The race to achieve net-zero emissions is now a critical focus for businesses and governments across the globe. In the UK, with legally binding targets to achieve net-zero by 2050, the pressure is on to reduce carbon emissions across all sectors of the economy. For procurement professionals, this presents both a challenge and an opportunity.
As the gatekeepers of supply chains, procurement teams have a unique ability to influence sustainability practices and reduce the environmental impact of business operations. But how can procurement professionals effectively contribute to the UK’s net-zero challenge?
In this blog, we’ll explore the strategies and tools that procurement teams can use to drive sustainability and decarbonise supply chains, aligning with the UK's ambitious climate goals.
Understanding the UK’s Net-Zero Targets
In 2019, the UK became the first major economy to pass laws to bring all greenhouse gas emissions to net-zero by 2050. This means that the UK aims to remove as many emissions as it produces, primarily by reducing carbon output and enhancing measures that absorb carbon, such as afforestation.
To achieve this, sectors across the economy—such as energy, transport, construction, and manufacturing—are required to drastically reduce their carbon footprints. However, the journey to net-zero doesn’t just involve large corporations or government bodies. It also extends to the suppliers and partners that businesses engage with, meaning procurement teams play a vital role in enabling the transition.
Procurement’s responsibility is not limited to internal sustainability; it must also encompass sustainable supplier practices, ethical sourcing, and a focus on reducing carbon emissions across the entire supply chain.
Why Procurement is Key to Achieving Net-Zero
Supply chains are one of the most significant contributors to a company’s carbon emissions, often accounting for more than 70% of a company’s environmental footprint. From raw materials to final delivery, every stage of the procurement process impacts an organisation’s carbon output. Therefore, the procurement function holds the key to unlocking more sustainable and carbon-efficient practices across the value chain. Some of the key ways procurement can drive net-zero efforts include:
1. Sustainable Sourcing: Procurement professionals have the ability to choose suppliers that prioritise sustainability. This could include selecting suppliers that use renewable energy in their manufacturing processes, offer eco-friendly products, or have robust carbon reduction strategies in place.
2. Supplier Collaboration: By working closely with suppliers, procurement teams can encourage the adoption of green technologies and carbon reduction initiatives. This collaborative approach helps suppliers meet sustainability goals and ensures they align with the net-zero commitments of the businesses they serve.
3. Reducing Transportation Emissions: Logistics and transportation are major contributors to carbon emissions. By optimising delivery routes, consolidating shipments, and working with logistics providers that use low-emission vehicles, procurement teams can significantly reduce transportation-related emissions.
4. Circular Economy Practices: Incorporating circular economy principles—such as recycling, refurbishing, and reusing materials—into procurement processes can reduce the environmental impact of production and disposal. This helps reduce waste and extends the lifecycle of products, contributing to overall carbon reduction.
Net-Zero Procurement Strategies
To align procurement efforts with the UK’s net-zero targets, companies must adopt a strategic approach to decarbonising their supply chains. Here are some practical strategies that procurement teams can implement:
1. Carbon Footprint Mapping: One of the first steps in reducing supply chain emissions is to gain a clear understanding of where those emissions are coming from. This requires mapping the carbon footprint of the entire procurement process, from sourcing raw materials to final delivery. Procurement teams can work with suppliers to gather data on energy use, waste management, transportation methods, and manufacturing processes. By identifying the largest carbon contributors, businesses can focus their efforts on the areas with the most significant impact.
2. Setting Clear Sustainability Targets: Once a company understands its supply chain emissions, it’s crucial to set measurable sustainability targets. These targets should be ambitious yet achievable, providing a clear pathway towards reducing carbon output. Targets might include: - Reducing carbon emissions in the supply chain by a certain percentage over a set period.- Sourcing a specific percentage of materials from suppliers using renewable energy.- Increasing the use of recycled or eco-friendly materials in products. By setting clear goals, procurement teams can track progress and hold suppliers accountable for meeting sustainability standards.
