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  March 27th, 2024 | Written by

Procurement Leaders Lagging Behind on Sustainability Integration, Sedex Study Finds

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A recent study conducted by Sedex, a prominent provider of supply chain sustainability solutions, sheds light on a concerning trend among procurement leaders in North America: a significant portion are still overlooking sustainability factors in their decision-making processes. Despite growing calls for businesses to operate more sustainably, many procurement professionals fail to recognize the importance of integrating sustainability into their operations.

Key findings from the survey of senior procurement professionals in the US and Canada, conducted among companies not currently collaborating with Sedex, reveal troubling statistics. Shockingly, 40% of respondents admit that sustainability is not a consideration when making procurement decisions. Furthermore, half of the participants acknowledge that sustainability remains an afterthought or is disregarded entirely in their overall business decisions.

This disparity between corporate commitments to sustainability and actual procurement practices underscores a significant challenge faced by businesses today. Despite the widespread adoption of sustainability commitments and the production of annual ESG reports by many companies, there remains a disconnect between rhetoric and action within procurement departments.

Even more concerning is the perception among some procurement professionals that sustainable practices are incompatible with short-term procurement goals such as ensuring supply continuity and securing competitive pricing. This mindset is reflected in the fact that 34% of respondents fail to recognize any benefits associated with sustainable practices.

However, mounting evidence suggests that sustainable supply chain management can yield substantial benefits, including enhanced supply chain resilience and improved business performance. A recent study conducted by Forrester found that companies investing in sustainable practices through Sedex realized a remarkable 372% return on investment.

Despite these potential benefits, procurement leaders who prioritize sustainability are in the minority, with only 28% stating that it is central to all decisions. Additionally, the study highlights a concerning lack of awareness regarding sustainability legislation, with 37% of procurement professionals admitting to being unaware of relevant legislation that affects their business operations.

Maurizio Capuzzo, Chief Marketing Officer at Sedex, emphasizes the urgent need for businesses to realign their ESG commitments with operational goals. By embedding sustainable practices into their organizations, companies can unlock numerous tangible and intangible benefits, including improved supply chain management efficiencies, more effective ESG risk management, and enhanced reputation supporting long-term success. This study serves as a wake-up call for businesses to prioritize sustainability in their procurement strategies for a more sustainable future.