Simon Geale

20 March 2023
Topics in this article
  • Sustainability

How do CPOs juggle cost optimization and pressing Net Zero targets?

CPOs have been battling with the need to manage short-term costs and the pressure to deliver on (perceivably) long-term goals like sustainability targets.

Our CPO Report showed that the economic downturn isn’t causing procurement leaders to abandon sustainability goals in 2023 but there is no doubt they are in a challenging environment. We have set out focus areas for procurement leaders looking to prioritize minimizing their emissions this year.

Investing in a Sustainable Supply Chain

Tackling emissions begins with mobilizing a sustainable supply chain. Our Investing in a Sustainable Supply Chain report showed that 85% of investment managers believe that businesses that do not implement supply chain sustainability initiatives will see share prices fall. Of course, this is not simply of financial concern, this year is critical for implementing the pledges made at COP27.

We are now seeing clients taking control of their Scope 1, 2 and 3 emissions, but there’s much still to be done. For those overwhelmed by the challenge, Scope 3 emissions account for 90% of a business’ total carbon footprint, so there’s no better place to start. Deprioritizing investment in sustainable practices is a financial risk in today’s economy. Net zero targets should be foundational in future-proofing any business.

Fostering collaboration

Collaborating to share skills and resources will be key. This is why we have been working on The Scope 3 Maturity Benchmark, created in collaboration with the “Scope 3 Peer Group”– the Benchmarking tool helps companies to learn from each other’s progress through shared data. CPOs have a key role to play in tackling Scope 3 emissions in order to deliver on ambitious sustainability targets, and leaders need to work together with stakeholders from across their organizations and industry to assess where carbon emissions can be driven down. This starts in the supply chain. Working collaboratively with leaders inside and outside your organization will accelerate the design of impactful solutions.

Externally, in many ways, sustainability should become the new health & safety – something every organization works together on, not competes over. Ensuring that procurement teams cultivate modern skillsets, knowledge, and toolboxes to successfully deliver new, innovative, and sometimes complex programs that may be some way away from what they are used to considering as ‘traditional procurement’.


The time for empty promises has long passed, and businesses now need to commit seriously to delivering on climate pledges. CPOs must be methodical in addressing net zero targets, and cost optimization must go hand-in-hand with tackling emissions. Driving profits and prioritizing the right areas where progress is achievable will be key to delivering outcomes, alongside investing in areas where implementing change feels more difficult. Where revenue opportunities present themselves, new sustainable growth models must be the goal.


Finally, businesses need to have a handle on their data. You need to be able to pinpoint exactly where your emissions are. Without clear data, it’s difficult to create solutions and present a business case for investing in addressing the biggest emitters. The answer to perfect data lies in collaborating with peers, associations, and regulators to commit to common standards and helping supply chains to adapt.

Read our CPO Report to learn more about the key focus areas for procurement in the coming year.

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