Sourcing Smart: The 5 Biggest ESG and Sustainability Risks in Procurement

🔥👀 Procurement and sourcing managers are crucial in integrating sustainability and Environmental, Social, and Governance (ESG) initiatives into supply chains. However, miscalculations in this area can lead to significant risks. Here are the five biggest risks where procurement or sourcing managers might miscalculate when handling sustainability and ESG initiatives:

👉 1. Inaccurate Supplier Assessment

  • Risk: Many companies rely on third-party audits or supplier self-assessments to measure ESG compliance. However, these reports may be incomplete, biased, or inaccurate.
  • Impact: If procurement managers overestimate a supplier’s commitment to sustainability based on faulty data, they might unintentionally support unethical practices, like labor violations or environmental harm, leading to reputational damage and potential regulatory fines.
  • Solution: Develop rigorous, independent supplier audits and invest in real-time supply chain monitoring.

👉 2. Underestimating the Cost of Sustainability

  • Risk: Sustainable materials or processes often come with higher upfront costs. Procurement managers may underestimate these costs, assuming that sustainability can be achieved without significantly spending more or making tough trade-offs.
  • Impact: This can lead to budget overruns, cost inefficiencies, or even project failure if the sustainability initiatives become financially unsustainable.
  • Solution: Properly forecast and model the long-term cost-benefit analysis of sustainable choices, including potential savings from energy efficiency, waste reduction, and improved brand loyalty.

👉 3. Lack of Supplier Diversification

  • Risk: Reliance on a limited number of suppliers for sustainable products or raw materials can lead to disruptions in the supply chain if these suppliers face challenges such as resource scarcity, regulatory issues, or geopolitical risks.
  • Impact: Reliance on a single source can lead to severe delays, increased costs, or even failure to meet sustainability targets if alternative suppliers cannot be found.
  • Solution: Build a diversified supplier base to meet ESG goals, and create contingency plans for potential supply chain disruptions.

👉 4. Misaligned ESG Priorities

  • Risk: Not aligning ESG goals with the company’s overall strategy or misjudging stakeholder expectations (customers, investors, regulators) can lead to prioritizing the wrong initiatives.
  • Impact: This can result in wasted resources on initiatives that are not in line with the company’s core values or do not meet stakeholder requirements, which can damage the company’s reputation and ESG ratings.
  • Solution: Involve stakeholders early and often to ensure that ESG initiatives are aligned with business objectives and market expectations, appropriately balancing environmental, social, and governance factors.

👉 5. Greenwashing or Overpromising

  • Risk: Overstating the company’s sustainability achievements or underestimating the complexity of achieving real, meaningful ESG outcomes can lead to accusations of “greenwashing.”
  • Impact: This can erode trust among consumers, investors, and regulators, damaging the company’s credibility and exposing it to legal risks.
  • Solution: Be transparent about ESG goals, progress, and challenges. Please ensure measurable and verified data back sustainability claims.

In summary, each of these risks requires careful planning, transparency, and a deep understanding of the sustainability landscape to avoid missteps that can harm both the organization and its broader environmental and social impact.

Written by Gert 

Last time edited: 06.10.2024

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👉 Check it out and follow the BzCall.com platform LinkedIn homepage https://lnkd.in/dZcfbymW

👉 Check it out and follow the BzCall.com platform Facebook homepage https://www.facebook.com/BzCall.auction

⭐ Here’s a quick overview of how easy it is to launch a mini-procurement auction through the BzCall.com platform https://lnkd.in/dWv5Z6BT

What are the main advantages of mini-procurement auctions? 👇👇👇

The real benefits of mini-procurement auctions:

🍓 A good tool to reduce any costs
🍒 Helps to test new vendors (suppliers)
☕ Helps to save working time
👀 Enhanced transparency and competition

👉 What is a Procurement Auction? https://lnkd.in/dj8cYAba

Keywords:

#sourcing #supplychain #oilandgas #purchasing #construction #railways #engineering #3Dprinting 

#shipyard #biotech #automotive #publicprocurement #savings #costcutting #Beverage #apparel 

#Machining #steel #farming #dairy #molding #chemicals #IT #packagind #food

We are open!

Tallinn – 22 September 2023

We are happy to finally announce that our procurement auction web application prototype BzCall.com is ready for use. It is a fully functioning platform, where is possible to reduce costs and expenses via the reverse auction method. Please see a short overview of how it works. A properly prepared procurement auction can reduce costs and expenses by 10-30% or even more. There are no limits on which expenditures can be trimmed or no limits for industries. The service pricing is reasonable, with no hidden fees,  clear, and straightforward. 

Main value propositions using the service

  • Reduction of costs and expenses
  • Sourcers will save working time for other tasks
  • Fair and transparent competition
  • Fewer nepotism appearances
  • Reduction of lead times

Keywords: #sourcing #supplychain #smallbusiness #procurementprofessionals #Construction #Machining #CNC #sourcingandprocurement #procurement #procurementleaders #supplychainmanagement #savings #costcutting

BzCall Technology OÜ 

Last time edited: 22.09.2023

How to Set Up a Procurement Auction

Procurement auctions are a powerful way to source goods and services competitively. They create transparency, increase supplier engagement, and can lead to significant cost savings. This guide walks you through the full setup process, step by step, so you can confidently launch your first procurement auction. Please also watch the demo clip on YouTube.

