PRESS RELEASE – February 29, 2024.- The impact that ESG (Environmental, Social & Governance) factors have on global supply chains is critical, since (*) 50% of environmental emissions are generated in these. This is the reason why European legislation, and soon also Spanish legislation, is becoming increasingly tougher in terms of the obligation for companies to exercise ESG actions and responsibilities to alleviate this problem.
This has led to the fact that more and more companies are focusing on compliance with these parameters. In fact, 62% already carry out activities in the purchasing area related to ESG aspects, as shown in the latest study conducted by Fullstep, a company specialized in the end-to-end digitization of the purchasing, procurement and supply chain process.
The study also shows that, although 74% of the sample thinks that the level of activity in sustainable purchasing is still at average values, there is the conviction that the activities currently carried out are an important lever for the implementation by the management.
“More and more companies are working proactively to control ESG factors in their supply chains, especially those that have strategic purchasing areas that lead management committees, with high levels of maturity of the function. However, the reality is that companies have a lot of work to do, despite knowing the importance and impact that establishing these guidelines generates for customers, professionals, suppliers, partners and, of course, for the business. We believe that we must approach this challenge with responsibility and strength, because it will make us all contribute to generate social progress and also brings benefits to companies in terms of competitiveness, legislative compliance, investor confidence, corporate ethics, among others,” explains Rosario Piazza, Fullstep’s CEO.
Only 13% of companies have a complete technological implementation of sustainable procurement processes.
The European Commission has established that companies will be held responsible for any failure or non-compliance with ESG aspects by their suppliers.. “This is why there has been a growing interest in carrying out an exhaustive analysis of the current situation of both companies and their suppliers, as well as the establishment of a risk model to address any critical situation” , says Piazza.
A commitment to technological systems that help companies to have a model capable of establishing a complete analysis and control of objectives will be a key lever to go down the path of regulatory compliance. However, the survey shows that this is one of the most critical points, as only 13% of companies have a complete technological implementation of sustainable purchasing processes throughout the value chain. And only 15% have developed systems for setting, measuring and controlling objectives.
76% of companies believe that the directive will have a high impact on supplier management.
The level of activity in sustainable purchasing is still at average values in Spanish companies, although there is a medium-high level of awareness of the implications of the directive on purchasing activity in those companies with more than 1,000 employees.
Furthermore, for 61% of the companies, the new European Directive on sustainability in the supply chain Corporate Sustainability Due Diligence Directive (CSDD) will have a high impact on traditional purchasing activities, reaching 76% with regard to the management of the supplier base. The handicap lies at the budgetary level and at the certification level.
Sectors such as Industry, Services and Construction show greater knowledge of the Directive and a higher degree of applicability of ESG factors, as well as a higher level of certification and greater involvement of their suppliers in sustainable purchasing processes. However, when it comes to carrying out activities, it is Industry and Health and Pharma that show the greatest dynamism.
Having control over parameters such as the origin of products, manufacturing materials, or knowing what happens once they are used is essential for purchasing departments to comply with strict ESG principles throughout their sphere of influence, both internally and externally.
51% of the companies consider that specialized external support is necessary.
Despite the fact that companies consider that there is a medium-high level of internal knowledge to carry out the transition, more than half of the companies consider that specialized external support is necessary to carry it out. Integrating technology at the service of ESG (Environmental, Social and Governance) objectives has become one of the key points at the business level for generating value, obtaining a competitive and differentiating advantage in the current market and for regulatory compliance. Digitalization and ESG criteria must go hand in hand to gain in transparency, efficiency and profitability.
(*) Source: World Economic Forum Study
