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Overcoming Key Challenges of Sustainable Procurement Practices

Companies are increasingly placing more emphasis on sustainability procurement. A global study conducted by EcoVadis revealed that 97% of 120 supply chain professionals are placing a higher level of importance on sustainable procurement than before. In addition, Fortune 500 companies who have taken the lead in sustainable procurement have experienced great returns. Sustainable procurement is also an increasing trend in many developed countries, with European countries and the United States having put in place regulations that encourages sustainability in a company’s operations. Examples of such regulations include the Dodd-Frank Act on Conflict Minerals and the UK Environmental Liability Directive.

However, much can still be done to encourage the adoption of sustainability practices in many organisations and developing countries. Many studies have found that there is a lack of understanding and awareness of sustainable procurement concepts in many of these organisations and countries. Public organisations, being the biggest and most influential customers within a country, should continue to take the lead on sustainable procurement to encourage the adoption of such practices in private organisations. This will also allow for more focus to be placed on “mega sustainability” trends that will shape the markets of the future and the achievement of sustainable development goals.

Adopting Sustainable Practices in Procurement

Sustainable procurement is a process that takes into consideration sustainability issues throughout the procurement process, while ensuring value for money. Sustainable procurement differs from traditional procurement in that decisions made when practising sustainable procurement encompasses the environmental, economic and social impact of the Triple Bottom Line, as shown in the diagram below.

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Khoo Chai Luan, DPSM
Khoo Chai Luan has substantive years of experience in the professional field of procurement management, and specifically in the public sector. She is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Chai Luan completed the course on Diploma in Procurement and Supply Management (DPSM) in September 2018 at SIPMM Institute.

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