Pierre François Thaler of EcoVadis and Olivier Cellier from Alstom’s Power Sector business co-presented on Sustainable Sourcing as a Competitive Advantage at Ariba LIVE in Paris this morning. Despite the recession pushing sustainability off the front pages of the business press in the US, the subject is still a primary driver of business decisions for many companies in Europe. In fact, EcoVadis recently interviewed purchasing directors at 21 companies about why they’re pursuing sustainable procurement programs for their Sustainable Procurement Benchmark Report, and found some interesting results.

First, it’s important to note that there is a bit of a cultural divide between Europeans and Americans on sustainability and other social issues. Europe has long had more consumer pressure for labor, animal rights, globalization and environmental issues. So, Pierre François’ point about European consumers driving much of the interest at the corporate level is no surprise.

One of the most interesting take-aways from the research and Pierre François’ presentation was that the spirit of altruism - sustainable procurement is “the right thing to do for the planet” - ranked last in the list of nine factors driving these initiatives. By contrast, the top 3 drivers on the list were; avoid risk to brand/image, compliance to new regulations, and reduce costs of services/products (67%, 63% and 41% respectively). Potential damage to the brand and potential regulatory action are both consumer (or voter) driven, while cost reduction is a clear possibility for sustainable procurement in a number of areas, including packaging, energy and transportation. And if you can save money AND improve your brand in the process, it’s clearly a win-win.

Pierre François also stated that 1/3 of companies they interviewed apply approximately 10% of their RFP scorecard weight to a supplier’s answers on sustainability questions. While that statistic may not sound very large, it does indicate a maturity in many organizations. Companies are getting a handle on the relevant issues, metrics, cost drivers and risks.

What can companies learn from these European examples? Well, it seems quite clear that Europe is indeed leading the way in many sustainability efforts. So their demonstration that sustainable procurement and cost saving are not mutually exclusive AND the formalization of their efforts in the sourcing/procurement process provide an excellent examples for other organizations.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.