It's time to stop doing sustainability as a project, initiative, or task force and recognize it as a core value that needs to be measured alongside traditional metrics like price, quality, and customer satisfaction. In this series, we show how achieving sustainability goals has a clear return on investment (ROI), leading to more sustainable operations, a stronger brand, and ultimately, winning in the marketplace.
Procurement is evolving - from cost reductions to strategic value. Procurement has taken on a significant role over the last two decades and will continue to rise in importance. Given that 98% of S&P 500 companies have publicly announced sustainability/impact reduction goals, the next evolution of procurement is clear: sustainability. Alongside traditional metrics like price, quality, and delivery time, sustainability needs to be considered because a company’s reputation, risk exposure, and profits are at stake.
The stakes running on the next evolutionary step of the procurement profession are clear and could not be higher - Save the world without sacrificing price, quality, or delivery time. This means that procurement professionals around the World need to Integrate sustainability as a decision-making factor when awarding, negotiating, and collaborating with suppliers in the supply chain.
Our collective livelihood and the health of our planet depend on embracing sustainability as a core value alongside cost, quality, and on-time delivery.
Sustainability is becoming a core value of modern, expanding businesses. Kloopify’s founder, Daniela Osio, was fortunate to start her career working with Shelley Stewart, a pioneer and a reference for Chief Procurement Officers (CPOs) worldwide and one of the business leaders who elevated this function to the strategic level and the C-suite caliber it has today.1
In the last 20 years, supply chains have become globalized, and the whole World has adopted a “just-in-time” and “zero-inventory” policy started by Toyota and the Toyota Production System. This required close coordination and logistics with global suppliers and service providers. COVID arrived, and it changed all that. We can all see how strategic, geopolitical, and sustainability shortcomings of current supply chains affect everyone on the planet.
As sustainability becomes a core value and not an optional extra, procurement departments need to achieve significantly higher levels of due diligence than they do currently – and track it with the same level of care as price, quality, and on-time delivery.
Sustainability is more than issuing a static company-level carbon footprint CDP report or answering a lengthy sustainability policy questionnaire like EcoVadis. Sustainability is about shared core values, measuring the actual environmental performance of suppliers and customers, and using this knowledge to drive measurable improvements.
Goals will be achieved when sustainability is measured and tracked with the same level of care and attention as price, quality, and on-time delivery.
To advance this process, we need data, data quality, and granularity to support decision-making. We must apply the MAYA2 principle: “Most Advanced. Yet Acceptable” and strive for accuracy but avoid decision paralysis guiding people and organizations to their zones of proximal development. In sustainability, proximal development signifies what individuals can readily embrace and implement independently and take ownership of their goals. This involves incremental changes and introducing supplier-specific data.
We need advanced resources and a climate action platform to guide this self-paced progression. We should design sustainability initiatives that align with the audience's readiness, making it easy for them to adopt and implement independently, without the need for extensive instructions, static reports, and expensive one-off consulting engagements. This is what Kloopify facilitates: increasing expertise, improving accuracy, avoiding paralysis, and, most of all, driving meaningful action.
This approach ensures that sustainability efforts are ambitious but also practical and user-friendly, aligning with what people can readily accept and integrate into their daily lives. In essence, the MAYA principle encourages us to balance our environmental goals, providing a vision for the future while respecting the present capabilities and willingness of our audience. By doing so, we can increase the likelihood that our sustainability initiatives will be embraced and succeed in the long run. That is why we launched Kloopify, a climate action platform for procurement professionals by procurement professionals.
What is at stake? A cascading effect involving trillions of dollars of transactions, investments in green and less-resource-intensive processes, the financial future of companies and organizations, the livelihood of millions, and the health of our planet.
1 Straight to the Bottom Line. JRoss Publishing. 2006 by Rudzki, Smock, Katzorke, Stewart
2 The MAYA Principle: Design for the Future, but Balance it with Your Users’ Present