Procurement teams play a “critical” yet “underappreciated role” in achieving sustainability goals, an event was told.
Paul Lacy-Smith, CPO at Restaurant Brands International (RBI), one of the world’s largest owners of fast food brands, described how the company restructured its procurement function to meet sustainability goals, including the creation of two new posts dedicated to sustainability in the supply chain.
Speaking at the CIPS Sustainable Procurement Summit, Lacy-Smith said: “Procurement supply chain teams clearly play a critical and underappreciated role.”
He explained that RBI brand teams – which include Burger King, Tim Hortons and Popeyes – previously made sustainability commitments independently without consulting the company’s wider procurement team over feasibility surrounding these commitments, which hindered their ability to meet goals and set roadmaps.
He explained: “The big question here is, ‘In that process, where was procurement and supply chains?’ They weren’t anywhere. We were at the back end of the tail, having to deal with commitments that were suddenly told to us.
“That’s okay to a degree if the commitment is in 2030 and it’s 2020. But the issue was, there were commitments due in 2021, and some of those we didn’t even know about when they were made.
“80% of our carbon footprint sits within our procurement supply chain. It would be a big issue if brands were making commitments on planet-related issues around climate without consulting with procurement supply chain teams. It just wasn’t happening.”
However, this presented an opportunity for the procurement team to lead on ESG goals and place themselves at the centre of the company’s sustainability strategy.
“That then gave us an opportunity, because it created an issue that we had to solve. We took the leadership and the accountability and said, ‘We cannot have this happen for the future commitments that are coming in 2023 or 2025. We said we needed a long term strategy where procurement is right in the centre’.”
These are the three steps RBI’s procurement team took:
1) Take ownership
“The first thing that we did is we took ownership of the process,” Lacy-Smith said.
He explained RBI introduced two dedicated supply chain sustainability officers into the procurement department to work alongside the CPO, dedicated to focusing on sustainability commitments and how they impact on supply chains, feasibility and perspective.
2) Restructuring
The new structure meant all sustainability commitments had to go through the company’s procurement sustainability team before being able to be signed off by individual brands. This was a reversal of the company’s previous structure.
Lacy-Smith said: “Procurement then had to be consulted and there was no way commitments could get through before it came through our team, and that team would have a feasibility assessment brief which would come from the brands. We would do the feasibility assessment and then do the recommendations, and only then would it go to the brand.”
He said commitments would not get signed off until the procurement team had made clear there was no risk to business, it was commercially feasible, and the time scale of the commitment “made sense.”
3) Revising commitments in light of procurement feasibility
“The results of this process is that we had to revise 45% of our commitments and statements prior to them being made public,” he said. “We didn’t just revise down or up, it was a mix of revisions, but we had to revise them to make sure they were feasible and relevant.”
He said: “You’ve got to build really, really deep expertise in this area, and make sustainability and supply chain or procurement managers’ role integrated day to day.”
Fundamental to the success of this structure was how the dedicated supply chain sustainability team became a “real centre of expertise”.
“They knew everything there was to know about the risks associated and supply chain, each commitment for each category. They would be able to say, ‘Is this commitment feasible versus our competitors? Where do we need to be versus competitors on this area? Is it feasible with investors? Is it feasible from what they’re saying? Is it feasible with NGOs?’”
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