3. Supplier Engagement and Auditing: To meet net-zero goals, procurement teams must actively engage with suppliers on their sustainability practices. This involves: - Supplier Audits: Conduct regular sustainability audits to assess suppliers' environmental impact and ensure they are meeting carbon reduction targets.- Collaborative Workshops: Organise workshops or forums where suppliers can share best practices, learn about new sustainability technologies, and collaborate on joint decarbonisation initiatives.- Incentivising Green Practices: Offer incentives to suppliers who prioritise sustainability, such as long-term contracts, preferred supplier status, or bonuses for meeting carbon reduction milestones. This engagement fosters a culture of sustainability throughout the supply chain and encourages suppliers to innovate and improve their environmental performance.
4. Incorporating Green Procurement Policies: To embed sustainability into everyday procurement practices, companies should develop and implement green procurement policies. These policies outline the criteria that procurement teams must consider when sourcing products or services, such as: - Energy efficiency: Prioritising products that use less energy or come from suppliers that operate on renewable energy.- Material sustainability: Sourcing materials that are recyclable, biodegradable, or made from sustainable sources.- Low-carbon logistics: Choosing logistics providers with low-emission fleets or those offering carbon-neutral shipping options. These policies act as a framework for procurement teams to make more environmentally conscious decisions.
Overcoming Challenges to Net-Zero Procurement
While the shift towards net-zero procurement is essential, it does come with challenges. Some of the common hurdles procurement teams face include:
1. Cost Pressures: Sustainable products or services can often come at a higher price, at least in the short term. While the long-term benefits of sustainability (e.g., energy savings, waste reduction) can offset these costs, businesses may face initial budget constraints. Procurement teams should look for creative ways to balance cost and sustainability, such as negotiating longer-term contracts with green suppliers or consolidating purchases to secure better pricing.
2. Supplier Readiness: Not all suppliers are equally prepared for the shift to net-zero. Smaller suppliers, in particular, may struggle with the cost and expertise needed to implement green practices. In these cases, procurement teams must play a supportive role, helping suppliers transition to more sustainable methods and offering guidance on how to reduce their carbon footprint.
3. Data Availability: Tracking supply chain emissions requires accurate data, which can be difficult to obtain, especially when dealing with multiple suppliers across different regions. Procurement teams should invest in technologies that help gather and analyse emissions data, such as carbon accounting software and supply chain transparency tools.
The Role of Technology in Achieving Net-Zero
Technology will play a crucial role in helping procurement teams meet their net-zero targets. Here are some key technologies that can support sustainability efforts:
- Supply Chain Transparency Tools: These tools provide visibility into every step of the supply chain, allowing procurement teams to track emissions, identify inefficiencies, and monitor supplier compliance with sustainability standards.
- Carbon Accounting Software: This software helps businesses calculate their carbon footprint, set reduction targets, and track progress over time.
- Sustainable Sourcing Platforms: These platforms connect procurement teams with eco-friendly suppliers and products, streamlining the sourcing process and making it easier to find sustainable options.
- AI and Machine Learning: AI-driven demand forecasting and inventory management tools can optimise procurement processes, reducing waste and improving energy efficiency across the supply chain.
Final Thoughts: Procurement’s Crucial Role in the Net-Zero Journey
The journey to net-zero is a long and complex one, but procurement professionals are uniquely positioned to drive significant change. By taking a proactive approach to sustainable sourcing, collaborating with suppliers, and leveraging technology, procurement teams can lead the charge in reducing carbon emissions and creating greener, more resilient supply chains.
As the UK continues to push towards its 2050 net-zero target, businesses that embrace sustainable procurement practices will not only contribute to national climate goals but also gain a competitive advantage. Sustainable procurement is no longer a “nice to have”—it’s a business imperative that will define the future of supply chains in the UK and beyond.
By implementing these strategies, procurement teams can transform the way they operate and play a key role in building a sustainable, net-zero future for the UK.
