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What is sustainable procurement? We also explain the difference with CSR procurement!

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As the social responsibility imposed on companies increases, they are now expected to take ESG (environmental, social, and governance) activity into consideration when procuring raw materials and Service .

The background to this is that social issues such as climate change and human rights have become more apparent and are now receiving more attention.

Corporate procurement processes have recently been attracting attention as a way to contribute to solving these social Issue, and procurement, which has traditionally prioritized efficiency and profitability, is beginning to shift direction to one that is more conscious of social responsibility.

The difference between sustainable procurement and CSR procurement

Procurement that fulfills social responsibility throughout the supply chainSustainable ProcurementandCSR ProcurementAlthough these 2 have similar stances, they have different concepts for what criteria to use when selecting suppliers.
CSR procurement, which became popular in the 2000s, is a procurement process that prioritizes companies fulfilling their corporate social responsibility (CSR) by avoiding risks such as scandals and legal violations that may occur in the supply chain, while aiming to reduce costs and improve corporate reputation. In contrast, sustainable procurement, which has become more widespread in recent years, aims to maintain a society that is not harmful to the global environment and humanity, and is based on the concept of sustainability.

The international standard ISO26000, which provides "guidance on social responsibility" as a guideline for CSR procurement, was published in November 2010, followed by ISO20400, which supplements the guidelines on "sustainable procurement," in November 2017. Looking at this history, we can see that the times are shifting from procurement from a corporate perspective to sustainable procurement.

For Procurement and ESG Departments
Dataseed SAQ
Supplier ESG evaluation digital transformation solution for building a sustainable supply chain
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What sustainable procurement brings and what it entails

The benefits of sustainable sourcing

①【Cost reduction】

It is possible to reduce the cost of raw materials and Energy *¹ by adopting highly recyclable designs and materials, using recycled Energy , etc. In cases where the introduction cost is high, there may be no short-term effect, but in the long term, it will lead to reduced operating costs.

② [Risk avoidance]

Sustainable procurement fosters good relationships with business partners and ensures stable procurement, thereby reducing supply risks such as supply shortages and price hikes caused by resource depletion and geopolitical changes.

Furthermore, if a problem occurs in the supply chain that violates social norms, buyers may be held largely responsible, leading to a decline in corporate value and boycotts. Implementing sustainable procurement can prevent such situations from occurring and contribute to avoiding management risks.

③【Improvement of corporate value】

In ESG investment, which has become mainstream in recent years, companies that take ESG into consideration are highly evaluated and tend to be chosen as investment targets. Consumer awareness of the environment is also increasing. From this perspective, sustainable procurement secures the trust of investors and consumers, leading to improved corporate value and product image.

For Procurement and ESG Departments
Dataseed SAQ
Supplier ESG evaluation digital transformation solution for building a sustainable supply chain
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The Issue of sustainable procurement

Despite its benefits, sustainable procurement also presents Issue.

Issue include a shortage of manpower and personnel with specialized knowledge, as well as the burden of initial costs for introducing IT systems and equipment. Also, depending on the industry and business scale, some companies have complex supply chains, making it difficult to grasp the extent to which sustainable procurement is functioning throughout the entire supply chain.

SAQ, a useful tool for supplier management

Generally, sustainable procurement is carried out by regularly monitoring whether guidelines established based on the company's philosophy are being observed.SAQ (Self Assessment Questionnaire)is a checklist for self-assessment and is a very useful tool that is used by many companies. It helps visualize the status of business partners and supports efficient and comprehensive management of complex suppliers.

The SAQ also serves as evidence for corporate information disclosure and strengthens collaborative relationships by helping to improve and support suppliers based on the results of the survey.

In addition to efficiently collecting data, the SAQ also contributes to ESG management and building relationships with business partners, making it a powerful ally in sustainable procurement.

Zeroboard offers Dataseed SAQ, a cloud Service that streamlines the collection and management of SAQs (Self-Assessment Questionnaires) from buyers to suppliers.

Buyers can design questions and analyze results, while suppliers can Save past responses and check evaluation trends, improving Improved Work Efficiency at the same time. We can also support suppliers in taking action to improve their performance, helping to build sustainable business relationships.

For Procurement and ESG Departments
Dataseed SAQ
Supplier ESG evaluation digital transformation solution for building a sustainable supply chain
View Details