Procurement leaders sidelining environmental sustainability, survey finds

New research has confirmed that despite the increasing emphasis on sustainability in business operations, a significant portion of procurement professionals in the US and Canada continue to overlook and undervalue sustainability factors in their decision-making processes.

Procurement leaders sidelining environmental sustainability, survey finds

Sourcing departments continue to prioritise shorter-term objectives over ESG considerations.

In a recent survey of 250 senior procurement leaders in the US and Canada, conducted by Sedex, a supply chain sustainability solutions provider, 40% of respondents admitted that they do not consider sustainability at all when making procurement decisions.

Furthermore, half of the surveyed professionals acknowledged that sustainability either remains an afterthought or is completely disregarded in their business decisions.

This disparity is in contrast with the widespread adoption of sustainability commitments and reporting across various businesses operating in the region.

The study highlights that 90% of Russell 1,000 firms, the largest 1,000 public companies in the US by market capitalisation, produce annual environmental, social and governance (ESG) reports.

These findings underscore a considerable gap between corporate sustainability pledges and the day-to-day practices of procurement teams.

Despite mounting pressure from investors, legislators and consumers for businesses to prioritise sustainability, many sourcing departments continue to prioritise shorter-term objectives such as supply continuity and competitive pricing over ESG considerations.

As per the study, 34% of respondents failed to recognise any benefits of sustainable practices, perpetuating the misconception that sustainability is incompatible with procurement goals.

Sedex’s chief marketing officer Maurizio Capuzzo said: “These findings are a wake-up call for any business that is serious about its social and environmental performance.

“The research underscores the urgent need for executive teams to realign ESG commitments and operational goals, to truly embed sustainable practices in their organisations.”

The study emphasises that adopting sustainable practices can result in supply chain resilience and overall business success, with 63% of procurement professionals acknowledging that meeting sustainability targets directly impacts their performance evaluations or compensation.

Despite the advantages, only a minority of procurement directors prioritise sustainability, with merely 28% indicating that it is central to all decision-making processes.

Furthermore, the study unveils a lack of awareness regarding sustainability legislation among procurement professionals, with 37% admitting to being unaware of sustainability-related legislation affecting their business.

Sedex warns that this is particularly concerning considering the rise in laws with specific requirements for sustainable sourcing and supply chain due diligence.

An analysis last year found that ESG regulations have increased by 155% in the last 10 years.

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