Working toward more sustainable procurement practices

Sustainability has taken center stage in most modern business strategies, and procurement is no exception. Organizations around the globe are increasingly embedding sustainability into their procurement operations to reduce environmental impacts, improve social accountability, and secure long-term economic benefits. For chief procurement officers (CPOs) and procurement leaders, prioritizing sustainability is a crucial part of a larger responsible purchasing strategy—it’s essential for driving company goals, maintaining compliance with government regulations, and meeting growing customer expectations.

Implementing more sustainable procurement practices may seem daunting at first. The good news is that organizations don’t need to overhaul their entire procurement process overnight. By adopting thoughtful, incremental steps, businesses can make significant progress toward more sustainable procurement that aligns with their goals and strengthens their brand reputation.

The pillars of more sustainable procurement

Sustainable procurement relies on three foundational pillars, each addressing a distinct but interconnected aspect of responsibility:

Environmental considerations

Environmental sustainability in procurement revolves around reducing ecological harm and maximizing resource efficiency. This may involve prioritizing products with sustainability certifications, selecting those made from sustainable materials, or incorporating circular economy principles by purchasing refurbished or upcycled goods.

Smart purchasing tools can help identify climate-friendly products, such as electronics that are registered with EPEAT, or those that meet the strict safety and environmental standards outlined by EPA Safer Choice. These labels provide assurance that the products align with eco-friendly and health-conscious practices.

Another growing trend is the process of measuring and reducing a supply chain's carbon footprint. Companies achieve this by conducting detailed carbon assessments, identifying emission hotspots, and implementing more sustainable practices, such as optimizing transportation routes, sourcing eco-friendly materials, and partnering with certified Climate Pledge Friendly suppliers.

Social responsibility

Procurement practices can have a positive impact on social equity and community well-being. To enhance responsible procurement practices, businesses can engage suppliers that uphold fair labor practices, support diversity, and create positive social impacts. Consider these approaches:

• Partnering with small or local businesses to boost regional economies.

• Partnering with organizations that actively invest in community development projects, such as clean water access or reforestation efforts.

• Supporting fair trade-certified suppliers to encourage ethical production and promote environmental stewardship.

By integrating social responsibility with sustainability, businesses help create a positive ripple effect—fostering stronger communities, protecting the planet, and building a more equitable future.

Economic viability 

Sustainable procurement balances sustainability and profitability by ensuring upfront costs lead to long-term savings, making it a financially viable way to improve the bottom line. For example, adopting sustainable procurement strategies can reduce operational costs by cutting down on waste, streamlining supplier networks, and minimizing reliance on volatile resources. 

When sourcing materials, opting for local or regional materials can help reduce transportation expenses while supporting local economies. Additionally, consolidating supplier lists by working with fewer, more reliable suppliers with sustainability certifications can lower administrative costs and improve pricing through higher-volume contracts.

Another key example is waste reduction. Companies that prioritize recycled or reusable materials can save on disposal costs and avoid penalties associated with excessive waste generation. Similarly, choosing suppliers with robust, environmentally conscious practices helps reduce the risk of supply chain delays caused by regulatory noncompliance or reputational damage. 

In the long run, these measures don’t just control costs—they build resilience. A stable and sustainable supply chain is better equipped to handle market fluctuations, disruptions, or resource shortages, ensuring steady operations and increased potential for revenue growth. Economic viability makes the entire sustainable procurement system feasible and scalable for the future.

Examples of more sustainable procurement practices

To illustrate practical applications, here are a few examples of organizations integrating sustainability into procurement to guide purchasing decisions:

• Sourcing products with sustainability certifications or eco-labels, such as those under the Climate Pledge Friendly umbrella or environmentally conscious labels like USDA Organic.

• Consolidating shipments to reduce transportation emissions.

• Switching to suppliers that offer eco-friendly packaging or bulk purchasing options.

• Sourcing products from local suppliers to reduce transportation distances, decrease carbon emissions, and support the local economy.

• Focusing on suppliers that use renewable energy or practice sustainable sourcing of materials.

