Business insights

Procurement: the linchpin for effective ESG

Procurement: the linchpin for effective ESG

In the dynamic landscape of modern business, the significance of Environmental, Social, and Governance (ESG) factors is extending beyond investment decisions to fundamentally reshape procurement practices. As organizations increasingly recognize the interconnectedness of their operations with broader societal and environmental issues, the integration of ESG considerations in procurement has become imperative. In this blog post, we will explore the pivotal role of procurement for ESG practices and its impact on businesses, suppliers, and the global supply chain.

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Environmental impact & social responsibility in the supply chain

One of the core tenets of ESG in procurement is its emphasis on environmental sustainability. Businesses are now scrutinizing their supply chains for eco-friendly practices, seeking suppliers committed to reducing carbon footprint, to minimizing waste, and to adopting sustainable sourcing methods. By prioritizing environmentally responsible, procurement organizations can in fact contribute to global efforts to combat climate change and foster a more sustainable future.

ESG principles also bring a heightened focus on social responsibility within the supply chain. Companies now must carefully assess and ensure fair labour practices, uphold human rights, and promote diversity and inclusion among their suppliers. By fostering socially responsible procurement, organizations contribute to the well-being of communities, improve working conditions, and build stronger, more ethical supply chain relationships.

Governance and ethical business practices

Effective governance within the supply chain is paramount for sustainable and ethical business practices. ESG in procurement encourages organizations to prioritize suppliers with transparent governance structures, strong ethical guidelines, and effective risk management practices. This not only mitigates the risk of unethical conduct within the supply chain but also fosters a culture of accountability and integrity.

Additionally, incorporating ESG principles in procurement is an effective strategy for mitigating risks associated with environmental disasters, social unrest, and governance failures. By diversifying the supplier base and thoroughly assessing ESG practices, organizations can enhance their resilience to unforeseen disruptions, ensuring continuity in the face of global challenges.

Regulatory compliance and brand reputation

As governments worldwide tighten regulations surrounding ESG practices, incorporating these considerations into procurement strategies ensures compliance with evolving standards. Proactive adherence to ESG regulations not only minimizes legal risks but also positions organizations as responsible corporate citizens contributing to the broader social and environmental agenda.

Not only governments, but also consumers and stakeholders are increasingly conscious of the ethical and environmental impact of companies, products and services. By aligning procurement practices with ESG values, organizations not only meet consumer expectations but also enhance their brand reputation. A commitment to sustainable and responsible sourcing can lead to increased customer loyalty and positive brand associations.

Fincons and JAGGAER for seamless procurement

Fincons Group is a JAGGAER Service Partner for the implementation, integration, configuration and application management of their e-Procurement and Spending Management platforms. JAGGAER is the biggest independent provider in complete solutions for Source-to-Pay and Supply Chain, delivered in SaaS mode (Software as a Service) for every type of expenditure and product sector worldwide.

By leveraging the implementation and configuration expertise of Fincons Group’s specialised Competence Center, as JAGGAER partner Fincons delivers the best JAGGAER integration and support, optimizing procurement procedures, enhancing spend analytics, and driving performance improvement.

The partnership spans several JAGGAER solutions and is designed to support clients with a full range of supply chain requirements, including supply chain ESG compliance monitoring.

Synesgy: making sustainable procurement simple

ESG considerations in procurement are therefore no longer optional but integral to the success and sustainability of businesses.

Aware of the challenge companies are facing in today’s landscape, Fincons and JAGGAER joined forces to create a plug-‘n’- play “ESG connector” leveraging the features of Synesgy, the global alliance of leading companies improving the transition to sustainability with data and information collected through a dedicated digital platform. This new connector integrates speedily and efficiently with JAGGAER’s proprietary platform and provides customers with information about the supplier’s certified ESG score, integrating it into the supplier’s file for future reference and performance monitoring over time.

The Synesgy connector favours transparency reduces human error in calculation and reporting of ESG scores while enabling a clearer view of suppliers’ scoring over time as certified by major assessment platforms or ESG practices.

Moreover, the Synesgy connector supports supplier portfolio management by requesting and orchestrating requests between the J1P and Synesgy API through information flows performed in batch or on-demand mode.

Aligning procurement practices with environmental, social, and governance principles is now more important than ever, as organizations strive not only contribute to a more sustainable and ethical world but also position themselves for long-term success in an increasingly conscious and interconnected global marketplace. As a result, embracing ESG in procurement is not just a strategic choice; it is a commitment to a better, more sustainable future for businesses and the planet alike.

Contact us to find out how Fincons can help you meet your ESG procurement goals!

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Matteo Villa - Fincons Group Matteo Villa

Fincons Group

International Institutions & Research Global BU General Manager
Director of JAGGAER Competence Center