In recent years, companies have looked to procurement to help meet the targets outlined in sustainability roadmaps, and our previous publications have demonstrated how the procurement function can translate corporate environmental, social, and governance (ESG) ambitions into actionable objectives. We have also shown how the establishment of robust performance monitoring systems that track suppliers’ progress and document tangible results and achievements improves supply chain resilience.
Once these foundational elements are in place, a critical question arises for chief procurement officers (CPOs): How should departmental roles and responsibilities be organized internally to effectively transform ambition into action and efficiently manage the sustainable procurement journey? This process must be executed in seamless collaboration with other contributing functions.
This article explores which teams will need to be upskilled on ESG and the sustainable procurement process, and how to ensure their expertise keeps pace with an ever-changing procurement landscape through regular training.
Three key teams typically involved in sustainable procurement
Our benchmark analysis of leading organizations in sustainable procurement reveals an organization with three primary teams that typically play an active role in tracking and delivering procurement-related ESG objectives:
Transversal ESG department. Positioned at the corporate level, this team is responsible for defining and monitoring the company's overarching sustainability ambitions.
Category managers and buyers. This core team within the procurement department handles all sourcing and supplier management activities.
Sustainable procurement team. Comprised of ESG experts in procurement, this team possesses a deep understanding of procurement challenges and the ability to coordinate with the ESG department. In the absence of a dedicated team, these responsibilities may fall to the procurement excellence team, which oversees processes, tools, methodologies, training, and more. In simpler structures, sustainable procurement activities may also be managed by an informal network of sustainability leaders within the procurement community.
Five core activities that define sustainable procurement
While coordination among these teams is central to the sustainable procurement framework in advanced organizations, the specific scope of responsibilities can vary significantly. We can categorize the various tasks associated with ambitions into five key macro-activities. Notably, overarching activities such as ESG strategy definition and external communication fall within the remit of the transversal ESG department:
- Framing the sustainable procurement framework, aligned with the company’s overall ESG ambitions
- Coordinating sustainable procurement objectives across the organization
- Providing detailed expertise on sustainable procurement and ESG-related considerations for each purchasing category
- Executing sustainable procurement initiatives and ESG-related actions for each purchasing category
- Tracking sustainable procurement objectives and managing ESG-related Key Performance Indicators (KPIs)
Overarching activities such as ESG strategy and external communication fall within the remit of the transversal ESG department (Exhibit 1).
The breakdown of responsibilities among departments is generally consistent across companies for most activities, with the sustainable procurement team (or its equivalent) typically assuming a leading role, based on our observations.
Still, a crucial question remains: Who should possess detailed ESG expertise for purchasing categories? This expertise is essential for translating ESG objectives into actionable procurement strategies for each category, integrating them into traditional purchasing methodologies (particularly concerning costs, quality, and delivery), and staying informed about market innovations and regulatory changes.
Strategies to integrate ESG into procurement roles
Category managers can play a key role as ESG experts by developing expertise tailored to thier specific categories, mastering the nuances of sustainability-related challenges and opportunities. Meanwhile, transversal ESG and sustainable procurement teams can take ownership of broader ESG expertise. In this model, the ESG and sustainable procurement teams assume primary responsibility for ESG expertise, supporting category managers in integrating these considerations into category strategies, challenging suppliers, and addressing sourcing issues.
Nowadays, the most mature procurement functions tend to move the category manager role away from that of a category expert, and more towards one of a strategic and agile problem-solver who can manage and switch purchasing categories on a frequent basis. In a scenario such as this, the second option of transversal ESG and sustainable procurement teams is preferred.
That said, this approach comes with two caveats. First, it may not be readily available for many organizations, as a dedicated sustainable procurement team might not exist. The ESG team may also lack the necessary resources to deeply engage with purchasing considerations. In these cases, a transition phase will be needed to structure sustainable procurement capabilities. In all cases, category managers will have to master a basic first level of ESG knowledge for their purchasing activities, working in close coordination with their company’s true ESG experts.
Diverse training opportunities for upskilling procurement teams
As organizations increasingly recognize the significance of sustainable procurement, a wide array of training programs has emerged to equip procurement teams with essential skills and knowledge. These programs often encompass training for both employees and suppliers, ensuring a holistic approach to sustainable procurement. Below, we explore various types of training programs available.
Master’s programs in sustainable procurement and supply chain management provide in-depth knowledge and a comprehensive understanding of sustainability principles. These programs typically last one to two years and are designed for individuals seeking to advance their careers in procurement with a strong emphasis on sustainability.
Long certification programs, typically lasting from a few days to several months, offer specialized training in sustainable procurement. Some are available for detailed purchasing categories, making them a good option to develop in-depth, “second-level” knowledge on precise matters.
Online training modules offer flexibility and accessibility, with an extensive array of options. These modules often cost less and may even be free. Still, quality content will generally involve some cost.
Mature organizations tend to develop in-house training programs tailored to their specific needs and challenges.
The landscape of training programs available for procurement teams is diverse and adaptable, catering to various needs and levels of expertise. By investing in these training opportunities, procurement departments can enhance their capabilities, ensuring they are well-equipped to engage suppliers effectively and drive sustainability initiatives. As the demand for sustainable practices continues to grow, the importance of upskilling procurement teams cannot be overstated.
Empowering procurement for sustainable success
In conclusion, as organizations strive to align with sustainability objectives, the role of procurement becomes ever more pivotal. By equipping procurement teams with the necessary skills and expertise, companies can effectively translate ESG ambitions into practical strategies that resonate throughout the supply chain.
This not only enhances supplier engagement but also ensures that sustainability initiatives are seamlessly integrated into core procurement processes. As the landscape of sustainable procurement evolves, continuous learning and adaptation will be key to maintaining a competitive edge and achieving long-term sustainability goals.
