Aligning the Procurement function with CSR
Committing to the road to sustainable development is an all the more effective approach when it also involves suppliers. How can we give the Procurement function the means to fully play its part in this strategic mission?
Aware of the stakes for their activities and encouraged by their shareholders, their customers and their employees, many companies have fully embraced the subject of sustainable development. The objectives they have set themselves reflect this solid commitment: the automotive group Stellantis is thus aiming to achieve carbon neutrality by 2038; the Kering luxury group has the ambition of regenerating a million hectares of nature and is committed to having a “net positive impact” on biodiversity by 2025; Nestlé intends to ensure that 100% of its cocoa comes from farms excluding the use of child labor; etc.
In addition to their level of ambition, these commitments have a point in common: it is impossible to put them into practice without associating the supply chain. That is why Stellantis announced that it would also take into account the greenhouse gas emissions of its main suppliers—and that it might be led to select them according to this criterion. Kering launched pilot projects to accompany the evolution in the pastoral practices of Mongolian cashmere goat breeders, from whom it supplies itself. And Nestlé has introduced the payment of bonuses to farmers who send their children to school rather than make them work.
Concretely, these actions imply not only evolving the choice criteria for suppliers and the management of relationships with them, but also engaging in co-innovation and extended cooperation. An in-depth transformation that calls heavily on the Procurement function, which is sometimes ill-prepared and ill-equipped to respond. Indeed, historically tasked with safeguarding price and quality criteria, Procurement now finds itself charged with new, more delicate arbitrations. The adoption of partnership relations with suppliers breaks with the harsh commercial negotiations it has often been accustomed to. Its internal positioning is also evolving: it is invited to participate in industrial strategy decisions from an earlier stage, alongside the business units and the Sustainable Development department. So many mutations that often necessitate a genuine overall transformation.
In this synopsis:
– Organizing a constructive dialogue between the CSR department, Procurement and the business units
– Involving Procurement to improve your CSR performance
– Identifying and steering your supply chain’s CSR challenges
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