An increasing number of companies are making an effort to abide by green procurement practices to minimize adverse environmental impacts. Negative PR arising from non-compliance of green procurement could be detrimental to the organization. But it’s not the fear of losing out that’s driving the companies to adopt green procurement practices, but factors like its ability to enhance the brand image, increase customer satisfaction, reduce cost and risk, and increase shareholder value. There have been many instances of product recalls due to non-compliance of green procurement, which has affected companies in manufacturing, distribution, recalls, and disposal.
Guidelines for Green Procurement
Abiding by green procurement practices requires procuring products with:
- Greater energy efficiency
- Utilizing clean energy source or technology
- Controlled use or absence of toxic substances
- Improved recycling ability
- Minimal packaging needs
- Extended durability
- Reduced water and other natural resource consumption
- Opting for products with minimal or eco-friendly packaging
- Giving preference to products that have obtained certifications or meet recognized environmental standards
- Procuring products that are designed to conserve water or have water-saving features.
Challenges to Green Procurement Practices
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Why Green Procurement?
This is how green procurement can benefit organizations:
- Green procurement practices can help organizations achieve cost savings. At a glance, the cost of green procurement may seem to be on the higher side, but considering the savings in materials and energy costs, reduced wastage and pollution, and quality improvement throughout the product lifecycle, significant cost savings could be achieved
- Adhering to green procurement practices minimizes supply chain risks by avoiding a PR disaster. Consumers are more conscious about their product and its effect on health. Many companies have taken a beating on their sales figure when they fail to abide by environmental standards
- Companies advocating for green procurement and actively seeking ways to be environment-friendly gain trust and acceptance from consumers. Consumers, government, and other stakeholders support the green movement, which, in turn, enhances their brand image
- Efforts to make the supply chain sustainable and introduce green product drives innovation in the industry. This innovation gives way to energy-efficient products, which can lead to further cost savings.
Implementing Green Procurement
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