Enabling green procurement in the Agri-value chain
Sustainable sourcing is a consumer and producer responsibility ☯!
In 2020, Nigeria recorded over N321 billion in export earnings, and in more recent times, the export of Nigerian produce has experienced a surge of about 112 % from 2020 (NBS, 2021).
Now, not only does this show a vast increase in the demand for indigenous produce, it also shows the magnitude of our agricultural landscape and the need to source ethically to meet global standards.
Sustainability has taken a new face in recent times as more consumers are ethically conscious of their consumption. According to Paul Polman, previously CEO of Unilever, goods that have integrated sustainability into their purpose and product across their value chain are growing 30% faster than the rest of the company;. Hence, companies and even farmers need to be more conscious of their production strategies, sourcing processes, and the partners in their value chain.
Procurement involves every activity a company undergoes to obtain goods and services to support its operations. In the agri-value chain, procurement is critical because the price and quality of the inputs used in the production process can determine the size, value, price, and overall outlook of the final product.
The Agri-value chain consists of the factors involved in realizing the final product from pre-planting to delivery to the final consumer. Activities such as sourcing materials within the same region of processing to reducing carbon footprint to ensuring minimal use of chemicals and electricity in production, ensure green procurement. In addition, waste reduction through demand analysis and reverse logistics further enhances green procurement.
A company’s ethos can be determined by the decisions it takes and the values of the partners it works with. So the importance of sustainability to a company can be quickly determined by ‘how green’ its procurement process is.
Sustainable procurement is the act of adopting social, economic, and environmental factors alongside price and quality considerations. Beyond the aforementioned metrics, here are 3 simple questions that I developed to enable green procurement:
- Do you know your customer?: What do they like? Do they have health concerns? What is their view on sustainability? Are your customers willing to pay a premium for green produce?
- Do you know the market? : Do you know the market value and sourcing strategies of commodities you provide? Can you get your raw materials locally to reduce carbon emissions? What is the value added on each product, and at what stage can you maximize green value? Who are your buyers and what is their ethos? What are the labor and carbon laws of the region you operate in? Is sustainability vital to the future growth of your business? Can companies in your region charge a premium on sustainability?
- Do you know your employees or company? What is their stance on sustainability? Would they be willing to go the extra mile to seek partnerships with green stakeholders? Are they innovative in their approach to minimize waste and maximize value? Are they passionate about making the world a better place? Do they have integrity, and are they transparent in their dealings? What are their supply chain structures? What systems and incentives do they have in place to enable green procurement? Are they futuristic in climate sustainability?
In summary, green procurement has a huge potential to increase company earnings as green consumer demand has exceeded green product supply (Mckinsey, 2022). With the new ISO standards that incorporate sustainable procurement, agricultural companies need to be more intentional and transparent about their green procurement strategies as the differentiability and substantiality of “greenness” could lead to an increase in earnings through customer retention, reduction in carbon emissions, and taxes.
