Your procurement practices and supply chain management are the engines of your business, so it’s important you understand the risks and opportunities. We’ve spoken to three members that target sustainability by focusing on their greatest impacts.
Broken up into three parts, this story focusses on the vital areas of procurement, business models and integrated strategy. The members we’ve spoken to are a cross section of industry and size, highlighting the importance and simplicity of measuring your business’ social and environmental impact.
Typically, and particularly for smaller businesses, procurement is seen as a low-cost activity, however by focusing exclusively on cost you may be forgoing the opportunity to create greater value by leveraging the impact through your suppliers. Auckland’s Mt Eden Village Centre is one organisation that tracks the sustainability of its supply chain – awarding contracts to local businesses that meet its standards.
Judith Holtebrinck, manager of the Mt Eden Village Centre, says working with local businesses to reach a goal of zero waste has been critical to the community centre. “If hirers ask me for a catering business or café, we recommend the ones committed to offering free range eggs, fair trade coffee and those that are part of our zero waste initiatives.”
The impact of this transaction is well beyond the cost of the catering. By supporting free range, fair trade suppliers, you are supporting reduced ecological impacts, better pay for workers, often healthier food for your guests, the list of benefits goes on.
Sustainable procurement practices aren’t limited to the food and events industry, as you’ll see in the Sustainable Business Network’s Circular Economy Model Office guide and our Smart Procurement Solutions work to create a simple, easy to use guide to assess any supplier on their sustainability credentials*.
Sustainable procurement doesn’t need to be limited to large organisations, as you can see with Mt Eden Village Centre, and also a critical part to succeeding with your procurement aims is working actively with your suppliers to improve practices that don’t fit in with your sustainability policy. This means explaining to caterers why you want to support those that use free range eggs for example, and giving them the opportunity to change their practices, rather than just rejecting them as suppliers straight away.
A great way to future proof your business around sustainability is to understand where you can have the greatest impact, and develop a business model based around optimising impact. A business that empathises this is Bay of Plenty’s Vincent House, which stresses the social impact of its operations.
Putting people at its core, Vincent House encourages people struggling with mental health into work, alongside offering them training and work experience.
Vincent House occupational therapist Janie de Malmanche says, “A big part of what we do is having a really strong employment pathway and so we have a social enterprise as our work centre – which is a massive factory – where our residents do a four week work experience programme and then go into casual work for the factory”.
However, to have a truly sustainable business you need to take into account all of your impacts. Vincent House does this well targeting the triple bottom line by focusing on people (employee welfare, such as mental health and building confidence and experience), the environment (producing product using recycled materials) and maximising profit (selling products created in the Vincent House factory).
“Our Mill Recovery Project is where timbers are sourced from mills, timbers that would usually be thrown away. We turn them into the stakes for real estate agent signs and survey pegs. They craft them into pegs, paint them, and sell them to estate agents and surveyors,” says Janie.
The biggest pothole many companies face is employee buy-in. Wanting a sustainable business and having one from the top down are two different things. Integrating sustainability into your business model and encouraging employee buy-in is essential.
Zealandia’s employee buy-in expert and communications manager Cameron Hayes says that the key is making it fun and accessible for employees.
“If you can foster an organisational culture that champions sustainability then results will follow. We have regular sustainability meetings, chaired by the staff in charge of driving initiatives in their areas. We also bring in external organisations such as Qualmark, carboNZero and Conscious Consumers to assess our results.”
“As a non-profit organisation staff and volunteers are often under pressure with workloads, so it’s a huge credit to the team for taking on these extra initiatives outside of their core duties.”
Integrating strategy also means having the flexibility to develop that strategy and grow it alongside organisational growth.
“As our organisation has grown, it’s had to widen its focus to include sustainable goals and initiatives in not just conservation activities, but general business operation too. Working with organisations such as SBN we’ve been able to identify and achieve new goals in other areas such as our café, exhibition, and visitor centre.”
So as you can see, there are huge opportunities for small businesses to create value for their organisation but focusing their limited energy on where they can get the greatest return. Have you identified what aspect of your operations you’re going to focus on?
* This tool is currently in the prototyping phase so for more information, or if you’d like to test this in your own supply chain email Julia Jackson, SBN’s Transformation Leader – Community, at Julia@Sustainable.org.nz.