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urchasing departments are going through a period of transformation.Consumers are becoming increasinglymore aware of the social andenvironmental impacts of the products they buy. The way an organisation manufactures its products and sources its raw materials can not only impact the bottom line, but also make or break a brand. Protection of brand image is critically important for organisations fighting toSUSTAINABLE PURCHASING: MYTHORREALITY?074GREEN SUPPLY CHAINYVON DONVAL, PARTNER, FIRMWIDE SUPPLY CHAIN LEADER, BEARINGPOINTMATTHIAS LOEBICH, SUPPLY CHAIN PARTNER, BEARINGPOINTP

maintain or grow their market share. Implementinggood environmental protection practices is a keycomponent of any Corporate Social Responsibilitypolicy and can be used effectively to add value to a brand. For purchasing departments, theselection of goods can no longer be purely driven by cost; other factors have an equal, if not greater, influence on their purchasing decisions.Given the impact the goods we consume have on our environment, the survey we recentlyconducted among organisations across Europe asks this question: "Sustainable Purchasing: is itmyth or reality?"We are living in an information age. Consumers aremore informed on where their products come fromand how they were manufactured. Effective brandingand marketing can result in a surge in demand fornew products. Similarly, negative press can seriously,and rapidly, damage an organisation's image, marketshare and profits.For many years, purchasing departments have beencharged with finding the right products at the best price. Decisions have been driven by costs andsecurity of supply. In the Sourcing Monitor survey about sustainable purchasing which weconducted among purchasing directors acrossEurope earlier this year, we have identified howpractices in purchasing departments are changing,largely as a result of the increased importance ofsustainability as part of Corporate SocialResponsibility.Purchasing departments are no longer purelyfocused on reducing costs and expenditure, they aretaking on an increasingly more strategic role inmanaging business risk and driving productinnovation throughout the whole organisation andwith third parties. REMOVING THE SHACKLES OFREGULATIONRegulatory requirements were the initial driver forsustainable practices as they necessitated greatertransparency of supplier actions and activities inmost organisations. Organisations that viewregulation as a constraint often fail to recognise thevalue sustainable practices can bring. Those organisations that have looked beyond thecurrent regulations, and sought ways of anticipatingfuture regulations, have used their sustainablepractices to exploit and develop new marketopportunities whilst also reducing operating costs. In such cases, those organisations' purchasing andregulatory functions often collaborate to anticipatetrends, understand and manage risks, and lead to closer and more robust supplier relationships.SUSTAINABILITY - IS IT ALL TALK,LITTLE ACTION?Most organisations recognise the importance ofcommunicating their Corporate Social Responsibility(CSR) policies. More than half of the organisationssurveyed, consider CSR a strategic priority.However, the number of organisations that haveimplemented sustainable purchasing policies is far lower. A mere 16 per cent of French and 23 percent of German companies have implementedsustainable purchasing plans for more than two-thirds of their product portfolio. Similarly, only 30per cent of Scandinavian companies evaluate morethan two-thirds of their suppliers using CSR criteria.MAIN IMPEDIMENT: INCONSISTENCYWITH SHORT TERM OBJECTIVESIt is clear from the findings that organisations are aware of what they must do, and aware of the importance of communicating about theirenvironmental practices to their consumers.However, implementing these changes has been slowas it is often seen as a cost. To make sustainablepurchasing a reality for a larger number oforganisations, it is important to approach it as avalue creation activity for both the organisation andits customers. Purchasing plays a critical role indelivering this value to the rest of the organisation.NURTURE TO REAP THE REWARDSAlthough the costs of implementing sustainablepractices can be a short-term deterrent to change,there are a number of examples of the additionalbenefits and cost savings that sustainable practicesdeliver in the medium and longer term.Forty seven per cent of European purchasingdirectors believe that value creation is the maindriver for implementing sustainable purchasingactivities. They see their sustainability practices as an opportunity to increase market share and strengthen brand image and stabilise the supply base.A leading champagne producer launched a project toreduce the weight of a standard bottle of champagneby 7 per cent. This comes at an initial cost, and theexpected return on investment period isapproximately four years, however there areimmediate benefits that can be gained through theassociation of the brand with good environmentalpractices. These positive brand messages can GREEN SUPPLY CHAIN075Photo:Yvon Donval (left) and Matthias Loebich (right)