This series of posts is based on research conducted by EcoVadis and A.T. Kearney (see earlier posts under Related Articles). EcoVadis’s Wim Peeters shared findings from this research during a presentation at the Dutch Sourcing Awards earlier this month.
The top sustainable procurement policy challenges inside companies suggest that procurement does not yet have a mandate to incorporate sustainable CSR-focused initiatives into general sourcing and supply chain management programs. Consider how according to EcoVadis research, 50 percent of companies cite a lack of support from top management as a “critical challenge” (and 34 percent list it as an important challenge they must overcome).
Moreover, 43 percent and 39 percent (respectively) of companies suggest that “contradictory objectives assigned to purchasing managers” are critical or important challenges that must be tackled. Here are the other top challenges cited (combining respondents who selected challenges as either “critical” or “important”):
- Lack of information on supplier CSR practices (71 percent)
- Lack of metrics to measure and monitor progress (71 percent)
- Resistance from suppliers (69 percent)
- Lack of budget for internal or external support (64 percent)
- Lack of internal expertise on sustainability topics (57 percent)
- Unclear ownership of this process (47 percent)
Spend Matters research suggests that one of the key challenges to overcoming executive push-back or disinterest in supplier management programs – generally speaking, but inclusive of CSR and risk management initiatives – is a lack of knowledge on program design and success, such as dashboards to track metrics, alongside general procurement performance and supplier trending (think of it as “spend reporting” on suppliers for non-spend variables). But simply making tools available won’t do the trick to overcome adoption hurdles. Without executive support and associated change management programs from the start – unless there’s an unusually successful bottoms-up program – most CSR procurement programs are likely to remain more loosely than centrally coupled with everyday procurement and sourcing priorities.
Stay tuned for more coverage of the EcoVadis research.