sustainable procurement
Sustainable procurement (or Green procurement) is a spending and investment process typically associated with public policy, although it is equally applicable to the private sector. It is linked to the wider agenda of sustainable development.
Organizations practicing sustainable procurement meet their needs for goods, services, utilities and works not on a private cost-benefit analysis, but with a view to maximising net benefits for themselves and the wider world.
In doing so they must incorporate extrinsic cost considerations into decisions alongside the conventional procurement criteria of price and quality, although in practice the sustainable impacts of a potential supplier's approach are often assessed as a form of quality consideration. These considerations are typically divided thus: environmental, economic and social (also known as the “triple bottom line”).
There is no single definition of sustainable procurement – not least because sustainability is a contested concept – and applications vary across organisational hierarchy and sector. However, there is a general acceptance that it involves a higher degree of collaboration and engagement between all parties in a supply chain. Many businesses have adopted a broad interpretation of sustainable procurement and have developed tools and techniques to support this engagement and collaboration.
A research by INSEAD Business School has demonstrated that Sustainable Procurement could yield positive economical benefits for private companies in terms of "Risk Management", "Cost Reduction" and "Revenue Growth".
Exogenous considerations: the “triple bottom line” [edit]
Procurement - the letting of contracts for goods, works and services on the best possible terms - has historically been based on two criteria, price and quality, with a view to maximising benefits for the procuring organisation.
Sustainable procurement broadens this framework to take account of third-party consequences of procurement decisions,
Organizations practicing sustainable procurement meet their needs for goods, services, utilities and works not on a private cost-benefit analysis, but with a view to maximising net benefits for themselves and the wider world.
In doing so they must incorporate extrinsic cost considerations into decisions alongside the conventional procurement criteria of price and quality, although in practice the sustainable impacts of a potential supplier's approach are often assessed as a form of quality consideration. These considerations are typically divided thus: environmental, economic and social (also known as the “triple bottom line”).
There is no single definition of sustainable procurement – not least because sustainability is a contested concept – and applications vary across organisational hierarchy and sector. However, there is a general acceptance that it involves a higher degree of collaboration and engagement between all parties in a supply chain. Many businesses have adopted a broad interpretation of sustainable procurement and have developed tools and techniques to support this engagement and collaboration.
A research by INSEAD Business School has demonstrated that Sustainable Procurement could yield positive economical benefits for private companies in terms of "Risk Management", "Cost Reduction" and "Revenue Growth".
Exogenous considerations: the “triple bottom line” [edit]
Procurement - the letting of contracts for goods, works and services on the best possible terms - has historically been based on two criteria, price and quality, with a view to maximising benefits for the procuring organisation.
Sustainable procurement broadens this framework to take account of third-party consequences of procurement decisions,