Coeus research amongst more than 200 organisations in the UK & Europe reveals the extent to which sustainability is currently part of their procurement processes and what criteria they’d like to see from suppliers. Our experts also provide recommendations on how to start the process of embedding sustainability within the supply chain - today.
With IT suppliers sometimes making up 35% of a company’s IT spend, procurement is a critical area for IT leaders to make an impact.
Only 13% of the organisations surveyed in the 2022 CIO and IT Leadership Survey indicated that IT sustainability is currently a key element of their procurement process; however 45% of organisations believe this will become a key element in three years’ time.
Over half of respondents (57%) wanted to see suppliers / partners adhere to several criteria in order to work with them: publishing of IT sustainability reports, regular auditing of IT sustainability efforts, a low carbon footprint and sustainable power consumption.
Very few respondents indicated that they would require regulations to ensure IT sustainability is mandated across supplier/partner relationships.
Ignoring or not prioritising sustainability will be problematic for these organisations – it will reflect poorly on them – they need to be seen to be driving the agenda and demanding tangible demonstrable improvements from both existing and future suppliers.
Coeus Recommendations
Coeus’ research clearly indicates that there is an appreciation that IT sustainability will be a key criterion within the procurement process in the future. What is less clear, however, is how organisations will move toward embedding these criteria when selecting, de-selecting or reviewing supplier performance.
Organisations should start the process of embedding sustainability within the supply chain today. Existing agreements with the supply chain should be reviewed to understand what additions may need to be made to include sustainability criteria. Hard measures are required, rather than merely obtaining a regular view of sustainability reports.
Service credit regimes should reflect these measures so that there are clear SLAs applied around sustainability that both penalise under-performance and, critically, reward over-performance.
When drafting RFPs, there should be an explicit area of the RFP that refers to required sustainability targets and their relative weighting when scoring a potential supplier.
SLA targets should be both realistic and present stretch targets that show measurable increases in sustainability across the term of the contract. When implementing and embedding sustainability within the supply chain, it will be important that companies ‘walk the walk’ and are seen to be demonstrating explicitly the behaviours around sustainability that they are demanding from their supply chain.
For example, it would be problematic in the extreme for a company to demand a high percentage of electric vehicles from a supplier if the company itself had few if any vehicles of this type. Overall, it’s clear that those who are proactive in embedding sustainability in their supply chains will be viewed positively, whilst those that treat sustainability as a low priority run the real risk of suffering reputationally.
To view the full CIO and IT Leadership Survey into ‘IT Sustainability’ view here
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