From theory to practice: implementing a responsible purchasing policy

A successful responsible purchasing policy begins with a thorough understanding of its fundamentals.

🎓 Definition and economic, environmental and social benefits

The ISO 20400 standard defines sustainable purchasing as purchasing whose environmental, social and economic impacts are positively oriented throughout the product life cycle, with the aim of minimizing negative impacts as far as possible.

According toAfnor, this is the acquisition of goods or services from a supplier or service provider carefully selected to reduce environmental and societal impacts, while promoting good practices in terms of ethics and human rights.

Responsible purchasing is based on the consideration of three types of criteria, which can also be transformed into assets:

🌿 Environmental: the carbon impact of a purchase (raw materials required, energy consumed during production and use, disposal).

✅ Measuring the carbon impact of a purchase helps to reduce GHG emissions, preserve natural resources and limit waste, thus actively participating in the fight against climate change.

🙍 So cial: respect for human and labor rights, consumer protection, respect for community rights and the ethical treatment of animals.

✅ These practices reinforce the company's reputation as a socially responsible player, attracting talent and customers who share these values.

💶 Economic: fair trade and value for money.

✅ Reducing long-term operating costs, winning the loyalty of customers who are sensitive to social and environmental issues, and accessing new emerging markets are all opportunities that a responsible approach to purchasing can offer.

According to ADEME, implementing a responsible purchasing policy is a unifying project, a vector for innovation, and a source of value creation.

There are many advantages for companies, including :

• Better control of costs and risks.
• More sustainable and secure supply.
• Enhanced competitive edge.
• Improved image with partners and customers.
• Compliance with current regulations.

⚖️ Regulations and standards

As of July 1, 2022, companies subject to the DPEF (Déclaration de Performance Extra-Financière - Extra-Financial Performance Declaration) must take into account Scope 3, which includes all indirect emissions linked to their activities. This obligation, accompanied by a transition plan, aims to detail actions to reduce GHG emissions and anticipate future measures.

ISO 14064-1:2018 reinforces this obligation by requiring the inclusion of all significant direct and indirect emissions in GHG balances. Emissions linked to purchasing, representing 50 to 90% of Scope 3, must be precisely accounted for to draw up an effective action plan with suppliers.

These new obligations offer opportunities to strengthen the supply chain by selecting suppliers capable of reducing their GHG emissions, thus ensuring the carbon competitiveness of both suppliers and their customers.

At the same time, since decree no. 2022-982 of July 1, 2022, companies have been required to do more than simply account for their emissions. They must also draw up an action plan to reduce these emissions. This transition plan, appended to the balance sheet, must detail past and future actions, for both direct and indirect emissions.

International momentum, such as the Science Based Targets (iSBT) initiative, is encouraging companies to adopt emission reduction targets aligned with scientific recommendations to meet the objectives of the Paris Agreement. Including Scope 3, these targets encourage companies to significantly reduce emissions, including those of their suppliers, service providers and subcontractors.

These milestones aim to integrate sustainability principles into the supply chain, ensuring responsible practices throughout the life cycle of products and services.

📊 Measuring GHG emissions

The first step in a responsible purchasing policy is to accurately and exhaustively measure the GHG emissions associated with the company's activities.

This assessment will enable the company to identify the major sources of emissions, with a particular focus on purchasing. An in-depth understanding of GHG emissions will then enable us to define concrete reduction targets and guide future actions.

🤝 Involve your suppliers

The key to significantly reducing a company's GHG emissions lies mainly in its purchasing, which accounts for up to 90% of the reduction potential. In order to achieve this objective, it is imperative to select products and services with the lowest emission factors, thus establishing a true positive carbon discrimination®.

The effectiveness of a sustainable purchasing policy depends on the active involvement of suppliers. Their involvement is essential to creating a sustainable supply chain. Making suppliers aware of the importance of reducing their own carbon footprint and encouraging them to adopt sustainable practices are key elements of this approach.

By fostering collaboration with the company's ecosystem, it is possible to build together a shared vision of environmental and social responsibility, thus making a significant contribution to the transition towards more sustainable purchasing practices.

🔎 Set up monitoring and reporting tools

The third step is to assess the overall impact of the sustainable purchasing policy implemented. Companies must assess the performance of their initiatives using relevant key performance indicators, linked to sustainability, ethics and supply chain operational efficiency.

A thorough assessment also ensures compliance with regulatory standards and the growing expectations of stakeholders.
For example, some key indicators:

• 📍 The percentage reduction in GHG emissions linked to the supply chain.
• 📍 The total amount ofGHG emissions avoided through responsible purchasing choices.
• 📍 The share of total purchases made in accordance with sustainability criteria and its evolution.
• 📍 Evaluating the improvement of working conditions in the supply chain.
• 📍 The rate of compliance with social standards and human rights.
• 📍 Reducing supply chain risks through sustainable choices.
• 📍 Response time to supply chain disruptions.
• 📍 Reducing costs related to waste and GHG emissions.
• 📍 Savings achieved through responsible purchasing practices.
• 📍 The percentage of purchasing expenditure devoted to innovative and sustainable products or services.
• 📍 The proportion of your suppliers with a CSR approach
• 📍 Assessing supplier satisfaction with responsible purchasing practices.
• 📍 Recognition or certifications for responsible purchasing practices.

🌍 Global Climate Initiatives platform shared by Purchasing, Finance, Sustainable Development and CSR departments

The GCI platform offers companies comprehensive services for autonomous production of their GHG Emissions Balance, and calculation of their own composite emission factors, or per unit of work, thus enhancing their carbon competitiveness©.

In addition, purchasing, finance, sustainable development and CSR departments share comprehensive, user-friendly tools for :

🚀 Examination of the volumetric data of the GHG Balance, to detect the most relevant sources of emissions. In this way, we select the suppliers for whom we need to concentrate our efforts to improve the quality of the primary data to be collected, and thus lead to a reduction in our emissions.

🚀 O perational support from several GCI experts - who also have genuine purchasing expertise - to help suppliers commit to the decarbonization of their business.

🚀 Encourage and monitor suppliers' commitment to calculating their own emission factors.

• Propagation" service: automatic dissemination of GHG emission factors to suppliers, giving them free access to calculate them online, in a simple, didactic, transparent and auditable way, and therefore opposable to third parties.
• A tool for analyzing the "carbon" weight of bids, enabling us to give preference to suppliers who present the best carbon "weight" associated with their supplies or services.

By creating a virtuous circle between an organization and its suppliers, we can define common reduction trajectories that benefit all parties.

Thanks to this collaborative management of the environmental performance of its suppliers, the concept of Sustainable Purchasing becomes real and concrete.

The weighting given to this "carbon weight" criterion, in relation to the price, will enable you to reduce your own environmental impact proportionally.

To find out more, see standards & measuring GHG emissions.

💪 Purchasing Decarbonization Webinar

Discover Philippe Mangeard's practical advice in this excerpt from the webinar organized by the CCI Grand Est on October 19, 2023. Immerse yourself in concrete solutions for effectively integrating the decarbonization of your purchasing into your corporate strategy, thus contributing to a responsible purchasing policy.