News

Monday 11. January 2010

Press Release

 
Current Study: Sustainable Procurement is Leading to Competitive Advantages
 
Düsseldorf, St. Gallen, January 11, 2010 – For 41 percent of those responsible for purchasing and procurement in the producing industry, ecological standards in purchasing are not important even today; and for one fourth, social standards still play no role in purchasing even now. And that, although 34 percent of the 202 companies interviewed in a current study stated that compliance with ecological and social standards had resulted in competitive advantages. This study was conducted by the Kerkhoff Competence Center of Supply Chain Management (KCC) at the University of St. Gallen and by the Institut für Demoskopie Allensbach (Institute for Public Opinion Research).
 

"These results are surprising", says Dr. Erik Hofmann, Vice Director of the Chair for Logistics Management at the University of St. Gallen and project manager at KCC. "The interviewed companies are split into two groups: While nearly half of them attaches no importance to sustainability issues, one third has already taken measures in this field and has been able to achieve clear competitive advantages according to their own statements. And in all probability, they will be able to further expand these competitive advantages if the other half of the companies continues to remain inactive."

However, change is in sight. Accordingly, 69 percent of the study participants expect that sustainability in procurement will become even more important in the future. Those interviewed consider the most important future trends to be the preservation of natural resources (25 percent), the use of alternative sources of energy (16 percent), as well as low-emissions production (12 percent). Seven percent already think about how they can design their logistics to render it more environmentally compatible.

Currently, sustainable procurement is already of particularly high importance in very large companies and also with producers working for the end consumer. Ecological standards are accordingly very important for 79 percent of the decision makers in the food, textile and furniture industry, but only for 50 percent in the metal industry and in mechanical engineering.

"Consumers are increasingly demanding sustainable products", says Jens Hornstein, partner and head of the competence team Sustainable Procurement at Kerkhoff Consulting. "So it's not surprising that these sectors attach greater importance to the issue of sustainability. But even other sectors will feel the increasing pressure for social and ecological standards in the future, even if they don't supply the end customer. Because they are part of another supply and value-added chain which gets to the end customer somewhere down the line; and in the future, these sectors will be examined in their entirety for sustainability factors."

This theory is supported by the study: 45 percent of those interviewed stated that eco-labels are important today already or even very important for their customers – whether they are end consumers or other companies or authorities. "To obtain such labels, the entire supply chain needs to be audited – all the way to winning and mining the raw materials in third world markets or in markets of newly industrialized countries", says Hornstein. "Since statutory regulations, especially initiated by the European Commission, are tightened up yet, companies will no longer be able to shirk their responsibility." Today, still 42 percent of the companies interviewed do not have a single employee permanently on location in the regions from where they obtain their raw materials. Only 15 percent of the companies take care that a permanent contact is available in all regions.

"Today, sustainability is no longer an issue exclusively for social romantics or Greens who have made it to the top management levels", says Dr. Erik Hofmann of the University of St. Gallen. Of the companies interviewed, 76 percent indicated that they have become active because new statutory provisions forced them to. Changing customer demands were the reason for 69 percent of them to take into account in their procurement the issues of ecology and social standards. According to their own statements, barely one fourth of those interviewed is "green" in their activities because of their own value system and their own corporate philosophy. "But whatever the motivation for action may be", says Hofmann, "the decisive factor is that the necessity for action exists. If that might even result in competitive advantages, it will provide sufficient incentive to deal with the issue of sustainability as early as possible and be ahead of the market."

Excerpts of the study are published exclusively in the current issue of Impulse, the magazine for small and medium-sized businesses. Interested parties may obtain further information from Mr. Christian Pfeiffer, Head of Corporate Reputation, Kerkhoff Consulting GmbH, +49 211 621 80 61 -0 or c.pfeiffer(at)kerkhoff-consulting.com.