Sustainable procurement has become a growing topic. As the Global Sustainable Sourcing Lead at Oatly, Shazia Hussenbux will give us her personal insight on sustainable procurement.
DPW: What does sustainable procurement mean to you?
Hussenbux: Sustainable Procurement is about delivering value beyond the conventional and traditional elements of procurement. While it is often connected to reducing risks, in my opinion, it is rather about creating and amplifying positive impact. Sustainable Procurement creates new opportunities in terms of collaboration with suppliers towards sustainable services, products, and innovation as well as engagement with other industry peers and even, across industries and sectors. While Procurement as a function is part of a larger organism, I see it as an artery with a huge potential to steer the organization towards more sustainable business options and decisions. Sustainable Procurement is therefore a great opportunity to elevate the procurement function, moving away from the cost saving day-in day-out to value creation. There is still however, a strong perception that sustainability adds cost and I see an urgency for those of us who work with sustainable procurement to steer the conversation towards return on investment (ROI) and total cost of ownership (TCO). ROI explains the benefits of sustainable procurement over time and TCO provides the details on the true and underlying cost(s) of a product over its lifetime making them both essential elements of the business case for sustainable procurement. Whilst some companies are more mature in sustainable procurement, many are still scratching the surface of sustainable procurement. In my experience, it means different things to different companies, and I would recommend figuring out which area(s) to prioritize, then set the right ambition level and commit to implementing the necessary activities and actions to get there while keeping a balanced mix of social, environmental, and economic elements. I have made it my personal mission to help position procurement as the influencer within the sphere of corporate sustainability.
DPW: How do you see the role of technology in terms of sustainable procurement?
Hussenbux: Technology provides an opportunity to not only enable, but to advance and empower sustainability, especially sustainable procurement. Leveraging existing technologies, while tapping into emerging tech such as blockchain, IoT, and AI/ML, can significantly accelerate sustainable procurement through real-time data, information transparency and the ability to derive trends and create forecasts with sustainability in mind. A combination of technologies would accelerate sustainable procurement by improving traceability and transparency especially in highly complex supply chains, provide a space for engagement beyond your tier 1 suppliers and, help ease up the manual processes of data collection and management through automation. Personally, I envision a world where you can connect your consumers all the way to the producers. Connecting the actors in the value chain could be the key to empower consumers to make more sustainable choices with validated information while simultaneously, supporting and engaging with your supply chain stakeholders. However, technology alone will not solve all existing challenges and requires collaboration and awareness to overcome the technology-phobia, which is itself a challenge. Another challenge with technology within the sphere of sustainable procurement is that there are too many tools delivering or attempting to deliver on the same outcome whether it is to measure the suppliers’ sustainability performance, manage sustainability risks in the supply chain, or traceability solutions based on new tech like blockchain and/or AI. You end up with segregation of information and risk potential issues with data integration down the line when suppliers and other stakeholders report to or use different platforms. That is why industry, cross-industry and sector dialogue is crucial.
DPW: In your opinion, what will determine the sustainable procurement’s success in the future?
Champion sustainability internally
With internal stakeholders, it is about change management and building a culture where sustainability is part of everyone’s job and routine. A big part of the change management revolves around breaking the myth that sustainability is an added cost through dialogue on ROI and TCO. This can stimulate cross-functional, out of the box, thinking. Identifying early adopters and champions within the function and amongst stakeholders also speeds up the process of adoption and realization. When operationalizing sustainable procurement, it makes a huge difference if your CPO or head of procurement champions these efforts and your colleagues are empowered to be sustainability ambassadors. In my experience as sustainable procurement professional, being part of the procurement team or function is how you can really make the magic happen.
- Leverage multistakeholder, multisectoral and cross-industry partnerships
With external stakeholders, working together with suppliers and identifying shared objectives is a good start. Multistakeholder initiatives should not be underestimated as they are crucial to building a strong knowledgebase. An example is the food industry’s SAI Platform which brings together companies and organizations to drive sustainable agriculture globally, in a pre-competitive way. I dare say that we may already be experiencing a shift, albeit slow, from isolated initiatives by individual companies to multistakeholder, even to some extent, multisectoral or across industry collaboration. This symbiosis is the competitive advantage because it is eventually how you can scale up sustainability in your supply chain.
- Make sustainability part of your sourcing strategy and processes
Only having sustainability as part of your business strategy is not an option any longer. Procurement being the key function for upstream decision making makes it crucial that sustainability is embedded into the sourcing strategy, even down to the category or commodity level. Sustainability elements must be weighed equally as any other traditional procurement deliverables otherwise you risk sustainable procurement being siloed and becoming a ‘nice to have’ rather than an input to your sourcing decisions. In my experience, integrating necessary elements of sustainability into existing sourcing processes at all stages from RFx to SRM, is more efficient than creating an entirely separate sub-process. Sustainability can for instance be integrated into the supplier scorecard or RFQ template and you must identify and define exactly what sustainability means in this case. An example is using the supplier’s sustainability performance rating or sustainability risk assessment.
DPW: Give us one fun fact about you?
Hussenbux: My favorite hobby is console gaming and I love a good role-playing video game.