How chief procurement officers are leading the charge on sustainability

With the dust settling on key international negotiations at the United Nations Climate Change Conference (COP29) and Biodiversity Conference (COP16), it has never been clearer that businesses need to lead the charge on implementing innovative solutions to promote greener production and consumption models that protect our climate and environment. Procurement can play a critical role in this mission, thanks to its position spanning operations and supply chains.

In short, the role of chief procurement officers (CPOs) has gone far beyond the traditional “better, cheaper, faster” job description. Green procurement, which once felt aspirational, is now a key lever to achieve global climate and environmental goals. Today’s CPOs must step up to drive the systemic transformation needed to build green and resilient supply chains and secure a more sustainable future.

But what are the implications of these changes, and how do CPOs themselves view procurement’s part in embedding sustainability within organizations and supply chains? This was the focal point of discussions at Procure Innovation Dialogues 2024, co-hosted by the World Economic Forum and Sustainable Procurement Pledge (SPP), and in a series of one-on-one interviews carried out as part of the Unlocking Green Procurement partnership between the Forum and Kearney.

These discussions revealed key strategies that CPOs will need to adopt if they are to provide the multi-dimensional leadership required for green procurement to become a reality: building a solid business case for sustainability, and playing “high,” “wide” and “long” to elevate procurement’s role in the transition.

While sustainability is often treated as an ethical imperative, switching the focus from ambition to practical execution relies on first having a viable business case. The CPOs we heard from were clear that green procurement can drive financial performance. By building resilient operations, optimizing supply chains and improving resource efficiency, they are proving not only that green initiatives don’t have to challenge profitability, they can even improve long-term stability and growth.

Companies at the Procure Innovation Dialogues highlighted the importance of a strong partnership between the procurement and finance functions, with decisions based on balancing sustainability goals with business objectives. This has enabled the company to make informed trade-offs between cost efficiency and long-term sustainability. Others stressed that the business case rests on sustainable products. By developing greener alternatives like recyclable wind turbine blades and cleaner air insulation technologies, sustainability is directly entrenched in its value proposition and supply chain.

Elsewhere, real-life examples of significant cost savings gained via sustainable procurement initiatives include reducing energy consumption, streamlining logistics networks and improving waste management practices. By aligning financial and sustainability objectives, CPOs are demonstrating that profitability and corporate responsibility can coexist, reinforcing the strategic value of procurement being in the sustainability driving seat.

Bertrand Conqueret from Henkel stated: “Procurement is leading sustainability into the upstream part of the value chain. No one else is doing it. It’s us.”

For procurement to assume that leadership role, it must become a corporate priority - championed by the C-suite and a staple of discussions at the boardroom table. Sustainability initiatives will struggle to get off the ground, let alone land the business case, without executive buy-in, and CPOs are becoming the advocates who secure that engagement.

Thomas Udesen, CPO, Bayer, noted: “A lot of boards, a lot of CEOs… they get it. It is a priority.”

However, for procurement to drive sustainability at this level, data-driven arguments and the ability to articulate its value beyond mere compliance – emphasizing resilience, risk mitigation and brand impact – are also required. Several CPOs described how they use data and metrics to make the case for sustainable procurement. At Thermo Fisher Scientific, aligning sustainability with customer expectations has helped secure internal support, for example.

Craig Reed, Vice President Global Procurement and CPO, Thermo Fisher Scientific, said: “We’re a very customer-focused company. The behaviours that we’re executing to meet our clients’ expectations have also influenced the commitment from our executive team.”

Lauren Richardson, CPO, Colgate-Palmolive, remarked: “The only way to learn from other functions is by connecting with people. It’s not about telling someone how you’ve done something and expecting them to follow. It’s about understanding how they do their job, what makes them successful, and finding ways to collaborate by integrating my capabilities with theirs.”

If CPOs and their teams are to play a central role in implementing their company’s sustainability strategy along with Chief Sustainability Officers, procurement must expand its influence beyond its traditional remit. This means closely collaborating with other functional areas, such as product design, marketing and HR. Green procurement is not a one-department effort; it requires a coordinated approach that engages every corner of the organization and supply chain. At Thermo Fisher Scientific, sustainability and regulatory teams have been embedded into procurement via a project management office structure to ensure that policy changes are addressed across all business areas.

Transparency is also key. Sharing sustainability metrics with other departments and suppliers will help break down institutional barriers and silos, fostering a culture where everyone is working towards a common goal.

Oliver Bischof, CPO, Siemens Gamesa, observed: “To make sustainability mainstream, it’s crucial to bring our suppliers along. We need to work closely, not just to innovate but to industrialize these innovations, making sustainable practices the new norm across our supply chain.”

Creating a truly sustainable future is about thinking beyond immediate wins to ensure lasting impact. As such, CPOs also have a responsibility to lay the groundwork for future leaders by creating a culture that prioritizes resilience, creativity and systemic change, and instilling values that will guide those who follow in their footsteps as they navigate ongoing sustainability challenges.

Craig Reed said: “If I can leave a solid foundation that’s grounded in sustainability, the regulatory side of it, the social side of it… then I've done my part.”

Thomas Udesen, concurred: “The legacy that all of the current CPOs can and should leave is making those first foundational steps –creating a culture where collaboration, innovation, and sustainability become a natural part of decision-making.”

Our discussions with CPOs reveal that their role is already expanding to assume organizational leadership for sustainability. It’s a path that hasn’t been travelled before: today’s procurement leaders are breaking new ground. We already know that collaboration inside organizations and across supply chains will be key to making the transition successfully. However, as CPOs develop new approaches, skills and capabilities, sharing experiences, best practices and pre-competitive insights will be equally important.

As one participant noted: “Little bits of success create ambition for larger bits of success.” CPOs should continue to come together, learn from each other, and leverage their collective influence in the pursuit of sustainability across industries and geographies. By focusing on the business case for sustainability and playing high, wide and long, they can turn procurement into a powerful force for lasting, systemic change.