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Why a sustainable purchasing strategy makes sound financial sense

New tools available in Amazon Business turn procurement into an engine for achieving ESG goals

Until a few years ago, the concept of “corporate responsibility” was focused more on compliance and maximizing shareholder value. However, the corporate world has recently shown a full-throated enthusiasm for making progress towards environmental, social, and governance (ESG) goals. Doing nice things for the planet and its people tends to make people feel good, but achieving ESG goals also makes good business sense. Study after study shows that companies with strong sustainability practices enjoy improved operational performance, better cash flow, and greater overall stability.


According to Amazon Business’s “2022 State of Business Procurement” report, three of the four most important procurement priorities center around contributing to corporate social responsibility goals, including supporting sustainable, diverse, and local businesses. Today, new tools and processes make it easier than ever to use procurement to drive ESG goals—and the larger the entity, the greater the downstream effect of realigning procurement.


Buying local, at scale

When the U.S. Air Force decided to purchase more goods from small and local businesses, it relied on Guided Buying, a Business Prime benefit, to sort potential vendors by distance from any given base. Since implementing the program, the Air Force has spent $1.29 million with small, women-owned, and veteran-owned businesses without increasing overall spending.


“Our customers represent every sector of the global economy and every size of business,” says Antwaun Griffin, general manager for socially responsible purchasing at Amazon Business. “The Guided Buying feature can help companies easily steer their procurement toward local businesses, toward small and diverse sellers, or to products with sustainability certifications.”


“The consistent challenges we hear from customers around ESG goals revolve around identifying certified suppliers, maintaining adequate staffing for their sustainability and DEI initiatives, and standardizing and implementing practices and policies across their enterprise,” Griffin adds. “Our goal is to make it easier to maintain and grow their initiatives across their organizations and make it easier to standardize.”


The Guided Buying feature has long been a core component of its service. It allows businesses to give individual employees the power to purchase, while simultaneously controlling what kinds of products can be ordered. In 2021, Amazon refined this program further, creating credentialing programs and allowing companies to index products by three ESG-related metrics: those sourced from businesses within a certain distance, from socially disadvantaged businesses, and products with sustainability certifications. The result is a powerful tool that almost effortlessly helps businesses tune their procurement toward their ESG goals. “We view ourselves as an accelerant,” Griffin says. “We want to make it easier for our customers to make progress towards their goals and maintain and grow their initiatives across their organizations.”


Pacifica Senior Living, which operates assisted-living communities throughout the southwest and southeast, uses Business Prime to identify preferred products and suppliers that comply with its internal guidelines for healthcare and safety, while streamlining the process. “We love that we have the ability to support our local vendors or other small businesses,” says Jack McCarty, senior vice president of sales and marketing. “I don’t have to go out and do the research myself—it’s all right there. If I find a vendor that is the same price as a big conglomerate company, we’ll buy from the smaller vendor. And we’ve increased our diversity spend by approximately 25%.”


Real-time visibility

“One of the biggest challenges for our customers is gathering data for reporting,” Griffin says. “Our analytics and visibility reports allow you to track your diversity spending and sustainable purchasing per day, week, month, or quarter.” Because all tracking is done in real time, businesses can quickly adjust if they are not tracking toward their goals.


Guided Buying isn’t the only way Amazon Business is helping customers make progress towards their sustainability goals. Frustration-Free Packaging allows businesses to receive products without additional packaging that might be used to make products stand out on store shelves, meaning shipping is more efficient, and less ink and plastic are used. Similarly, the Amazon Day feature allows buyers to set a specific day when deliveries will arrive, which usually leads to fewer deliveries and reduces the number of boxes used for shipping. (Amazon Day deliveries use 30% fewer boxes.)


By promoting shopping from local vendors, Amazon Business is also doing its part to boost the economy while creating more resilient supply chains. “This program is focused squarely on growing and accelerating our third-party sellers,” Griffin says. “Widening the supply base is a powerful way of strengthening supply chains. It’s all part of our efforts to make it easy for our customers to do the right thing.”



Originally published on Fast Company, click here to view.

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