The role of digitization in meeting ESG procurement goals
Sustainability and ESG frameworks are becoming increasingly crucial for businesses across sectors today. As Boston Consulting Group reports, over 80% of companies intend to increase their investments in sustainable practices. In this regard, procurement and supply chain are crucial, given that around two-thirds of the average business’s ESG footprint can be traced back to their partner suppliers.
Building a practical ESG framework for procurement can put your business on the leaderboard in your industry. And digitization plays a pivotal role in accelerating the journey to sustainable purchases. However, before identifying the best practices for sustainable procurement, it is essential to understand the importance of ESG criteria in meeting sustainability goals.
The role of ESG criteria in meeting sustainable procurement goals
Although environmental-friendly processes feature right at the top of the list, sustainability is about more than just this. It encompasses all business operations that can be sustained continuously over time — without affecting the ability of future generations to meet their needs. ESG criteria that focus on environmental, social and governance aspects make this possible.
Including these criteria in supply chain management enables businesses to experience the whole gamut of the benefits of sustainable procurement processes. This includes increased cost savings, reduced risk, easier compliance, improved brand reputation and a future-proof procurement strategy.
Practically speaking, here are some examples of sustainable procurement processes that can be integrated into your business’s ESG framework for procurement:
- Identifying comprehensive ESG criteria to implement in the supply chain
- Transparent supplier evaluation and onboarding based on the above criteria
- Aligning ESG goals with procurement goals for improved efficiency
Digitization: The way forward for sustainable procurement processes
For Chief Procurement Officers (CPOs) keen on implementing sustainable procurement best practices today, digitization is an underrated and often overlooked tool. Here is a closer look at how the right technological and digital solutions can quicken the adoption of sustainability in procurement.
It helps capture ESG data
Data is crucial in the shift from conventional to sustainable procurement practices. Digitization makes it easier to capture ESG data across the supply chain. This puts businesses in a better position to use these insights and streamline organizational procurement.
It improves transparency and traceability
Technology also brings greater transparency and visibility across the supply chain. As a result, it becomes easier for your business to trace and track vulnerable areas, so you can quickly address these weaknesses before they adversely impact your ESG goals.
It minimizes resource wastage
Above all, with the use of Artificial Intelligence (AI), it becomes possible to avoid procuring obsolete inventory, facilitate logistical moves that reduce carbon emissions and monitor waste (and minimize) generation in the procurement process.
Make the switch to sustainable procurement
A partner like Moglix can facilitate the right kind of digital transformation in your enterprise procurement journey. Moglix with its comprehensive and end-to-end digitization solutions speeds up your journey towards a more sustainable and ESG goal aligned procurement ecosystem. Know more about this.