Can procurement auctions help fight against greenwashing?

🔥👀 In recent years, greenwashing has received considerable attention in the field of sustainability and responsible sourcing. Greenwashing is the deception of presenting a company, product, or activity as more environmentally friendly than it is. It often involves misleading marketing or communication that exaggerates the environmental benefits of a product or service, leading consumers or stakeholders to make decisions based on false or incomplete information.

In the context of procurement, the use of greenwashing can be particularly problematic. Companies may claim to prioritize sustainability in their supply chain practices, but in practice, their procurement activities may not be in line with their stated commitments. This can have serious consequences not only for the environment but also for a company’s reputation and profits.

To avoid greenwashing in procurement activities, it is important to pay attention to several key aspects and implement robust processes to ensure transparency and accountability. In this story, we highlight three important aspects that should be taken into account and discuss how procurement auctions can play an important role in this work.

⭐ 1. Transparency and Traceability: Transparency and traceability are key aspects of responsible procurement. The entire supply chain must be visible, from the sourcing of raw materials to the delivery of the final product. This includes understanding the environmental impact of each stage of the supply chain and ensuring that suppliers follow sustainable practices.

Procurement auctions can contribute to transparency by providing a range of criteria, including sustainability indicators. Through auctions, buyers can specify their sustainability requirements, such as using environmentally friendly materials or compliance with specific environmental standards.

⭐ 2. Verification and Certification: Verification and certification play an important role in ensuring that suppliers meet the sustainability standards set by buyers. This includes assessing suppliers’ compliance with environmental regulations, certifications, and industry standards for responsible sourcing.

Procurement auctions can integrate verification and certification processes into their auctions by requiring suppliers to provide documentation or proof of compliance with relevant standards. This ensures that only suppliers with verified sustainable practices are eligible to compete, reducing the risk of greenwashing.

⭐ 3. Performance Monitoring and Reporting: Ongoing monitoring and reporting of supplier performance is essential to detect and address greenwashing in procurement. This includes tracking key sustainability performance indicators such as carbon emissions, waste generation, and energy consumption, and holding suppliers accountable to pre-defined targets.

Procurement auctions can set performance target requirements for suppliers, and they are required to report regularly on their progress toward these targets after winning the bidding. 

Summary: In conclusion, avoiding greenwashing in procurement requires a multi-faceted approach that includes transparency, verification, performance monitoring, stakeholder engagement, and ethical considerations. Procurement auctions can be a valuable tool to achieve this goal, as they offer a transparent and competitive market where sustainability criteria are integrated into the procurement process. 

Keywords: #sourcing #supplychain #procurement #greenwashing #sustainability

Written by Gert 

Last time edited: 25.02.2024

Did you know that there are hidden risks in the prices of products and services in long-term contracts?

Did you know that there are hidden risks in the prices of products and services in long-term contracts? Let’s look at the five main risk moments:

1. Cost Inefficiency

👉 The first main risk is cost inefficiency. Without constant or regular price comparison, your organization may be overpaying for goods and services. Prices in the market can fluctuate due to economic changes, industry developments, and competition. If you’re locked into a long-term agreement with fixed prices, you may miss out on cost-saving opportunities. Regular benchmarking helps identify cost inefficiencies and renegotiate agreements when needed.

2. Market Changes 

👉 The second main risk is market changes. Markets are dynamic, and prices for products and services can change significantly over time. Long-term agreements might have been negotiated at a favorable rate initially, but market conditions can shift. If you don’t keep tabs on these changes, you may pay more than the current market rate. Benchmarking ensures that you adapt to market shifts and maintain a competitive edge.

3. Supplier Performance 

👉 The third main risk is supplier performance. The quality and performance of suppliers can change over time. While you may have entered into a long-term agreement with a supplier who met your requirements at the start, their performance might decline or improve. With periodic benchmarking, you will have a clear picture of how well your suppliers are meeting your needs. This lack of insight can lead to suboptimal performance and possible missed opportunities to improve service or reduce costs.

4. Technology and Innovation 

👉 The fourth main risk is technology and innovation. Technological advancements and innovation can significantly impact products and services. If your long-term agreements are based on outdated technologies or practices, you could miss the benefits of newer, more efficient solutions. Regular benchmarking helps you identify opportunities to leverage technological advancements and innovation to your advantage, improving your operations and competitiveness.

5. Neglected Contract Terms

👉 The fifth and last main risk is neglected contract terms. Long-term agreements often come with multiple contract terms, such as service levels, quality standards, and performance guarantees. Without consistent benchmarking, these terms might be overlooked or forgotten. This can lead to compliance issues, as both you and your supplier may not be meeting the agreed-upon terms. Regular benchmarking helps you stay on top of contract compliance and ensures that both parties fulfill their obligations.

Recap

In summary, failing to regularly price benchmark long-term agreement products and services can result in cost inefficiency, leaving your organization vulnerable to market changes, supplier performance fluctuations, missed opportunities for technology and innovation adoption, and neglected contract terms. To mitigate these issues, it’s crucial to implement a robust benchmarking process that continuously assesses the cost, quality, and performance of your long-term agreements. This proactive approach ensures that your organization remains competitive, adapts to market dynamics, and maximizes the value derived from your supplier relationships.

Youtube: https://www.youtube.com/watch?v=fEcDvSu0bI0&ab_channel=BzCall

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

Written by Gert 

Last time edited: 07.11.2023

Test users needed!

Tallinn – 03 October 2023

👉 We are looking for members of a test user group (maximum 20 users) to try our service. We would like to develop and grow with them to the next level. Test users will get a win-win treatment 🤩 using our service for the first 3 months. To apply for test group members, please send this application to: admin@bzcall.eu and highlight the company name and the name of the main user.

Main value propositions using the service

  • Reduction of costs or expenses
  • Saving working time 
  • Fair and transparent competition
  • Fewer cases of nepotism
  • Reduction of lead times

What is BzCall? It is a fully functioning procurement auction platform, where is possible to reduce costs and expenses via the reverse auction method. A properly prepared procurement auction can reduce expenditures by 10-30% or even more. There are no limits on what spending can be cut or any restrictions on industries. The service pricing is reasonable, with no hidden fees,  clear, and straightforward. 

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

BzCall Technology OÜ 

Last time edited: 03.10.2023

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