Sustainable Procurement goes beyond simply buying “green” products; it requires a holistic approach that considers the lifecycle of goods and services, the ethical practices of suppliers, and the long-term impact on communities and ecosystems.

The ISO 20400 norm published in 2017 defines Sustainable Procurement as:
“Procurement that has the most positive environmental, social and economic impacts possible across the entire life cycle and that strives to minimize adverse impacts”.

This article breaks down how to structure sustainability priorities based on three pillars, environment, social, compliance and gives concrete actions on how to get organized.

This focuses on minimizing the environmental footprint of procurement activities. It includes reducing greenhouse gas emissions, conserving resources (water, energy, raw materials), minimizing waste and pollution, and promoting circular economy principles. Examples include sourcing products with recycled content, choosing suppliers who use renewable energy, buying renewable energy oneself, and collaborating with suppliers to reduce emissions.

The mammoth environmental priority remains decarbonization, more specifically of Scope 3 upstream emissions. These are all the indirect emissions that come from purchased goods and services. For example, when buying raw materials, it could be the emissions from extraction and logistics. For services, it can be emissions from the service provider having to commute on-site.

Considering that in some companies, Scope 3 can represent upwards of 90% of total emissions, the climate transition is simply not possible without addressing Scope 3.

1. Begin by understanding your procurement carbon footprint. Segment categories and focus on hot spots. You can use spend-based emission factors at the start just to get a baseline before fine-tuning with more accurate quantity-based emissions or product carbon footprint.
2. Use system data first and identity gaps you have internally in your own data.
3. Upskill buyers so they have a good awareness of what decarbonization is, what it means for their category, and how to talk to suppliers about it
4. Introduce carbon controls in the Procurement process, for example collect supplier carbon information in an RFP.
5. Understand the maturity of your suppliers using internal questionnaires or external providers like Ecovadis or CDP
6. Collect carbon data from suppliers, for example LCA data or more insights in their own emissions
7. Implement decarbonization action plans with highest emitting suppliers
8. Having a tool is optional but for big companies with many suppliers and data to collect, a tool can help accelerate things
9. Continue working with your suppliers, buyers and internal stakeholders to continuously improve

This addresses the social impact of procurement decisions, ensuring fair labor practices, human rights, and community well-being. It involves issues like fair wages, safe working conditions, ethical sourcing (e.g., conflict-free minerals), and promoting diversity and inclusion within the supply chain.

A topic we’ve seen rise in importance is supplier diversity. As there is no universal definition of what a “diverse” supplier is, companies usually adapt to national laws. A common gray area is if a company that employs individuals from underrepresented groups is considered a diverse supplier or not – in France for example there are inclusive enterprises which enjoy a specific status. Some companies might also even include small businesses in their definition. Nonetheless, what seems to be the most universal definition is that of the Harvard Business Review: A diverse business is one which is 51% or more owned, managed and controlled by members of underrepresented groups in the country in which they operate. The concept of owned, managed and controlled is important as it ensures that the distribution of wealth is indeed going to underrepresented groups. Think of a cleaning company, they may employ mainly women coming from immigration, as this is a low barrier entry job that allows access to employment, but it is not necessarily distributing wealth amongst this group.

1. Agree on a definition, it does not need to be universal across the whole company but can be adapted locally
2. Designate a dedicate program manager – they do not have to be FTE on the topic of supplier diversity, but it should be clearly part of their mandate.
3. Implement a policy and action plan. For example, requiring that one diverse supplier must be included in every RFP or RFI, if available.
4. Set targets and monitor performance. Tools like Ecovadis and SupplierIO can help with this.
5. Make it easy for suppliers to self-register as diverse and make it known that you want to do business with them.

Sustainable Procurement goes beyond compliance, but nonetheless Procurement is directly concerned with the growing tsunami of sustainability reporting requirements.Accelerated in 2020 with the EU Green Deal, Procurement organisations are key contributors and guarantors of various regulation. This includes disclosure requirements, such as the EU Corporate Sustainability Reporting Directive (CSRD), but also the EU’s Carbon Border Adjustment Mechanism (CBAM), the EU Deforestation Regulation (EUDR), the EU Packaging and Packaging Waste Regulation (PPWR) and the hotly debated EU Corporate Sustainability Due Diligence Directive (CSDDD). What all these regulations have in common is a focus on value chain and requirements to have transparency, visibility, controls and data from suppliers that are tier 1 and beyond.

