Sustainable procurement refers to a process where organizations fulfill their needs for goods, services, raw materials, utilities and work in such a way that the value for money is gained while the basic principles of sustainable development are thoroughly practiced. Hence, sustainable procurement benefits the society by keeping in mind the environmental crisis and shortcomings of traditional modes of procurement.
The conventional modes of procurement are generally conducted by competitive bidding where it ensures that the buyer receives goods or avails services for the lowest price that will best suit his needs. The main comparison in this mode of procurement is quality, quantity, time and location of the goods provided by the seller. Procurement is considered to be sustainable when an organization enhances it framework and meets their need for the above factors while keeping in mind the damage caused to the environment in traditional modes and shifting to various mindful methods of getting the same results.
Sustainable procurement is essential as it reduces risk. Suppliers who are known for using bad modes of production like the active use of child labor, dis regard for excessive pollution and no pollution control practices in play are all considered to be a hindrance in the development of sustainable procurement.
Sustainable procurement can also help in bringing down organizational costs in the long run as sustainable practices will lead to lower wastages and energy consumed which will in turn bring down the total actual cost of production that will benefit the company’s cost structure.
Sustainable procurement also helps in creating a surety for the organizations future needs especially for scarce resources by creating a potential solution for future shortage problems. The basis for sustainable development is fulfilling current needs by ensuring that future needs are not compromised. This is achieved by sustainable procurement for a company.
Sustainable procurement can be followed by all businesses regardless of their size or industrial sector. It can help in foreseeing various procurement problems for the future and improve company financials in the short run itself. The supply chain can be enhanced and improved for future needs by increasing flexibility and decrease carbon foot prints at the same time.
Sustainable procurement also helps a company in maintaining its pollution levels within the government norms and not pays extra dues/ fines for crossing the regulated levels. This will also add to the company’s goodwill and create a positive image in the minds of the general public. Hence, sustainable procurement techniques are becoming common and a vital factor in the corporate social responsibility of any sector which allows industries to correct any harmful practices in their production cycle. This will help mitigate the existing harmful practices that may be persisting in the company and its procurement cycles.
This practice also helps in identifying suppliers whose products have a low negative impact on the environment and have fair trade policies that are environmentally friendly. Using production raw materials that have been sourced responsibly is also a major influencing factor for sustainable procurement