Bridging the Gap: 40% of North American Procurement Leaders Still Ignoring Sustainability
Independent research commissioned by Sedex has uncovered a concerning trend among procurement leaders in the US and Canada. This study reveals that a significant proportion continue to overlook and undervalue sustainability factors in their decision-making.
Key findings from our commissioned survey, carried out among 250 senior procurement professionals at companies not currently working with Sedex, include:
- 40% of North American procurement leaders say sustainability criteria isn’t part of their professional decisions.
- A third don’t recognise any benefits associated with sustainable practices.
- Over a third aren’t aware of sustainability legislation that affects their business.
- 50% acknowledge that sustainability remains an afterthought, or isn’t considered at all, for business decisions generally.
These findings contrast with the high volume of sustainability commitments, requirements, claims and reports across industries. For instance, 90% of Russell Group 1000 firms produce annual ESG reports promoting ambitious social and environmental goals[1].
This highlights the gap between company commitments and the day-to-day realities of business operations. Despite continued demands from investors, legislators and consumers for companies to operate more sustainably, these demands evidently remain secondary for many sourcing departments.
Missing the benefits
The study reflects a stubborn view that ESG considerations are incompatible with shorter-term procurement goals such as supply continuity and competitive pricing – seen in 34% of respondents not recognising any benefits of sustainable practices.
This is despite growing evidence linking sustainable practices, supply chain resilience and business success. For example, a recent Forrester-conducted study on the total economic impact of Sedex identified quantifiable benefits of sustainable supply chain management, including a 372% return on investment.
63% of procurement respondents even acknowledged that meeting sustainability targets affects them directly by impacting their performance evaluations or compensation.
Meanwhile, the ever-present threat of regional events disrupting supply chains means detailed visibility is more crucial than ever for sourcing teams to navigate these challenges.
In spite of these benefits, procurement directors who prioritise sustainability are in the minority, with just 28% saying it is central to all decisions.
Overlooking the risks
The study also reveals a concerning lack of awareness among sourcing leaders regarding sustainability legislation.
37% of these procurement professionals admitted to being unaware of sustainability-related laws that affect their business.
This oversight is particularly alarming considering the rise in laws with specific requirements for sustainable sourcing and supply chain due diligence. These can involve damaging consequences for non-compliant businesses, including product seizures and financial penalties.
“These findings are a wake-up call for any business that is serious about its social and environmental performance. Our research underscores the urgent need for executive teams to realign ESG commitments and operational goals, to truly embed sustainable practices in their organisations.
“In doing so, companies can unlock powerful tangible and intangible benefits – including supply chain management efficiencies, more effective ESG risk management and and enhanced reputation that supports long-term, sustainable success.”
Maurizio Capuzzo, Chief Marketing Officer, Sedex
Need support with supply chain sustainability laws? Sedex’s Consulting team can deliver tailored guidance on what to comply with and how.
[1] Source: Governance & Accountability Institute, 2023
Study was carried out in December 2023 with 250 senior procurement professionals in the US and Canada, from companies with an average turnover of more than US $5 billion.
