Low Carbon – How This Millennial Procurement Approach Is Also Delivering Savings

Low Carbon – How This Millennial Procurement Approach Is Also Delivering Savings

Low Carbon – How This Millennial Procurement Approach Is Also Delivering Savings

Junior Consultant at Procura Consulting

 

The rise of CSR

Corporate Social Responsibility (CSR) has never been as important in business as it is today.

From the perspective of procurement excellence, the price of products and services remains important – but is no longer the only concern.

As access to information and resources grows across the globe, buyers are becoming increasingly aware of the environmental impact of their consumption choices and the carbon footprint they leave behind.

Trends such as the surge of veganism into the mainstream, the arrival of electric cars onto our streets and the move towards LED light bulbs in the average UK household indicate that, particularly in the richer, Western countries, people are making conscious efforts to reduce their carbon footprints and contribute to lowering world CO2 emissions.

Indeed, the UK is among the world’s leading nations in the transition to low-carbon policies (edie, 2018), where carbon emissions are at their lowest levels since 1894 (The Guardian, 2017) and, according to the Chartered Institute of Marketing (UK), 92% of millennials would choose to buy from a company committed to ethical business practices.

With the rise in competition and access to competitors across all industries putting a squeeze on company profits, focusing on the “triple bottom line” is becoming increasingly important for the modern day business and a move towards a low carbon procurement (LCP) strategy may just be the best way to reduce costs in a responsible and ethical way.

The good news is that when executed effectively, these two procurement objectives (cost reduction and lower carbon emissions) can go hand in hand with each other as an output.

 

The benefits of a low carbon procurement strategy

Items heavy in carbon consumption are a great source of savings and carbon reduction for companies and most, if not all, companies will have potential for improvement stemming from areas such as IT, business travel and commercial fleet procurement.

When low carbon procurement initiatives are put in place, savings can be immediately identified and acted upon:

  • Cornwall College’s IT department, for example, were able to save £40K and four million sheets of paper through one LCP initiative alone by simply increasing duplex printing from 5% to 67%. Other initiatives included improving travel efficiency for the college, where video conferencing initiatives were implemented ‘to reduce single occupancy car travel’, leading to savings in business travel costs and lowering carbon emissions in the process. (Carbon Matters, 2013)
  • Similarly, the Devon & Cornwall force implemented similar initiatives and were able to reduce their annual £1.2m print bill by £300,000 by replacing its laser and ink jet printers with multi-functional devices, resulting in a £1.5m saving over the length of the five year contract (Carbon Matters, 2013), reducing costs and carbon emissions in equal measure through a carbon aware IT procurement strategy.

 

The role of suppliers

It is not only customers and businesses who need to cut down on carbon emissions. Suppliers will find it beneficial to match the carbon objectives of their clients in order to continue to be their suppliers of choice, with ‘50% of multinationals set to select their suppliers based upon carbon performance in the future’ (CarbonTrust, 2011)

Indeed, companies such as BT are implementing procurement standards to encourage their suppliers to continuously assess and improve their environmental impacts while working with BT (BT, 2006). By cutting their carbon emissions, suppliers can often cut their costs too, and improve their own “triple bottom line” to remain competitive in an increasingly cost efficient and carbon aware business environment.

 

Points to consider

  1. The rewards for implementing such procurement strategies are immediate and long-term, and in many cases, companies fail to address these areas of indirect spend which add to their overall costs and carbon footprint.
  2. Working with a procurement specialist, with expertise in areas such as IT Procurement and Business Travel Procurement can help to drive savings and deliver notable reductions in costs and carbon emissions without affecting staff or quality.
  3. Running an Opportunity Assessment helps you to identify, evaluate and quantify the potential for organisation-wide savings in bought-in goods and services expenditure.