Jigyasa Kishore, Vice President – Enterprise Sales and Solutions, Moglix, discusses the strategic imperative that is green procurement, which is driving the shift towards more responsible purchasing practices.

A green tide is taking over the business world. Consumers, investors and regulators are increasingly demanding businesses to operate with environmental and social responsibility at the forefront. Nearly 50 per cent of consumers today are willing to pay a premium to buy from businesses that have a strong purpose and commitment to sustainability. This figure jumps up to 73 per cent of buyers in the B2B landscape. Such market sentiments mean that green businesses can expect to enjoy operating margins 3.7x higher on average than their traditional business peers.
Amidst the rising demand for sustainability, businesses are embracing procurement as a pivotal tool to drive corporate sustainability goals. Green procurement, with its focus on environmental and social factors in sourcing practices, is increasingly recognised as a strategic approach to align supply chain activities with sustainability objectives.

Benefits of going green
Green procurement, also known as sustainable procurement, goes beyond simply acquiring goods and services. It’s a strategic approach that integrates environmental considerations into every stage of the purchasing process. By prioritising environmentally-friendly products, services and suppliers, companies can significantly reduce their environmental footprint and contribute to a more sustainable future.
The positive impact of green procurement is far-reaching, offering a compelling case for businesses to embrace this novel approach.
• Reduced environmental impact: Green procurement directly tackles environmental challenges by minimising resource depletion, lowering carbon emissions and protecting ecosystems. Choosing energy-efficient equipment, recycled materials and local suppliers all contribute to a smaller ecological footprint for the business.
• Cost savings: Sustainable procurement might seem counterintuitive from a cost perspective initially. However, the long-term benefits outweigh the short-term adjustments. Energy and resource-efficient products save on operational costs. Additionally, minimising waste disposal reduces fees and promotes responsible resource management.
• Enhanced reputation and brand image: Consumers are actively seeking out businesses committed to sustainability. Implementing green procurement demonstrates a company’s commitment to social responsibility, fostering brand loyalty and attracting environmentally conscious consumers.

Green procurement strategy
Building a successful green procurement programme involves a multi-pronged approach:
• Supplier engagement: Collaboration is key. Partnering with suppliers who prioritise sustainability practices strengthens the entire supply chain’s environmental impact. Evaluating potential vendors based on their responsible sourcing practices and environmental certifications is crucial. Companies such as HUL and IKEA use stringent evaluation criteria to ensure that they partner only with the most responsible suppliers.
• Product life cycle considerations: Green procurement goes beyond the initial purchase. It considers the environmental impact of a product or service throughout its entire life cycle, from raw material extraction and production to use and disposal. Choosing products with recycled content, low energy consumption and easy end-of-life disassembly or recycling options is imperative to make sure that sustainability is built into the entire product journey rather than just the initial stage. Evaluation tools such as Life cycle sustainability assessment (LCSA) can help assess a product’s environmental, social and economic impacts throughout its life cycle, from raw materials to disposal.
• Compliance and standards: Staying abreast of environmental regulations and industry standards is vital for effective green procurement. Regulatory bodies often set guidelines for energy efficiency, waste management and hazardous materials use. Aligning procurement practices with these standards ensures compliance and responsible sourcing.

Grass isn’t always greener
While the benefits of green procurement are undeniable, implementing such a programme does come with its own set of challenges.
Existing suppliers might be hesitant to adapt to new sustainability requirements. Even internally for a business, employees responsible for procurement may lack the training and knowledge to effectively implement green practices.
To overcome such challenges, engaging all stakeholders, from procurement teams to executive leadership, is vital. Communicate the environmental and financial benefits of green procurement to gain buy-in at all levels. Invest in training for procurement professionals to equip them with the knowledge and skills necessary to make informed, sustainable purchasing decisions.
Collaborate with industry partners and sustainability organisations to leverage expertise and access resources.

Measuring true impact
Without clear metrics, gauging the success of green procurement efforts becomes an exercise in guesswork. KPIs should serve as the compass for the sustainability journey.
One crucial metric is tracking carbon footprint reduction. Measure the emissions associated with purchases and set ambitious goals for ongoing decrease. Another key area is waste diversion. Implement systems to monitor how much waste is diverted from landfills through responsible disposal and recycling practices. Finally, analyse suppliers’ sustainability ratings through established systems. This ensures that the supply chain is aligned with environmental goals and avoids inadvertently undermining efforts through unsustainable sourcing practices. By tracking these KPIs, businesses gain valuable insights into the impact of green procurement programs and can refine strategies for continuous improvement.

A bright green future
The future of procurement is bright green with exciting developments afoot.
Advanced data analysis and life cycle assessment tools will facilitate more informed and impactful purchasing decisions. Embracing the circular economy, which focuses on extending product life cycles, will drive the utilisation of recyclable and reusable materials. Increased visibility into supply chain practices will empower companies to collaborate with vendors who uphold sustainable practices.
With these developments and ever-increasing adoption by existing businesses, green procurement is poised to play a central role in shaping sustainable business practices and ensuring long-term corporate success.
By embracing green procurement, an organisation doesn’t just take a step towards building a sustainable business – it builds a legacy. The future that businesses envision, the one where environmental responsibility and business success go hand-in-hand, starts with the next purchase decision. It’s time to embark on this journey, one sustainable choice at a time.

About the author
Jigyasa Kishore comes with 15+ years of experience at building brands, enabling enterprise growth, and transforming organisational performance with a technology-first approach. At Moglix, she leads brand growth as a digital supply chain solutions architect for large manufacturing enterprises. She is an alumnus of the Indian School of Business, Hyderabad, and Bangalore University.