Management teams Procurement, increasingly aware of the challenges of biodiversity, are actively integrating these principles into theirProcurement responsible strategy.
Discover how the Procurement departments, at the heart of supplier relations, play a key role in the company's Biodiversity Strategy.
Contents
Strengthening legislation to preserve biodiversity
The new EUDR regulation on deforestation (in force since June 2023) requires companies to carry out due diligence declarations for imports into the EU of a number of materials supplied by natural ecosystems.
Since January 2024, European companies have also been required to comply with the Corporate Sustainability Reporting Directive (CSRD)which requires annual non-financial sustainability reporting. This report includes European standards, known as the European Sustainability Reporting Standards (ESRS), covering environmental, social and governance (ESG) criteria.
Among these criteria, ESRS E4, entitled "Biodiversity and Ecosystems", is particularly significant, as it assesses the impact of companies on biodiversity and ecosystems.
Towards a circular, regenerative model
Biodiversity, which encompasses all natural environments and life forms, plays an essential role in the fight against climate change. It helps to regulate the climate, provides oxygen, and is indispensable to businesses for agricultural land, the supply of raw materials, and the reduction of carbon footprints.
To preserve this biodiversity, companies must move from a linear "take, make, throw away" model to a circular and regenerative model, redefining value chains and strategies atProcurement.
Procurement and services account for between 60% and 90% of a company's Scope 3 carbon emissions in a carbon audit.
The CSRD encourages companies to analyze their upstream and downstream value chains, by carrying out a double materiality analysis and establishing trajectories to reduce their carbon footprint, thus integrating the preservation of biodiversity.
Management teams Procurement, increasingly aware of these issues, are actively integrating these principles into their strategies by speeding up the adoption ofProcurement responsible practices.
Why should managers Procurement consider biodiversity for Procurement responsible?
Whether a company has already defined its Biodiversity Strategy or is just beginning to implement it, they are all becoming aware of their links with biodiversity and their natural ecosystems.
The Procurement departments, at the heart of Procurement policies and strategies and relations with suppliers, carry a great deal of weight in the Biodiversity Strategy.
In addition, many companies have formalized Responsible Policies and Strategies and implemented Procurement Responsible practices. Decarbonization strategies via Procurement are also being implemented to combat climate change caused by greenhouse gas emissions.
Considering the Impact of Biodiversity and the demand for ecosystem services is essential to maintaining the balance of ecosystems on Earth and sustaining life.
What are the risks and opportunities of including biodiversity in yourProcurement strategy?
- Limiting natural resources: The depletion of natural resources is a major challenge. Over-consumption of water by certain industries is affecting water tables, leading to droughts that disrupt economic activities. Rare metals such as lithium and cobalt, essential to modern technologies, are also threatened with depletion in the coming decades if current demand persists.
- Soil degradation: impoverished farmland compromises productivity. According to the FAO, some 33% of the world's soils are already moderately to severely degraded, mainly due to intensive agricultural practices that neglect soil biodiversity.
- Environmental impact: Unsustainable practices contribute disproportionately to CO2 emissions. The industrial sector accounts for around 21% of global CO2 emissions. Unsustainable practices also affect local communities, end-users and employees, for example, through deforestation for agriculture or resource extraction.
Not integrating biodiversity into theProcurement strategy presents significant risks
Long-term risks
- Depletion of natural resources can lead to shortages, slowing or halting production.
Long-term risks
- Natural hazards and environmentally destructive practices can impact Tier 1 and Tier N suppliers, their operational activities and their supply chains (availability of raw materials, problems of access to industrial sites, availability of labor).
- Social concerns linked to environmental risks are high (pollution, flooding, fire, industrial risks, etc.) and can affect employees and their families, customers and end-users, as well as local residents.
- Failure to take Biodiversity into account can damage a company's image and constitute a reputational risk.
How can companies protect biodiversity through theirProcurement strategy?
To protect biodiversity, companies need to take several key steps:
- Identify the main biodiversity-related issues in your supply chains: It is essential to start by identifying the main biodiversity-related issues in your Procurement, which means first understanding the main impacts on your main supply chains. It's crucial to understand your business sector and its suppliers, and to analyze their impact on biodiversity.
- Understand value chains: Analyze each stage of the value chain for a given category. This step requires a good knowledge of your purchased services and products, and of your N-tier suppliers. It is advisable to rely on several stakeholders in order to advance in this analysis, starting with in-house "experts and knowers", and relying on existing and potential suppliers. Depending on the sector, it may also be possible to rely on professional organizations or networks, or on industry standards and certifications.
- Declare your value chain: For companies eligible for CSRD reporting, declaring your value chain and double materiality analysis is an essential step. This analysis covers the company's entire activity, from suppliers to end-users. This deliverable provides a first level of analysis of purchased products and services. Knowledge of its "supplier" value chains will make it possible to identify the main issues and the first levers to be put in place in order to improve the impact of supplier activities and of Procurement on biodiversity.
- Building a Biodiversity Strategy: The aim is to define the company's biodiversity challenges and objectives across all its activities Procurement . It is recommended to prioritize the categories and levers with the highest stakes/and which are easiest to implement.
What are the responsible Procurement levers to prioritize in order to reduce our impact and dependence on ecosystem services?
Examples of levers requiring a review of usage and consumption policies
- Implement sobriety policies: Reduce overall consumption to reduce pressure on natural resources.
- Include circularity criteria in Procurement : Promote reuse, reconditioning and recycled materials.
- Reduce transport impact: Select local suppliers to reduce the environmental impact of transport. Implement multimodal transport (rail, river) and identify opportunities for clean transport (hybrid, electric, NGV, cargo bike), optimize routes, etc.
Examples of levers requiring specification review
- Take waste management into account: Include recycling and end-of-life criteria in product specifications.
- Working on specifications: Reviewing product specifications to minimize impact on biodiversity.
- Review transformation processes: use sustainable materials and less resource-intensive processes.
What are the key stages in adapting your Biodiversity Strategy to your Strategies Procurement ?
- Training and raising stakeholder awareness: Organize training and raise awareness among Procurement organizations and their stakeholders (Businesses, Suppliers) about biodiversity preservation practices. Examples of training include the 2-tonne workshop and the biodiversity mural.
- Expand market knowledge: Implement sourcing actions to gain a better understanding of the supplier market and the available offer in terms of processes, procedures or circularity criteria, for example.
- Collaborate with specialized organizations: Work with experts and NGOs to qualify environmental and biodiversity impacts and set up prevention plans.
- Assess the environmental footprint at the design stage: Integrate eco-design criteria right from the product design phase to reduce their impact on biodiversity.
- Integrate biodiversity criteria: Select suppliers on the basis of sustainable criteria, integrating biodiversity protection.
- Supporting suppliers: encourage experience sharing, organize peer working groups, set up specific development plans, encourage innovation and experimentation...
- Integrate biodiversity issues into its roadmap Procurement : Develop measurable objectives for biodiversity preservation and review this roadmap annually (e.g.: number of categories Procurement having identified their biodiversity issues, number of dedicated action plans per category).
Conclusion
Integrating biodiversity conservation intoProcurement 's strategy is both an environmental necessity and a strategic opportunity for companies.
Managers Procurement who adopt responsible practices can not only help to make their company more resilient, but also contribute as a "Leader" in promoting the preservation of biodiversity.
Effective Procurement Responsible strategies will integrate the need to go beyond carbon neutrality, aiming for a continued positive impact on nature, while fostering collaboration, innovation and empowerment.
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