The CSRD was the focus for most organisations in 2024 with the first reports being published in 2025. The CSRD is a corporate reporting obligation part of the EU Green Deal that requires companies to disclose non-financial information in a standard way. It is built upon European Sustainability Reporting Standards (ESRS) that define what companies will need to report on.  Procurement is a key contributor to the CSRD, not only is the concept of value chain integrated in every ESRS, but there are also at least two ESRS – S2 Workers in the Value Chain and G1 Business Conduct – that directly involve Procurement.

To deep dive further into what is expected from Procurement for the CSRD, you can read our previous article on the topic here.

Implementing effective sustainable procurement requires a structured approach:

1. Develop a Sustainable Procurement Policy: This policy should clearly define the organization’s commitment to sustainability and outline the principles that will guide procurement decisions. You see examples from Alstom, Worldline, and Michelin.
2. Set Sustainability targets for Procurement: If your organization has set an overall sustainability strategy, then Procurement objectives should be aligned. Procurement sustainability objectives can be for example a % or € spend with diverse suppliers, a reduction in Scope 3 emissions, an increase in number of suppliers assessed by an ESG assessment tool. Ideally, these targets are then reflected in individual buyer performance targets.
3. Conduct an ESG risk and maturity assessment of suppliers: Understand where your suppliers are in terms of ESG maturity, for this companies use tools like internal questionnaires or base their suppliers on external factors like if they have completed CDP or if they have SBTI targets. Procurement should also identify key sustainability risks and opportunities within the supply chain using internal tools or market tools like Sedex, Ecovadis, Prewave, etc. This may involve mapping the supply chain, conducting supplier surveys, and analyzing spend data.
4. Integrate Sustainability into Procurement Processes: Incorporate sustainability criteria into supplier selection, contract negotiations, and performance evaluations. This may involve giving ESG criteria a weight of 10% in RFP decisions or including sustainability clauses in contracts.
5. Engage and train buyers: Buyers should have a good level of understanding of what sustainability risks and opportunities are and how this translates into the categories and suppliers that they manage. Buyers should also understand what levers they have at their disposal (switching to renewable energy, material changes, buying circular…) to engage with suppliers.
6. Engage with Suppliers: Communicate the organization’s sustainability expectations to suppliers and work collaboratively to improve their performance. This may involve organizing a webinar on sustainability, sharing resources on best practices, explaining data collection needs, and offering incentives for sustainable practices.
7. Track and Monitor Performance: Regularly track and monitor progress towards sustainability goals. Data collection is critical for this step. While some metrics (for example % of suppliers having an ESG assessment) are easy to track, others, such as absolute reduction in Scope 3 emissions, are much harder to track as data is often lacking or incomplete. Procurement organizations can be supported by tools that ease the data collection burden and bring standardization to how performance is monitored.
8. Communicate and Engage: Finally, make sustainable procurement efforts known to stakeholders, including employees, customers, investors, suppliers, and communities. Communicate not only on what has been done, but also the benefits that it has brought in terms of saving, better lead times, quality or market differentiation.

How does this translate concretely in real life? Many leading companies are already making significant strides in sustainable procurement. In the VDA Procurement Community of TOLSON, we’ve heard from leading organizations like Pernod Ricard, Accor, Aptar, Michelin, CBRE, Imerys and others on how they are implementing actions and leveraging sustainable procurement as a value enabler.

Sustainable Procurement has moved beyond compliance and risk mitigation, it’s a prerequisite to doing business. Just like you are requiring more sustainability from your suppliers, the same can be said about your clients. The old adage that sustainability costs more is not necessarily true, in many cases it can be a competitive advantage and can lead to more business. In other cases, sustainable procurement can actually deliver savings: decreasing water and electricity consumption, less purchases of new or virgin material through circular practices, reducing logistics costs. And finally, it can be a real power of attraction for procurement teams. In short, today sustainable procurement is a strategic lever for driving innovation, optimizing costs, onboarding teams and building a more resilient and responsible supply chain.