With the world confronting the consequences of climate change while also suffering from the constraints of resources, procurement needs to focus on more than cutting costs and supplier selection. Procurement professionals have the opportunity to use it as a strategy that can promote sustainable growth while driving innovation and environmental stewardship. They can also use sustainable procurement to drive a circular economy, which is a model in which materials are reused while no waste is eliminated.
According to the Organisation for Economic Co-operation and Development, by 2060, the world’s material consumption is expected to more than double from 79 Gt in 2011 to 167 Gt. Sand, gravel, and limestone are examples of non-metallic minerals that account for almost half of all materials used. Taking this into account, the way we consume, whether products or services, can no longer rely on a take-make-dispose linear system.
With the principles of circular economy incorporated into their procurement practices, buyers can reduce their negative environmental impact, save costs, and foster innovation. These are seven ways sustainable procurement can support circular economy initiatives.
While it’s more convenient to consider a product’s cost first when buying, account for its lifecycle, from its design, manufacturing, usage, and disposal. Procurement teams can require products that are not only durable but also repairable and recyclable, not just for environmental impact but also to save money in the long run.
Requiring recycled or secondary materials in contracts and tenders is one of the best tactics. By doing this, procurement lessens dependency on virgin resources and helps close material cycles.
Using artificial intelligence, big data, and digital twins can be beneficial to design more sustainable, durable, and longer-lasting materials. Other tools, like blockchains, the Internet of Things, and cryptographic anchors, can help in the transparency, optimization, and tracking throughout the value chain.
Companies can give reward points or incentives to consumers who will return their products at the end of their life cycles for proper recycling, reusing, and disassembly. Procurement teams can push for shifting business models like product-as-a-service or leasing equipment instead of selling it.
Procurement professionals must have training and should learn more about circular economy principles. Capacity-building is important in public procurement. Buyers must understand these concepts, too. Engaging in market and supplier dialogues can drive growth and circular benefits.
Incorporate performance-based criteria like reuse goals, end-of-life recovery commitments, and recycled content percentages to make circular buying quantifiable. Clearly define your key performance indicators (KPIs) and keep an eye on them for the duration of the contract.
Lastly, it is important to align procurement strategies, and regional and national circular economy guidelines should support it. Asia-Pacific nations, for instance, are creating cooperative frameworks and standardized standards to promote circularity. By coordinating procurement with these objectives, policy consistency is increased and the argument for sustainable investment is reinforced.
Sustainable procurement can promote the circular economy by influencing and shaping demand and empowering businesses and organizations to lead by example. The circular economy not only eliminates waste and promotes recycling materials but also saves money, drives innovation, and helps companies become integral parts of their communities.