I Introduction

A procurement auction is a competitive bidding process where suppliers submit offers to provide goods or services. The buyer can evaluate these offers based on price, delivery, quality, or other criteria. Procurement auctions are commonly used to:

  • Drive down costs through competition
  • Ensure fairness and transparency in sourcing
  • Speed up supplier selection

Setting up an auction takes only a few minutes — often no more than the time to write a good RFQ email. With practice, the process becomes even faster, while the savings can range from modest to substantial depending on the scope.

II Prerequisites

Before creating an auction:

  • Register an account as an individual (natural person) or a company (legal entity).
  • Gather all relevant specifications, documents, and supplier contact details.

a) Before making a new procurement auction, please select the correct role, such as a natural or legal person.

b) The new procurement auction tab can be found in the top right corner.

c) You must choose whether your auction is Single or Bundle before proceeding:

Single Auction – For purchasing one item only.

Bundle Auction – For purchasing a group of items together (more than one item).

If you select Bundle Auction, you will upload a single file containing a list of items.
Download example file: upload_template.xlsx

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III Step‑by‑Step Setup

Step 1 – Define the item or service

  • Select auction type: Single or Bundle (This tutorial is made for a Single auction)
  • Select the correct category (e.g., Automotive, Building materials, 3D printing).
  • Enter the required quantity.
  • Choose the appropriate unit of measure (e.g., pieces, kilograms, hours).

Tip: Ensure units and categories match suppliers’ standard practices to avoid confusion.

Step 2 – Configure auction parameters

  • Set the start date and time.
  • Define the auction duration.
  • Adjust extension rules (e.g., extend by 5 minutes if a bid arrives in the last minute).
  • Choose auction priority (time vs. cost focus).
  • Enter a clear, descriptive auction name (e.g., “2025-09 IT Maintenance Services”).
  • Add a detailed auction description, including:
    • Objectives and background
    • Technical requirements or specifications
    • Delivery requirements
    • Evaluation criteria
    • Instructions for bidders
  • Upload relevant supporting documents (specifications, drawings, contract terms). Use clear file names (e.g., Spec_v1.2.pdf).

Best practice: Provide enough detail to reduce bidder questions but avoid overwhelming them with unnecessary information.

Step 3 – Define delivery terms

  • Specify Incoterms (FCA or DAP)
  • Confirm or update the delivery address.

Step 4 – Define billing terms

  • Confirm or update the billing address.

Step 5 – Set visibility and invite vendors

  • Choose anonymity settings:
  • Invite at least two or more qualified suppliers (ideally 3–5+ for competition).
  • Verify that invited suppliers are legitimate and relevant.
  • Add a budget or reserve price (only visible for the auctioneer).
  • Review the auction summary carefully before proceeding.

Last step – Activate the auction

  • Click Finish to launch the auction.
  • Invitation emails are automatically sent to all invited suppliers.
  • Suppliers can submit bids starting from the scheduled time.

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IV Best Practices

  • Invite as many qualified suppliers as possible.
  • Clearly communicate evaluation criteria.
  • Use anonymity strategically to encourage competitive bidding.
  • Allow a Q&A period before the auction starts.
  • Avoid unrealistic timelines — give suppliers enough preparation time.
  • Keep records of all documents and communications.

By following these steps, you’ll be able to set up procurement auctions quickly and effectively, achieving cost savings and fair supplier selection.

Written by Gert 

Last time edited: 02.10.2025

Discover BzCall.com: The Future of Easy-to-Use Procurement Auction Site

As a sourcing manager with years of experience, I’ve always sought an easy-to-use procurement auction site or similar tools (e-auctions or e-procurement sites) to streamline my day-to-day work. The need for such a tool became clear through my various projects. When I couldn’t find a solution on the market, I decided to create one myself, hoping it would help others as well. And so, BzCall.com was born. The main goal? To save on expenditures and free up valuable working time.

Introducing BzCall

  • What is BzCall? The name combines “Business” (abbreviated as Bz) and “Call,” reflecting its purpose: inviting businesses (vendors) to bid on specific jobs. Simple, right?
  • Why Choose BzCall? In today’s competitive business landscape, controlling costs and expenses is crucial—not just for maximizing profits, but for survival. Over the past two decades, I’ve witnessed the ups and downs of the market. You probably have too. Maintaining market share and gaining a competitive edge is essential, especially as product and service life cycles shorten. Complacency is risky; market forces are relentless and can quickly outpace companies that fail to innovate. BzCall.com offers a way to step out of that comfort zone and make procurement auctions by reducing costs by 10-30% (or more with thorough preparation).

Key Benefits of BzCall

  1. Cost Reduction: Significantly cut down expenses.
  2. Reduced Lead Time: Speed up procurement processes.
  3. Vendor Improvement: Encourage vendors to elevate their performance.
  4. Fair Competition: Ensure a transparent and equitable bidding process.
  5. Minimized Nepotism: Reduce favoritism in vendor selection.
  6. Expanded Supplier Pool: Access a broader range of vendors.
  7. Time Savings: Allow sourcing managers to focus on other essential tasks.
  8. Confidence in Deals: Be assured of securing the best market deals.

Who Benefits from BzCall?

  • Sourcing Managers
  • Procurement Managers
  • Buyers
  • Supply Chain Managers
  • Project Managers
  • Small Business Managers and Owners
  • Cost Estimators
  • Technical Engineers
  • NPI Team Members

Summary

BzCall offers an efficient and effective solution to reduce expenditures and save time in procurement processes. Whether you’re a sourcing manager, procurement manager, or small business owner, BzCall is designed to help you thrive in a competitive market.

Discover how BzCall can revolutionize your procurement processes today!

Written by Gert

Last time edited: 11.07.2024

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