ESG Goals Suffer as Green Suppliers Remain Rare

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by KnowESG,

Amazon.com, Inc.

KnowESG_ESG Goals Suffer as Green Suppliers Remain Rare

Amazon's latest study heralds a "new era of smart corporate purchasing," emphasising the growing importance of sustainable practices in procurement decisions.

Despite the heightened demand for responsible purchasing, the research reveals that unsustainable supply chains pose a significant obstacle, hindering businesses from establishing and fulfilling green procurement targets.

Conducted globally with input from over 3,000 procurement leaders, the study conducted by the US tech and retail giant indicates that 85 per cent of respondents encountered challenges in finding suppliers committed to sustainability. This difficulty, they claim, has impeded their companies from effectively setting and attaining green procurement objectives.

Surprisingly, 80 per cent of participants indicated that they had directives to source from certified sellers, including those that are sustainable, local, or owned by disadvantaged groups.

Interestingly, the study also found that 40 per cent of buyers without specific mandates still considered a supplier's environmental, social, and governance (ESG) efforts when making purchasing decisions. However, despite the evident emphasis on responsible practices, cost remained the top priority in procurement decisions, with 44 per cent of respondents citing escalating purchase costs as their primary challenge.

While 35 per cent of those surveyed prioritised preparation for unexpected economic changes, sustainability was identified by a third of UK procurement professionals as a growing consideration in supplier evaluations. Although 92 per cent of decision-makers expressed the importance of ESG policies, the research suggests that this sentiment does not consistently translate into action.

Even though a majority of respondents recognised the significance of ESG policies, only 32 per cent of UK procurement professionals expressed a desire for their organisations to allocate more time and effort to establishing and meeting ESG goals or sourcing from specific types of suppliers.

Additionally, 86 per cent of UK procurement professionals agreed that the challenge of finding suppliers committed to sustainable practices hindered their companies from setting or achieving sustainability goals in procurement.

In light of these findings, Alexandre Gagnon, Vice President of Amazon Business Worldwide, commented, "We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success." Gagnon emphasised that procurement not only sustains operations but also plays a crucial role in achieving organisational goals. He added that with intelligent business buying, companies have the tools to leverage procurement as a growth driver for their organisations.

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Source: Business Green

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