Sourcing/Procurement Trends
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German Firms Seen Missing out on Significant Opportunities in Green Procurement
Less than a third of companies in the country currently actively engaged in sustainable procurement, BrainNet survey finds; most companies still reactive, lack green strategy
Bonn, Germany — August 25, 2008 — German companies have a lot of catching up to do regarding sustainable procurement, with less than a third of companies in the country currently actively engaged in so-called "green procurement," according to a recent study by supply chain management consultancy BrainNet.
German organizations still view "green" with some skepticism and, as a result, are missing out on significant opportunities since sustainable procurement practices offer not just ecological benefits but also economic benefits, the consultancy reports.
Generally, green procurement means the responsibility of procurement for compliance with ecological but also ethical standards in the entire supply chain and over the entire product life cycle from manufacturing, via transportation and processing, to disposal and recycling.
"More than half of all processes between businesses and their social, ecological and economic environment are related to procurement," says Simone Luibl, coordinator of the survey and practice head of green procurement at BrainNet. "Therefore it is only consistent if a stronger environmental orientation is already in place in procurement."
BrainNet believes that the price of goods or services is increasingly being influenced by ecological factors and that an attitude that is not "environmentally friendly" can have serious consequences for a company's image and economic clout. Companies that do not attach enough importance to the ecological use of resources risk having a significant strategic disadvantage compared with the competition, the consultancy asserts.
New Criteria for Procurement Decisions
As a rule, procurement decisions are made based on criteria such as product, quality, coordination and risk costs. A purchase that is undertaken in line with the principles of green procurement also takes greater account of the costs of the environmental pollution and damage caused by production, supplying and processing of goods.
German organizations still view "green" with some skepticism and, as a result, are missing out on significant opportunities since sustainable procurement practices offer not just ecological benefits but also economic benefits, the consultancy reports.
Generally, green procurement means the responsibility of procurement for compliance with ecological but also ethical standards in the entire supply chain and over the entire product life cycle from manufacturing, via transportation and processing, to disposal and recycling.
"More than half of all processes between businesses and their social, ecological and economic environment are related to procurement," says Simone Luibl, coordinator of the survey and practice head of green procurement at BrainNet. "Therefore it is only consistent if a stronger environmental orientation is already in place in procurement."
BrainNet believes that the price of goods or services is increasingly being influenced by ecological factors and that an attitude that is not "environmentally friendly" can have serious consequences for a company's image and economic clout. Companies that do not attach enough importance to the ecological use of resources risk having a significant strategic disadvantage compared with the competition, the consultancy asserts.
New Criteria for Procurement Decisions
As a rule, procurement decisions are made based on criteria such as product, quality, coordination and risk costs. A purchase that is undertaken in line with the principles of green procurement also takes greater account of the costs of the environmental pollution and damage caused by production, supplying and processing of goods.
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