The Impact of ESG on Procurement
Research has shown that two-thirds of the average company’s ESG footprint lies with suppliers. Environmental, social, and governance is the measurable evolution of Corporate, Social, Responsibility (CSR). Environmental covers issues around climate change, such as pollution, carbon emissions and footprint, deforestation, and more; the Social covers everything from health and safety, human rights, diversity, equality, and community impact; while Governance deals with business ethics in general, encompassing compensation, bribery and corruption, as well as legal and regulatory compliance. Sustainable Purchasing practices can incorporate ESG into day-to-day operations as it directly determines what is purchased, from whom, how it is delivered, and product lifecycle sustainability, while indirectly influencing both suppliers and consumer behaviour. Furthermore, increase in demand for sustainable products and services is reflected in a company’s buying decisions, and has a broader eff...