality of a proposal, responsible procurement encourages companies to build high quality standards in their delivery of services or products.
  • Responsible procurement turns investments in social responsibility and environmental innovation into a competitive advantage, enhancing the brand image of the company in the eyes of its customers. Explicitly building environmental and social requirements into supplier contracts ensures that suppliers comply with relevant policies. Besides this, to ensure that the suppliers keep meeting the responsible procurement requirements, it is important to integrate monitoring into the current supplier relationships. This includes holding periodic review meetings with suppliers and continually working to identify opportunities for collaboration and development.

How responsible is your procurement? Let's continue the discussion.

Comments

Deepa, you haev touched upon a very important subject of "Responsible Procurement". This is one space where there is immense opportunity for procurement orgnization to make provide competititve advantage to the business/corporate. It's a key differentiator between a world class procurement and an average procurement organization.

Thanks Avnish. I completely agree with you on the importance of RP. My next blog would talk about one of the policies within RP. Hope you would like that too.

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