EcoVadis, the world’s most trusted provider of business sustainability ratings, released its 2021 Sustainable Procurement Barometer. Conducted with Stanford Graduate School of Business, the research found that delivering on corporate sustainability goals has shifted to the top of the executive agenda, with 63% of executives now saying it’s very important, compared to only 25% two years ago.
“Many feared that the pandemic would negatively impact global sustainability progress. Our research found the opposite to be true – sustainability commitments and investments held steady or increased for 93% organizations,” said Pierre-Francois Thaler, co-founder and co-CEO, EcoVadis. “As procurement teams look to rebuild, many are realizing that strong sustainable procurement practices are essential to bolstering resilience and creating value.”
While corporate commitments and public pressure have increased globally, delivering on goals – especially in the supply chain – remains a work in progress. Only 48% of supplier respondents believe that the buying organizations they work with are truly engaged in sustainability and actively partner with them to foster sustainability practices in their commercial relationships. More alarmingly, 46% of suppliers said sustainability is important to their customers on paper, but is not reflected in the way they work together.
Select findings from the 2021 Sustainable Procurement Barometer include:
- Labor and human rights issues shape procurement strategy. In order, procurement organizations are prioritizing labor and human rights issues, followed by the environment, social issues, and business ethics, in their two – three-year strategies.
- Procurement is now paying attention to diversity, racism, nondiscrimination, and equity. 61% of procurement leaders say social issues will be “more important” or “significantly more important” over the next two to three years.
- Sustainable procurement proves key to supply chain resilience. 63% of corporate respondents, and 71% of supplier respondents, report that their sustainable procurement initiative helped them endure the COVID-19 pandemic.
- Sustainability performance is critical for revenue and growth. 69% of respondents are taking sustainability performance into consideration when selecting new suppliers and renewing contracts – up from 51% in 2019.
- Mid-size companies (from $100M to $1Bn in revenue) are embracing sustainability. 48% believe sustainability will have a net positive financial impact on their business, while 47% expect a sustainable approach to lead to improved operational efficiency and lower costs.
Conducted with the Value Chain Innovation Initiative at Stanford Graduate School of Business, the 2021 Sustainable Procurement Barometer is based on analysis from two surveys: one for buyers and one for suppliers, conducted as online questionnaires, followed by in-depth interviews with selected participants.
“At a time when the disruptions resulting from the COVID-19 pandemic and other disasters have led many companies to shift their focus to building resiliency in their supply chains, this timely report provides practitioners answers to four key questions: what exactly sustainable procurement is, who should be involved, why it should be done and how it can be achieved,” advised Professor Hau Lee, Faculty Codirector, Value Chain Innovation Initiative at Stanford Graduate School of Business.
For a detailed analysis of the key trends and issues in the sustainable procurement landscape today, download the 2021 Sustainable Procurement Barometer.