Sustainable Procurement: How Far Have We Really Come?

Written by: Energy Guardians

Last Updated: October 26, 2025.

Procurement is no longer just a back-office function focused on cost savings and supplier contracts. In a world facing resource constraints, climate targets, and rising stakeholder expectations, procurement is becoming a strategic lever for sustainability.

But the key question remains; how is procurement currently organised, and to what extent are sustainability criteria actually being applied in tenders?

Let us take an honest look at where we stand and what still needs to change.

The Traditional Procurement Model

For decades, procurement departments have been structured around three core objectives:

• Cost efficiency: Negotiating the lowest price per unit.

• Quality and reliability: Ensuring suppliers deliver on time and meet specifications.

• Compliance and risk management: Reducing legal or reputational risks.

  
  

This structure made sense when financial performance was the sole measure of success. Procurement teams reported into finance or operations, often rewarded for driving down costs and securing stable contracts.

However, this model is focused almost entirely on price and delivery, which has inherent blind spots. It overlooks environmental and social costs hidden in global supply chains: carbon emissions, labour practices, deforestation, waste, and biodiversity loss.

That is where sustainable procurement comes in.

The Rise of Sustainable Procurement

In recent years, leading organisations have begun to integrate Environmental, Social, and Governance (ESG) principles into their procurement strategies.

This shift has been driven by several factors:

• Regulation: Policies like the EU Corporate Sustainability Reporting Directive (CSRD) and the UK’s Procurement Policy Note 06/21 require public and private buyers to account for carbon and social impact in procurement decisions.

• Investor pressure: ESG expectations are forcing companies to show how sustainability extends through their supply chains.

• Consumer demand: Customers are increasingly choosing brands that demonstrate ethical and low-carbon sourcing.

• Risk mitigation: Climate-related risks and supply disruptions have made sustainability a business continuity issue, not just a moral one.

As a result, many large organisations are reorganising procurement functions to include sustainability experts, supplier engagement teams, and ESG data analysts within or alongside traditional sourcing teams.

How Procurement Is Currently Organised

In most organisations today, procurement falls into one of three maturity levels:

1. Transactional Procurement (Traditional Stage)

Focus: Cost, compliance, and delivery.

Sustainability criteria: Rarely included, or applied superficially, e.g., a single ESG checkbox or self-declaration from suppliers.

Typical sectors: Manufacturing, construction, or organisations with legacy procurement systems.

2. Strategic Procurement (Transition Stage)

Focus: Balancing cost efficiency with quality, risk, and sustainability performance.

Sustainability criteria: Included in tenders through minimum standards (e.g., ISO 14001 certification, modern slavery statements, or carbon reporting requirements).

These companies often assess suppliers using weighted scoring models, where sustainability may account for 10–20% of tender evaluation.

3. Sustainable Value Chain Management (Advanced Stage)

Focus: Long-term value creation and supplier collaboration.

Sustainability criteria: Deeply embedded across sourcing decisions, contracts, and supplier relationships.

Suppliers are expected to:

• Measure and reduce their Scope 1–3 emissions.

• Use renewable energy.

• Provide ethical labour assurances.

• Participate in joint decarbonisation or innovation projects.

  
  

This model reflects the future direction of procurement, where ESG performance is as critical as price or quality.

Sustainability in Tenders: What is Actually Happening

Although sustainability in tenders is gaining traction, its depth and consistency vary widely across sectors and regions.

Here is what is typical today:

1. Public sector procurement is leading the charge. Many governments now require suppliers to demonstrate carbon reduction plans and social value contributions.

2. Private sector uptake is uneven. While global leaders like Unilever, IKEA, and Microsoft have embedded sustainability scoring in supplier selection, small and mid-sized firms often lack the tools, data, or expertise to do the same.

3. Common tender criteria include:

• Evidence of carbon measurement and targets (aligned with SBTi).

• Environmental management certifications (ISO 14001, EMAS).

• Waste and resource management practices.

• Labour standards and ethical sourcing policies.

• Diversity and inclusion in supplier workforces.

However, many organisations still treat sustainability as a compliance exercise rather than a value driver. Criteria are often vague, not verified, or carry too little weight to influence supplier selection meaningfully.

What Needs to Change?

For procurement to become a true engine of sustainability, three things must happen:

• Shift the KPIs: Move beyond cost savings. Reward procurement teams for carbon reductions, supplier engagement, and circularity outcomes.

• Build capability and data transparency: Equip procurement staff with sustainability literacy and digital tools to assess suppliers on credible ESG metrics.

• Collaborate, do not just contract: Work with suppliers to co-develop low-carbon materials, energy efficiency projects, and circular business models.

  
  

Ultimately, sustainable procurement is not about adding another box to tick, it is about redefining value. Every pound, euro, or dollar spent has an impact. The question is whether that impact aligns with your organisation’s sustainability commitments.

In Summary

Procurement is evolving; from a cost-driven function to a cornerstone of corporate sustainability. While sustainability criteria are increasingly included in tenders, their application remains inconsistent and often superficial.

To drive real change, organisations must embed ESG thinking into every stage of procurement; from supplier onboarding and performance reviews to contract renewals and innovation partnerships.

Procurement teams hold one of the most powerful levers for climate action. It is time to use it not just to buy products and services, but to buy a sustainable future.

For organisations ready to take the next step, Energy Guardians can provide deeper insight and practical guidance on embedding sustainability into procurement and operational strategies. From supplier engagement to carbon reduction planning, our team helps businesses translate sustainability goals into measurable outcomes driving both environmental and commercial value.