Sustainable procurement - sustainable supply chain

If you implement sustainable procurement and control and calculate your impact on climate and society, you will recognize the risks, weak points and true costs. You can reduce them and improve your own supply chain together with your suppliers. This offers you, as client and supplier, new opportunities for cooperation, quality improvement and innovation.

Sustainable procurement affects all areas of purchasing

There is no question about the importance of sustainable procurement and reviewing supply chains. The responsibility and steering power in procurement is constantly growing. In doing so, you must always observe (new) laws and regulations.

In principle, sustainable procurement affects all areas of purchasing. From office equipment, computers, stationery, paper, desks, cleaning agents, catering, carpets, lamps, refrigerators, beverages, all event trades, technology, trade fair construction, infrastructure, mobility and more. In short: it simply affects all suppliers and the entire procurement process.

Benefits of sustainable procurement and supply chain auditing

By having a written sustainable procurement strategy that is accessible to everyone in the company, you can uncover potential for optimization. This should be in line with your sustainability strategy and the 17 Sustainability Goals of the United Nations (SDGs). After all, when deciding what is the most sustainable solution or product, you base your decision on more criteria than just price.

Advantages:

• You save energy, resources and waste,
• increase energy efficiency and save costs
• They protect the environment with sustainable products and services,
• and increase the quality and innovative strength
• They promote the social standards such as equality, inclusion, diversity
• They increase the demand for sustainable solutions and products
  This means that these products are becoming more and more affordable. You can see this clearly with solar systems, for example.
• You avoid corruption and costly wrong decisions
• and examine topics such as legal security, future viability and risk management

Firmly anchoring the circular economy

In sustainable procurement, you consider the entire "life cycle" of products and services and their total costs.

These include these aspects or cycles:

• Production
  Procurement costs, where, under which circumstances, environmental impact, CO2 emission ...,
• Operation
  Energy consumption, quality, longevity/useful life, repairability, disposal costs....
• Second Life
  e.g. car batteries can later be used as storage batteries before being recycled in the final step
• Recyclability
  As early as the product design stage, care is taken to ensure that the individual components of sustainable products can be removed again. This guarantees the purity of recyclable materials and promotes recycling and the circular economy. Products made from renewable raw materials such as wood, hemp, grass, bamboo, etc. meet environmental standards in a special way because they bind carbon dioxide and offer a high level of supply security due to their renewable nature.

Sustainable procurement promotes social aspects

In sustainable procurement and when reviewing supply chains, you take a close look at social aspects in particular. Among other things, you evaluate the social contribution made by a supplier. This includes aspects such as

• Job creation and preservation,
• Occupational Safety,
• social cohesion,
• Equality, diversity, inclusion,
• Health protection,
• Human rights,
• Investment in education
• as well as regional value creation.

Certificates for the selection of sustainable suppliers

The various certificates and environmental labels EMAS, ISO, Blue Angel, FSC, Ökoprofit, Green Globe, Ecovadis and more are helpful in selecting the right provider.

Legal foundations requiring sustainable procurement

The specifications for sustainable procurement are based on these laws.

Supply Chain Sourcing Obligations Act 

The Supply Chain Act (LkSG) obliges companies in their supply chains to comply with human rights and certain environmental due diligence obligations in an appropriate manner. The obligations to be fulfilled are graded according to the actual scope of influence. I.e. whether it is the company's own business unit, a direct contractual partner or an indirect supplier.

The law has applied to companies with at least 3,000 employees since January 1, 2023. From January 1, 2024, companies with at least 1,000 employees are affected.

The Supply Chain Due Diligence Act specifies the international conventions in which human rights are laid down. It defines typical supply chain risks to which you must pay attention when fulfilling due diligence obligations. These include

• the prohibition of child labor,
• the protection against slavery and forced labor,
• freedom from discrimination,
• the protection against unlawful deprivation of land,
• occupational health and safety and related health hazards,
• the prohibition of withholding a reasonable wage,
• the right to form trade unions or employee representative bodies,
• the prohibition of causing harmful soil or water pollution
• and protection from torture.

Certain environment-related risks are also taken into account. On the one hand, if they lead to human rights violations, e.g. poisoned water. On the other hand, it is a matter of banning substances that are dangerous to people and the environment.

The LkSG takes certain environmental obligations from three international conventions, which you as a company must comply with:

• the Minamata Convention on Mercury,
• the Stockholm Convention on Persistent Organic Pollutants
• and the Basel Convention on Transboundary Movements of Hazardous Wastes and their Disposal.

Violations of environmental obligations are also sanctioned by the control authority.

Due diligence obligations for you as a company include:

• Establishment of a risk management system and performance of a risk analysis
• Adoption of a policy statement of the corporate human rights strategy
• Anchoring of prevention measures
• Immediately take corrective action when violations are identified.
• Establishment of a complaints procedure
• Documentation and reporting requirements for the fulfillment of due diligence obligations

Source and more information: BAFA - Federal Office of Economics and Export Control - Corporate Due Diligence Act

Climate Protection Act

With the amendment to the Climate Protection Act, the German government has tightened climate protection targets and anchored the goal of greenhouse gas neutrality by 2045. Emissions are to be reduced by 65 percent by 2030 compared with 1990. The amendment to the law came into force on August 31, 2021.

> on the intergenerational contract for the climate

The CSR reporting obligation

The reporting obligation for companies is to take effect from January 1, 2024 for the publication of annual reports covering the 2023 reporting period.

The new guidelines aim to significantly expand the group of companies subject to reporting requirements:

• all large companies with an annual average of 250 or more employees, regardless of capital market orientation. The second threshold for large companies continues to be total assets of over 20 million euros or sales of over 40 million euros.
• all capital market-oriented small and medium-sized enterprises, with the exception of micro-enterprises (as of 01.01.2026). According to Directive 2013/34/EU, companies are considered small if they exceed two of the three characteristics 1) 10 employees, 2) 350,000 euros balance sheet total and 3) 700,000 euros net sales.

The proposed directive introduces binding European reporting standards that are yet to be developed. These are to be composed of sector-independent, sector-specific and organization-specific standards.

A slimmed-down version of the standards is to be prepared as delegated acts for SMEs. These are to be able to be applied in a ratio that is appropriate to the organization and its resources, as well as the relevant stakeholder expectations for sustainability information. The SME standards are to be produced by October 31, 2023.

> Stricter CSR reporting requirements in the EU from 2023: Will the external audit become mandatory?

Other sources of information

You can find more information here, among other places:

• Guide to sustainable procurement - Jaro Institute
• Updated Green Procurement Guide of the City of Hamburg
• Sustainable supply chain management
• Sustainable solutions and suppliers to the event industry

About the initiative "16 Steps to 2025 - Towards a Climate-Neutral Event Industry

More about the initiative "16 Steps to 2025 - For a climate-neutral event industry" and the complete press release can be found at pressebox.de

> to the official press release - step 3

> to all press releases of Stefan Lohmann

> 16 Steps to 2025 - For a climate-neutral event industry

Get the practice guide:

Simple supplier check - the Sustainability Rider and the checklist provide an ideal basis for discussion for all services. Find out how sustainable your suppliers already are.