Each of these actions can have a meaningful impact and, when combined, can significantly move the needle on sustainable procurement progress.

Benefits of adopting more sustainable procurement practices

Improving social responsibility

Sustainable procurement supports environmentally conscious suppliers and helps strengthen supplier relationships as partners align around long-term sustainability goals. By upholding sustainability standards and supporting local communities, organizations contribute to broader social equity and demonstrate alignment with customer values—both of which drive differentiation.

Potential cost reduction

Contrary to popular belief, sustainable procurement decisions often lead to cost reductions. Data from McKinsey indicates that strong environmental, social, and governance (ESG) credentials can reduce costs by 5 to 10 percent, as they prioritize operational efficiency and waste reduction. Practices like bulk purchasing, reducing energy consumption, and relying on durable, high-quality products can help minimize waste, extend product lifecycles, eliminate inefficiencies, and improve customer satisfaction.

Reducing environmental impact

By focusing on responsible sourcing and eco-friendly transportation options, businesses can work to  reduce their carbon footprint. For example, consolidating deliveries minimizes emissions, while switching to reusable packaging helps cut down on waste. Companies can also consider pre-owned certified products, which are inspected, cleaned, and repaired to excellent functional standards, extending their life and reducing e-waste and raw material extraction.

Enhancing brand reputation and trustworthiness

Customers, employees, and investors increasingly favor organizations that prioritize sustainability. A well-implemented strategy can elevate a company’s market position, creating a competitive advantage by bolstering loyalty, customer retention, and overall brand trust.

According to the 2025 State of Procurement Data report, 99 percent of organizations now have specific ESG objectives, reflecting the recognition that responsible sourcing is increasingly essential. Businesses that aren't sourcing with purpose risk falling behind.

Future-proofing

As regulations tighten and consumers demand more accountability, sustainable procurement positions companies to adapt quickly to future requirements. This proactive approach helps shield organizations from legal and reputational risks while fostering innovation.

Five steps to make procurement more sustainable

Organizations can make their procurement strategies more sustainable by taking a few actionable steps:

1. Assess current procurement strategies

Start by evaluating your current procurement strategies to identify areas for improvement. This involves analyzing supplier partnerships to assess reliability, costs, and sustainability performance metrics, as well as examining product life cycles. 

Additionally, review procurement policies with a sustainability lens, considering the environmental impact of materials, sourcing practices, and waste management. Look at whether your processes leverage technology for automation, tracking, and reporting, and identify any bottlenecks or inefficiencies that may be slowing down operations. As your organization begins planning general improvements, you can pinpoint places where more sustainable procurement policies fit in.

2. Set clear sustainable procurement objectives 

Establish measurable goals to integrate sustainability into your procurement process. Start by identifying key areas of impact—such as waste reduction, energy efficiency, or ethical sourcing—and set specific targets to address them. 

For example, aim to reduce packaging waste by 20 percent within the next year, transition to sourcing 50 percent of materials from suppliers with sustainability certifications, or prioritize vendors that use renewable energy. Ensure these objectives align with your organization’s broader sustainability goals and are supported by clear timelines, progress metrics, and accountability measures. Regularly review and adjust these goals to stay on track and adapt to new challenges.

3. Engage stakeholders and build strategic partnerships 

Involve key players across all levels—including internal teams, suppliers, and external partners—early in the process. Foster open communication to align objectives, share insights, and establish a unified vision for sustainability. 

Encourage cross-functional collaboration to identify challenges, leverage unique expertise, and co-create innovative solutions. Building strong, transparent partnerships ensures shared accountability and accelerates progress toward meeting sustainability goals effectively.

4. Integrate sustainability into procurement policies 

Once your organization’s sustainability goals are clearly defined, the next step is to weave them into your procurement policies. Start by establishing criteria for assessing suppliers based on their environmental practices. This could include evaluating their carbon footprint, waste management processes, and use of sustainable materials. Develop clear guidelines for selecting and working with suppliers that align with your sustainability objectives. 

