CPO Crunch: It’s not easy being green

David Rae

Delivering on ESG requires system-level changes. Is your function up to the challenge?

If you live in the UK or keep on top of the British news agenda, you may have seen a story over the past few days concerning a political party announcing a U-turn on its signature green investment policy.

What was said? Sir Keir Starmer, leader of opposition Labour party, announced that its flagship £28bn/year green investment pledge would be reduced to £15bn/year, of which only £5bn would be new money. The reasoning Starmer gave was the current economic climate and, specifically, the increased cost of borrowing would make servicing any additional debt unpalatable and politically challenging.

The message was clear – net-zero ambitions are expensive, and we no longer live in an age of cheap cash.

The announcement was headline-grabbing, for sure, with news outlets either outraged or sympathetic depending on their political leanings, but I believe it was consistent with many conversations taking place in boardrooms around the world.

Over the years, the Procurement Leaders community has had many conversations about how to make progress on sustainable goals and whether that comes with a significant cost. More often than not, the argument has been that progress in sustainability is not cost-prohibitive and, in reality, it can be cost-neutral – or even cost-positive – if tackled in the right way.

To a degree, this makes sense – using fewer materials or reducing energy consumption are obvious win-wins in the sustainability battle, but they are also the low-hanging fruit. More difficult is the type of system-level change required to catapult us towards the future net-zero goals we have set, whether with the Science Based Targets initiative (SBTi) or elsewhere.

System-level change takes vision, ambition, and ingenuity. It also takes commitment, a long-term perspective and investment. I wonder how many CPOs can say that they possess enough of each to meet the goals that they and their organisations have committed to.

Speed up on sustainability

A message I received from a recently retired CPO, who challenged us on our use of the name “glide path” when it comes to our 2030 product theme, caused pause for thought this week. “Gliding towards something takes more time than we have,” he wrote. “It would be good to put some emphasis behind pace – I think procurement is not driving hard enough because we are waiting for permission.”

Influence a key requirement

Our Risk and Sustainability Cohort gathered last week to explore the skills that procurement must develop to deliver on the ESG agenda, with around around 130 sustainable-procurement leaders in attendance. While knowledge of the regulatory landscape and product-specific ESG issues came up, the biggest requirement was for softer skills, including being able to influence without authority and stakeholder management. Dare I say it, one of procurement’s areas of strength?

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