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The role of procurement in the energy transition

Five steps to make your procurement strategy energy transition ready

20211020 The role of procurement in the energy transition 200x283p

The world is entering a decade of transformation. A decade in which the pace of the energy transition will be set. These global transformations bring immense challenges and opportunities. Companies will need confidence to make the right decisions about complex systems and solutions and sustainability is set to be at the heart of many of these decisions. For a business looking to improve sustainability, procurement and the supply chain should be one of the first areas to focus on. Our new paper explores the benefits of sustainable procurement and outlines a five-step plan to help you meet targets and unlock new value across your organization.

1. Evaluate your processes
Once you’ve decided to implement a new or updated procurement initiative, the first step is to evaluate your existing processes. At this stage it may help to involve other key decision-makers within your organization. Senior leadership as well as sales teams can bring valuable market perspective. Ensuring the wider business is aligned with any new plans will also make implementation of new initiatives easier.

2. Develop your green procurement strategy
Your green procurement strategy should have environmental impact at its core. A one-size-fits-all approach will never work. Only you will have a clear idea of your organization’s priorities and needs. It’s vital that any new approaches meet your broader goals, rather than trying to reinvent the wheel.

3. Work with like-minded partners
Once you’ve evaluated your process and defined your strategy you can begin to review your current partners against it. Do your existing partners still fit your needs and do their values align with your goals? If you don’t already work with a partner scorecard, now is the time to create one. Not only does a scorecard help you to compare and rate partners, it also helps you to identify the gaps in your knowledge about your current partners. One of the most important elements to consider with any partner is their risk profile, can you trust their credentials? Unlike traditional criteria, such as cost, the fall-out from working with a partner whose green credentials don’t stand up to scrutiny can have far-reaching consequences beyond financial losses.

4. Assess tender responses based on added value
It’s crucial that you assess tender responses based on the added value the partner, relationship or project would bring to your business. While cost is important, it shouldn’t be the only factor used when assessing long-term value or return on investment. The short-term lower cost of a project may be overshadowed by much higher environmental or economic costs over the project lifetime or beyond.

5. Measure performance
A final step is to evaluate the performance of the partner with a focus on consistency, quality, delivery, timing, and budget. These measures can also be added as factors in the scorecard mentioned in step three.

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