↑ Global businesses are committing to key sustainability objectives such as reducing greenhouse gas emissions, eliminating slave labor, avoiding plastics, conserving water used in production, tapping into renewable energy sources and more. GETTY
This article is about “companies that are led by business leaders and practitioners who see social and environmental challenges as an essential driver of brand innovation, value creation, and positive impact”. The role of purchasing in these companies becomes vital to the implementation of this new purpose.
by Judith Magyar – 25 June 2019
How The Chief Procurement Officer Will Soon Become The Chief Purpose Officer
Getty Global businesses are committing to key sustainability objectives such as reducing greenhouse gas emissions, eliminating slave labor, avoiding plastics, conserving water used in production, tapping into renewable energy sources and more. The Chief Procurement Officer could soon be the Chief Sustainability Officer, or even the Chief Purpose Officer. That’s because people are finally realizing we must act immediately to create a healthier, cleaner world before it’s too late, and the way to do it is through the supply chain.
According to an EcoVadis procurement expert , investors, consumers, corporate executives and other organizational stakeholders all realize that corporate responsibility doesn’t just build a better world; it also drives financial value. Global businesses are committing to key sustainability objectives such as reducing greenhouse gas emissions, eliminating slave labor, avoiding plastics , conserving water used in production, tapping into renewable energy sources and more.
Procurement teams are at the forefront when it comes to driving such initiatives, and money saved on operations can be spent on achieving brand purpose, delivering better customer experiences and implementing sustainable business practices such as resources circularity.
A shining example
Johnson & Johnson is one company that has successfully coupled its procurement and sustainability practices to create an environment where suppliers actively help the company achieve its mission.
The company requires procurement partners to adhere to its code of conduct and follow responsibility standards, and at the same time, opens doors for small and diverse suppliers such as certified businesses owned by women, minorities, veterans and disadvantaged people through its Supplier Diversity Program.
For example, Johnson & Johnson buys office supplies from WildHearts Office, a “business for good” company, through the Ariba Network. WildHearts is the UK’s leading B2B social business and a member of Social Enterprise UK, a leading global authority and network for social enterprises committed to social procurement.
WildHearts promises to help save lives if you change your office supplies provider. The group’s profits go to a foundation that addresses economic injustice by giving people like struggling female entrepreneurs or those affected by social immobility a ‘hand up, not a handout.’
Managing spend smartly
Johnson & Johnson manages its $2 billion purposeful procurement spend with the help of technology like SAP Ariba.
“It’s impossible to operate 21st century businesses without a single view of spend,” said Jennifer Morgan, President, Cloud Business Group at the recent SAP Ariba Live event in Barcelona. “The spend management mandate is expanding, both within functions and across the organization. That creates an opportunity to improve collaboration across Finance, Procurement, and Supply Chain organizations, and to tackle joint business challenges with increased spend transparency.”
As Padmini Ranganathan, vice president of Products and Innovation at SAP, noted at SAP Ariba Live, the CPO is helping to protect the reputation of the company by creating social and environmental impact, thereby adding value to the brand and the shareholders.
“When you detect slavery in the supply chain, you don’t stop doing business in a particular country,” she explains. “What you do is mitigate the impact by creating standards that become the norm. Integrating supplier risk assessment into the procurement process, enables companies to address business challenges and take action using reliable data.”
More and more companies are looking to make the world a better place, and many are turning to new technology and the Ariba Network, in partnership with supply chain risk assessment experts like EcoVadis, to effectively manage their costs with conscience.
View original article at www-forbes-com.cdn.ampproject.org
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