Purchasing – big power and big opportunity

If you brought together 400 purchasing and sustainability professionals what would you expect? We were surprised by both their vision and the challenges involved in harnessing the power of procurement to create a prosperous and sustainable future.

Purchasing, such as when the federal government spends tax dollars, can be perceived as a means to an end, full of complicated rules that are driven by compliance. The opening of the 2017 annual Summit of the Sustainable Purchasing Leadership Council (SPLC) – a network of buyers, suppliers and experts that promote sustainable procurement – proved that stereotype to be wrong. The key message was that purchasing is big power and big opportunity. If done right, this multi-billion industry can be used to shape the future. Vien Truong, the opening speaker from Green For All, asked purchasers and suppliers to be ‘heros.’ Meaning that the choices we make with each contracting process can determine whether our communities and families have access to safe water or clean air.

This message resonated with us. We believe that open contracting, i.e. transparent, accountable and efficient purchasing, is the bricks and mortar of public benefit. It is where public funds get converted into roads, schools and hospitals through the contribution of the private sector. Here are some of our key takeaways for open contracting and sustainability from the Summit:

• No sustainability without transparency. Opening up information about who is buying what from whom for what price and under which terms is integral to achieving sustainability goals. With greater access to information about the real people who own bidding companies, who win contracts, and whether they are delivering what they promised, we can ensure that the most capable and ethical companies get business. With access to more information, we can also ensure that it is incrementally easier to understand and communicate the environmental and social benefits created.
• Transparency helps address market failures. The biggest benefits from transparency are when companies and the public have access to useable, accessible information in markets. Making products traceable, building public open data registers of who owns and controls companies, and clearer information about how government sources and purchases help prevent risk while enabling greater efficiency and accountability. The SPLC community can not only lead by example in this area but also be a key voice encouraging change from national and state governments.

• Sustainability is core business. We couldn’t agree more. The recent uptake of open contracting, as well as company ownership transparency, shows clearly that transparent and efficient procurement processes can save both buyers and suppliers money and time. Better market intelligence makes it easier and quicker for companies to prepare bids, conduct efficient and accurate due diligence on partners and suppliers, and for public agencies to select the best suppliers.

• We need hard numbers to make the business case for both sustainability and open contracting. In our session, a representative from a manufacturing company shared that she wanted to make a case for ethical sourcing to her upper management but lacked the hard numbers to do so. We see that too. It is one of our big quests to deliver metrics for how open contracting improves value for money, market opportunity and innovation. We can already point to Ukraine where competition has increased by 50%, but we want more hard data from more places.

• Cities and universities are at the frontier. We loved meeting so many representatives from cities and universities at the Summit. Cities and universities purchase goods and services on behalf of their residents. Sometimes these residents are left in the dark when it comes to important questions about what is being procured, how sustainable the purchase is and who is being paid. Cities and universities are opening and sharing information about their acquisition needs, contract process, and the performance of their vendors will help to improve their communities and will increase opportunities for potential vendors.

We are thrilled to be part of the sustainability purchasing community, and we are keen to continue working with SPLC and the broader business community to truly harness the big powers and opportunities of purchasing.

Businesses interested in why transparency of company ownership and government purchasing matters and how they can play a leadership role can do three things:

• Learn more about why company ownership transparency helps business lead with integrity and reduce risk at www.ownershiptransparency.com, and read up on why open contracting can make doing business with government more efficient and competitive in our new publication Opening up public procurement.

• Share your expertise and engage in the conversation by registering for an upcoming webinar or event about how the private sector can drive innovation and change in government purchasing. Or contact Madeleine McCarroll at The B Team on mm@bteam.org if you’d prefer a conversation about how your company can contribute to this growing field.

• Take action by disclosing your ownership or encouraging your suppliers to do the same and be leaders in transparency at www.openownership.org. The OpenOwnership platform can help make purchasing more efficient by giving buyers better (free, open and public) access to company ownership information across jurisdictions.

We look forward to hearing from you!