INCORPORATING SUSTAINABILITY IN

TO PURCHASING DECISIONSOriana Leishman PhD, MPH

Sr. Scientist, Ecolab

08 OCTOBER 2019

AGENDA

▪ What is sustainable sourcing?

▪ Why is sustainable sourcing important?

▪ A model for sustainable sourcing

▪ Resources

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WHAT IS SUSTAINABLE SOURCING?

▪ Definition of “Sustainable”

▪ Able to be maintained at a certain rate or level

OR

▪ Able to be upheld or defended

▪ Think broadly!

▪ Consider environmental, social, and governance issues

Defining your scope

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Defining what’s important, why, and how this adds value to your

organization is the critical first steps in sustainable sourcing

WHY INCORPORATE SUSTAINABILITY IN SOURCING?

Add value to your brand

• Example: A food manufacturer

• Sustainability policies and procedures around the sources of ingredients and packaging which enables new marketing claims, such as fully recyclable packaging

Deliver bottom line savings

• Example for any company:

• Sustainability policies in the purchasing of facility materials (toilets, sinks, wastewater treatment, lighting) all can lead to long term savings

Protect from risk or reduce compliance issues

• Example: A clothing manufacturer

• Sustainability policies requiring standards for human rights, wages, and working conditions, and/or commitments on supplier diversity

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WHY INCORPORATE SUSTAINABILITY IN SOURCING?

Global economic impact

Products on the market

Sustainable purchasing

policies

Sending an economic signal

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A MODEL FOR SUSTAINABLE SOURCINGSustainable Purchasing Leadership Council

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PREPARING A VISION

What will your business look like in 2030?

What is different about procurement in 2020 vs 2030?

How do you from here to there?

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VISIONUnited Nations Sustainable Development Goals

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ENLISTING SUPPORT

▪ Like any successful project….

▪ Align to business strategy

▪ Map your decision makers and stakeholders

▪ Ask for feedback to refine the ideas

▪ Understand the roles they play

▪ How to prepare for change

▪ How they want to be involved in the future

▪ Develop draft project plan and RACI

Building coalition and refining ideas

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Who or what process would benefit

most from incorporating sustainability?

Who may feel the most difficulty?

DESIGNING YOUR INITIATIVE

Level setting on the goal and the business case

Impact mapping MetricsTimeline and

resourcesCommunication

plan

Initial design to bring vision to life and gain commitment

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Focus on the value sustainable purchasing can add – not the

“values” aspect

COMMITTING TO SUSTAINABILITYMoving from Ideation to a Project

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LAUNCH INTERNAL PROJECT

▪ Kick-off meeting

▪ Level setting on the goal and “why” of the bigger business benefit

▪ Establishing roles and responsibilities

▪ Sharing the process

▪ Communications planning

▪ Expect to transition through the steps typical of team

▪ Keep champion and stakeholders engaged toinspire team members

▪ Embed into annual goals

Gathering the team

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ANALYZING

▪ Materiality Assessment

▪ Cross functional business tool, can be applied in a wide variety of places and context, including larger sustainability strategy

▪ Establishing what and how much different categories matter to your business

▪ Collaboration is essential!

▪ Internal and External stakeholders

Assess what matters to you and others

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From your perspective, what

is the highest value initiative

you could drive? Why?

What’s the most realistic?

ANALYZING

▪ Working with the results of the materiality assessment

▪ Evaluate benefit and effort of the top options

▪ Lay the groundwork first – don’t start with the ultimate

▪ Example – starting with “carbon neutral by 2022” might be too far for a company just starting out on a sustainable purchasing

▪ Narrow your options to what is feasible and meaningful

▪ Check in with your stakeholders – give choices and recommendations

Options and Impact

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Do your homework to frame up a

business case and feasibility

PLANNING

▪ Design with outcome in mind

▪ Evaluate strategies based on how they can deliver the outcomes you seek

▪ Design grids can be a useful tool to translateinternal and external feedback into actionable criteria

▪ Keep the broad team involved to thinkthrough consequences of the solution

▪ Identifying risks

▪ Key elements which could change economics of program or policy

▪ Include how exceptions could be made for temporary situations

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Identify and evaluate strategies for execution

How many ways can you think of to get to your

desired outcome?

What are the key risks/benefits of one of these

strategies?

PLANNING

▪ Certifications are out there for many types and classes of product

▪ Typically they conduct some review process on practices or attributes for a fee

▪ Most are for profit companies

▪ Often product specific

▪ Regionally focused

▪ Can limit suppliers qualifying in some categories

A word on 3rd party certifications

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Review as part of your homework to

understand the certification –

selecting one or more key attributes

already available may allow more

flexibility with suppliers

PLANNING

▪ Be prepared with communication plan and collateral:

▪ Policy documents

▪ Internal and external education materials

▪ FAQs

▪ Internal training

▪ System changes

▪ Once you’ve set your strategy re-engage stakeholders to finalize commitment

▪ Bring them along journey focused on the goal you’ve aligned to in the beginning of the process

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Identify and evaluate strategies for execution

How does your organization manage change?

How does your organization communicate

best?

COMMITMENTTo put strategy into action

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IMPLEMENT

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▪ Maintain or increase team communication

▪ Get feedback on the process from the teams impacted by the change

▪ Update FAQ, share learning

▪ Start tracking metrics

▪ Tell success stories!

Putting plans in to action

REPORT

Metrics

• Reporting against the stated metrics

• Incorporate other measures of success discovered in the process

• Keep key stakeholders and executive sponsors engaged through a regular cadence

• Reporting to wider audience can increase company-wide engagement

Learnings

• What worked/working, what’s not?

• Tell a success story – financial or process

• How could this be better in the future?

• Identify opportunities and risks in the short, mid, long term

Next Steps

• Restarting the cycle

• Cadence of restarting the process will be different depending on scale of the project

• New or different metrics

• Target areas

Follow your communication plan

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CONTINUOUS PROCESS

RESOURCES

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