Set up regular supplier assessments, such as audits or performance reviews, to monitor compliance and identify improvement opportunities. Encourage collaboration by working with suppliers to help them adopt more sustainable practices where possible. Additionally, consider incorporating sustainability clauses into contracts to hold suppliers accountable and ensure long-term commitment to these principles.

5. Monitor, report, and refine strategies 

Leverage e-procurement tools to track key sustainability metrics like energy usage, waste reduction, or supplier compliance. Create regular detailed reports to review progress toward your goals and evaluate the effectiveness of your initiatives. Use these insights to identify areas for improvement and adjust your strategies to enhance long-term sustainability outcomes.

Challenges in adopting sustainable procurement strategies 

While the benefits of sustainable procurement are clear, procurement professionals often face several challenges during implementation, including: 

• Identifying reliable products with sustainability certifications: Finding products with sustainability certifications or suppliers with a proven track record in sustainability can be time-consuming and complex. 

• Managing cost considerations: Sustainable products or materials can sometimes be more expensive, making it difficult to balance sustainability goals with budget constraints. 

• Navigating global supply chain complexities: Global supply chains often involve multiple stakeholders, making it challenging to maintain sustainable practices at every level and across regions. 

• Ensuring compliance with regulations: Organizations must stay updated on ever-evolving environmental regulations, which can vary significantly between countries. 

Companies can address these challenges by building partnerships with trusted suppliers, investing in training and capacity-building for procurement teams, and leveraging technology like data analytics or AI to improve supplier evaluation and supply chain transparency.

Best practices for improving procurement sustainability

Using ISO 20400 guidelines

ISO 20400 offers comprehensive guidelines for sustainable procurement, providing a framework for organizations to evaluate suppliers, embed sustainability into policies, and align decision-making with broader ESG commitments.

Leveraging technology and e-procurement

Digital procurement platforms like HAQM Business enable easier identification of more sustainable options, more streamlined purchasing, and enhanced supply chain visibility. Features like buying policies, bulk purchasing options, and analytics make it simpler for organizations to align their operations with sustainability objectives and report on their progress along the way.

Digital tools can also play an important role in risk management relating to sustainability by enabling organizations to establish workflows so teams buy from approved suppliers and contracts.

Case studies on sustainable procurement practices

Sustainable procurement practices can look different for every business, depending on factors like industry requirements, company size, budget constraints, supply chain complexity, and organizational sustainable development goals. Here are a few examples of organizations that worked with HAQM Business to implement more sustainable procurement practices.

• bp: In an effort to become more agile and sustainable, bp is embracing digital innovation—and partnering with HAQM Business and AWS to accomplish these goals. Leveraging digital procurement solutions has helped them automate procurement, create scalable processes, and begin eliminating waste across the supply chain. Since 2015, bp has focused on optimizing inventory and reducing waste caused by inefficient purchasing, leading to a 40 percent reduction in existing inventory. Additionally,  by consolidating orders and shipments with HAQM Business to one day per week, timed with their vessel schedules, they've added reliability to their supply chain while reducing transportation-related greenhouse gas emissions—moving them closer to their goal of being net zero by 2050.

• UC San Diego: UC San Diego is leveraging HAQM Business' Direct Delivery program to streamline deliveries by consolidating packages into a single truck delivery at a consistent time each day. The program also supports sustainability goals by using alternative fuel vehicles to lower carbon emissions. Additionally, it helps minimize congestion, enhance campus safety, and build trust with familiar delivery drivers who work closely with on-campus staff.

   

Moving toward more sustainable procurement practices

Sustainable procurement is no longer a "nice-to-have"; it’s a business imperative. By taking strategic, incremental steps, organizations can reduce their environmental footprint, strengthen supplier relationships, and secure a competitive edge.

Looking for tools to support your sustainability goals? HAQM Business provides solutions like access to products with sustainability certifications, buying policies that empower your team to make more sustainable choices, and spend analytics to review and report on purchases. These tools help align your procurement operations with your sustainability goals.