When procurement and sustainability work together, ESG can go from compliance to strategic tool. This is according to Stratsys ESG experts Cecilia Almér and Anna Lindstedt. With a well-thought-out collaboration model, ESG work can be both effective and value-creating. At the same time as your organization takes an important step towards sustainable business development.
Many companies have put a lot of focus on CSRD in the past year. But this is only the tip of the iceberg. There are a range of other regulations that also affect the purchasing organization. Examples of these regulations include:
- CSDDD: Corporate Sustainability Due Diligence Directive)
- REACH: Registration, Evaluation, Authorization and Restriction of Chemicals
- CBAM: Carbon Border Adjustment Mechanism
- EUDR: EU Deforestation Regulation
- FLR: Forced Labor Regulation (proposal)
These place increased demands on being able to identify risks in the supply chain, both at supplier and product level.
Navigating these regulations is not just a matter of compliance. It is about balancing external requirements with internal resources. Time, skills and money are limited. The purchasing function must therefore work smart.
Working smart may sound obvious. But what does it mean in practice? There is a proven model to help turn words into reality, according to Anna Lindstedt, ESG expert at Stratsys.
Risk-Based Model to Prioritize Correctly
The key, according to Anna Lindstedt, is to work according to a risk-based model, which is also a legal requirement.
- I usually describe the model as a funnel. It helps us identify which suppliers require more follow-up, so that efforts are put in the right place. If the risk is low, we can proceed without further action. If the risk is too high, we should not cooperate. In the middle are those with some risk, which we need to investigate further, she says.
The model fits well with the way the legislation is structured. The expectation is that companies should be able to show that they work methodically and risk-based in their due diligence process. This is where smart system support can help a lot. Many steps in the model can be automated, while others require manual input such as supplier audits or action plans.
Procurement Needs to Own the Process
A key success factor is to integrate risk assessment directly into the procurement process, not as a separate track. This is not to say that the sustainability function should be left out. Quite the contrary. Effective collaboration requires clear responsibilities and common understanding.
- The sustainability team often has the deep knowledge of risks and what actions are effective. It is therefore crucial that there is a structure for how the departments work together, she says.
Anna Lindstedt, ESG Supply Chain Lead at Stratsys
The Role of Sustainability - for Strategy, Data and long-term Thinking
Cecilia Almér is ESG Lead at Stratsys. She emphasizes the strategic dimension of sustainability work. Due diligence is not just about compliance. It is a tool to strengthen the company's resilience, to increase transparency and trust with stakeholders.
- Make sure to link data from the sourcing stage to the ESG strategies. Then you can use it both for sustainability reporting and to drive your business forward. It is important to see the connections, she says.
Cecilia emphasizes the importance of understanding why the collaboration with purchasing is crucial.
- We need to know what we need, where we need each other's support and when to collaborate. This requires a clear collaboration strategy. It's about building a common structure for data collection, monitoring and reporting. A structure where both parties understand their role.
Cecilia Almér, ESG Lead at Stratsys
Cross-Functional Collaboration between Procurement and Sustainability
For the collaboration to be effective, concrete contact points are needed. Cecilia Almér points out the importance of defining responsibilities, for example that the Purchasing department is the front line for supplier engagement and data collection, while the Sustainability department keeps track of frameworks, ESG criteria and what information is important for further reporting.
Successful collaboration requires an established collaboration strategy with a feedback loop to refine the process.
- What we measure, we can manage. This allows us to see where we stand, not only in the present but in relation to our goals and risks. It gives us the basis to plan ahead, make informed decisions and take the right actions. It also helps us to plan and to act strategically, to follow up over time and to create real change, both in our own processes and in the supply chain, says Cecilia.
Three Steps to Success
In conclusion, Anna Lindstedt emphasizes the importance of approaching the issue methodically. Make sure you have a concrete plan to tackle the challenge in a thoughtful and effective way:
- Map the regulations. What laws and directives affect our business?
- Do a gap analysis. What do we have today, in terms of processes, resources, skills? And what is missing?
- Set a concrete plan. How will we ensure compliance? How should the collaboration between sustainability and procurement be structured?
From Regulatory Pressure to Strategic Collaboration
As sustainability requirements become more numerous, more stringent and more business-critical, the pressure on companies to act in a structured and risk-based way increases. Especially in the supply chain. But no department can do this alone. Only when procurement and sustainability work as a united team, with common processes, shared systems support and clear responsibilities, can ESG efforts have a real impact.
By integrating sustainability requirements into purchasing decisions and using supply chain data as a strategic resource, companies can both ensure compliance and create long-term business value. Digital system support plays an important role here. With the right tools, it becomes possible to monitor risks, collect supplier data, set targets and facilitate reporting.
Stratsys is an excellent example of this. We have extensive experience in supporting organizations in connecting sustainability strategy with operational reality and creating a common platform for cross-departmental collaboration. Because collaboration is not just an efficiency booster. It is a prerequisite for success in the new reality.
- If you really want to succeed, make sure that collaboration between procurement and sustainability doesn't just exist on paper, but works in practice. It is a key to success, says Anna.
Want to know more about how your organization can integrate sustainability into the procurement process? Stratsys has extensive experience in supporting organizations in ESG work. Read more about our ESG offering
