ESG: The Importance for Procurement in Today’s Business Landscape
The increasing severity of climate change and natural disasters, combined with the economic and lifestyle impacts of the COVID-19 pandemic, have emerged as key factors driving global awareness and shaping business practices.
Today, large organizations worldwide are increasingly integrating Environmental, Social, and Governance (ESG) considerations into their business operations. ESG has become a crucial factor for investors, who believe that companies incorporating ESG into their strategies can enhance competitiveness, reduce business risks, and achieve sustainable growth.
According to the 2021 Global Investor Survey by PwC, which surveyed over 300 investors worldwide, “79% of investors consider ESG factors when analyzing financial data and making investment decisions.” Additionally, 49% of investors plan to divest from companies that fail to adequately address ESG issues.
ESG and Procurement
Sustainable procurement has long been a priority for procurement teams across the globe. Since 2019, a PwC survey found that 72% of 700 companies had incorporated “sustainability development” into their business strategies. By early 2021, a survey on “Sustainability as a Procurement Priority” reported that 39% of B2B buyers (out of 250 surveyed) indicated that improving sustainability is the top priority in their procurement activities for the year.
Clearly, ESG matters not only to investors but also to customers and end-consumers. According to a Smurfit Kappa survey, “61% of customers expect suppliers to follow sustainable procurement policies. If a supplier fails to do so, customers are likely to switch to another provider.”
Furthermore, research by Procurious shows that procurement leaders implementing sustainability policies see increased sales, improved product quality, and better services—often doubling their performance.
For organizations seeking suppliers, buyers, or partners who adhere to ESG principles, the Pantavanij platform offers a solution to identify and collaborate with businesses committed to sustainable practices.
References:
