Sustainability: Adding Sustainability as Procurement’s New Value Proposition

Sustainability is increasingly gaining in importance for companies in general and procurement functions in particular. With extreme weather and natural disasters occurring more frequently across the globe and youth movements calling for us all to act now to save the planet, environmental protection is becoming a core task. Of equally increasing importance are a company’s social impact and ethical standards. Together these factors are broadly known as environmental, social, and governance (ESG) factors. Governments are increasing the pressure by issuing more sustainability-related regulations (e.g., the UK’s Modern Slavery Act and the CSR Directive Implementation Act in Germany). Furthermore, the market stakeholders, such as investors and customers, are demanding that companies focus more of their attention on ensuring sustainability. According to a recent “BCG Pulse of the Fashion Industry” update, 75% of consumers surveyed consider sustainability as extremely important or very important. And, more than 50% of consumers plan to switch brands in the future if another brand acts more environmentally and socially friendly than their preferred one.