06 March 2020
Topics in this article
  • ESG
  • Sustainability

The next big powerplay for the CPO is sustainability. They are the right place for sustainability to sit, and 2020 is the year to do it.

Business structures and functional responsibilities are often a bit fuzzy or even a bit arbitrary.  The range of responsibilities of a particular role and reporting lines vary tremendously in my experience. Often, they are based on considerations such as history, chance, relationships, and power. 

Case in point: Procurement. 

The CPO most often reports to CFO, but the COO, CAO or even CEO can be the boss of a successful CPO.  Why the CPO report into any of these may reflect the interests of the relevant executive, the exec’s bandwidth at a moment in time, personal interest and so on. It may partially connect with the range of responsibilities that a CPO can marshal. And those vary from overseeing a proportion of sourcing, all the way through to full responsibility for P2P, S2P, risk, and vendor management.

Hunger to help

In entrepreneurial, ambitious functions, responsibility often expands to those with the appetite and hunger for new challenge, and capability to match.   As new challenges emerge or new specialisms are required, someone has to oversee them. Most likely, this goes to the volunteer that seeks it! 

Herein lies opportunity. Sustainability today is often randomly allocated in one of marketing, public affairs, or risk. Typically, this is because someone in those functions has grabbed it out of personal interest, but that doesn’t mean it’s the right fit.  Often, when this is the case, the full potential to impact the business is not quite leveraged.

Where’s the impact?

Sustainability has many facets, but most business’ environmental impact is incurred through suppliers. (Most businesses are not at the start of a supply chain.)  As 69% of revenues go to suppliers and 13% to employees, of course it is.  In a world of long supply chains, it does not take a math genius to figure out that suppliers have the biggest responsibility for your Sustainability and environmental footprint.     

If businesses are to have a systematic response to how they engage with their supply base and Sustainability,  dealing with it in a consistent, disciplined fashion means that someone has to take overall responsibility.  It should go to the person who has the best influence over creating visibility, processes, and engagement with suppliers needed to deliver sustainability sustainably! 

The CPO already is dealing with suppliers, harvesting data from those suppliers, and seeking a degree of consistency across such interactions. Given that, it makes more sense that the CPO takes over the Sustainability program for the whole business. 

Let’s get serious

If businesses are serious about Sustainability, then Procurement must take it, and business must give it to Procurement.  Just as the entrepreneurial CPO has grabbed hold of helpful narratives in the past. As an example, look at how many financial services CPO used the new regulatory landscape around the post financial crash world to reposition their function. Procurement can follow suit, and now is the time for Procurement to muscle in and take on overall charge.

2020 is the year to do it.  Make the case and join the ranks of the CPOs of Mitie, Babcock and other great businesses. Those who have recognized that the Chief Procurement Officer should be Chief Sustainability Officer as well.

related posts

Let’s talk.

If you are looking to drive purposeful and profitable change, get in touch.

Contact us