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P2.2: Align Procurement Practices

CERES ROADMAP EXPECTATION

Companies will address sustainability performance in procurement criteria and contracting

While establishing a supplier code of conduct with clear expectations for social and environmental performance is an essential first step, implementation is even more critical. Suppliers must be monitored, and incentives and programs established to encourage and assist suppliers with compliance and performance. In short, companies must ensure their supplier codes aren’t just documents in binders, but effective tools for achieving social and environmental objectives.

One effective way to leverage the impact of a supplier code is by aligning procurement and purchasing processes with corporate sustainability objectives and standards. This creates a financial incentive for suppliers, and establishes sustainability as a priority for procurement managers and the company as a whole.

For this expectation companies were evaluated for their consideration of social and environmental criteria in procurement decision-making.

Key Findings

  • Forty-seven percent (291 companies) consider environmental and/or social criteria in procurement, up from 46 percent in 2012.
  • The eight percent (47 companies) in Tier 1 have formal policies in place for aligning procurement practices with corporate sustainability values.For example, Gap managers and executives meet regularly with leaders in its sourcing department to examine how issues related to working conditions may have stemmed from decisions made by the company. The company now trains all employees working in inventory management, merchandising, production, and sourcing on the importance of responsible purchasing practices.

To read the full analysis, key findings and sector insights from Gaining Ground, click here.

 

Interactive Data

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[23] Companies in Mediocre in 2014