Embed Climate Into Corporate Procurement Teams

Procurement decisions shape the majority of a company’s environmental footprint, with supply chains often accounting for more than 90% of total emissions. Yet many sourcing processes still prioritize securing the lowest upfront cost over total value, exposing organizations to increasing risks–including supply disruption, price volatility, stakeholder pressure, and evolving regulatory requirements (i.e. SB 253 & SB 261 or EU CSRD) if in scope and emerging mandatory climate rules in other jurisdictions. In parallel, emissions are highly concentrated across a small number of sectors, mainly energy (73%), transportation (16%) and industry (21%), reinforcing that targeted procurement interventions hold a large opportunity in driving emissions reductions.

Addressing these risks does not require a separate climate program–it requires embedding climate considerations into existing procurement practices. This approach enables better demand planning, reduces waste, and strengthens supplier performance. Over time, it supports a more resilient supply base while identifying opportunities for cost savings. Furthermore, prioritizing lower-emissions purchases and transportation modes can strengthen outcomes for communities disproportionately affected by supply chain emissions, while protecting the natural systems that underpin long-term business continuity.

Contribute to Supply Chain Emissions Data and Embed into Supplier Segments

Before collecting supplier data, identify the procurement categories where climate efforts are likely to have the greatest business and environmental impact. Procurement teams rarely have the resources to assess every supplier or purchase equally, making prioritization essential. Consider factors such as spend, emissions intensity, supply risk, regulatory exposure, strategic importance and company leverage or influence to determine where enhanced supplier engagement will create the most value. Focusing first on high-impact categories enables organizations to target limited resources where they can reduce risk, strengthen supply resilience, and support climate goals most effectively. 

Next, establish a clear baseline of supplier activity and associated emissions. Procurement teams may not have comprehensive supplier data. Where direct or activity-level supplier data is unavailable, procurement professionals can start with spend-based data (e.g., spend by supplier) and apply emissions-factor databases or carbon-accounting tools to estimate the associated greenhouse gas (GHG) footprint of each supplier.

Conduct a hotspot analysis, such as using the tools provided in the Scope 3 Navigator, to identify the suppliers, materials, and spend categories that account for the largest share of Scope 3 emissions. Prioritizing these areas enables targeted engagement, more effective supplier performance management, and faster emissions reductions aligned with net-zero goals.

From there, work toward improving data quality. Engage priority suppliers that contribute most to emission hotspots to collect material category-specific emissions data rather than relying solely on industry averages. This enables more accurate measuring to tracking reduction of Scope 3 emissions with targeted action. Likewise, strengthen demand forecasting to better align purchasing volumes with actual need–reducing excess inventory, lowering waste, and improving cost control.

The role of procurement in climate varies based on organizational structure. In companies with a dedicated sustainability team, procurement teams may likely collaborate closely to align priorities with them, integrate environmental criteria into sourcing processes, and support consistent data collection and reporting. In organizations without a dedicated sustainability function, procurement can take on a more active role. This may include engaging suppliers to gather relevant environmental data, incorporating climate criteria into sourcing and contracting decisions, and tracking performance over time. In both scenarios, clear coordination and well-defined roles are important for translating climate goals into measurable actions within procurement processes.

Integrate Climate Criteria into Sourcing Decisions and Contract Terms

To be effective, climate considerations must be embedded in core sourcing processes–not treated as an add-on. This starts with integrating clear, standardized requirements into RFPs, including supplier GHG emissions disclosures, science-aligned reduction targets, and evidence of ongoing decarbonization (emissions reduction) actions. Using public resources such as The Chancery Lane Project (TCLP)  or the Sustainability Clause Library (SCL) can help convert climate commitments into enforceable legal language and strengthen accountability across the supply base.

These expectations should then be carried through into contracting. Contracts can include provisions requiring emissions disclosures to environmental performance benchmarks with periodic review cycles. Where relevant, audit rights and third-party verification can be incorporated to ensure contractors remain accountable.

Embedding these requirements into standard procurement workflows, rather than handling them as one-off requests, drives consistency, cost savings and signals clearly to suppliers that climate performance is a core business requirement, alongside cost, quality, and service.

Integrate Environmental Requirements into Product and Purchase Specifications

To fully embed climate into purchasing decisions, organizations can include environmental criteria directly within product specifications. Product specifications define the characteristics, materials, packaging, and performance requirements of purchased goods. Updating these specifications enables influence over environmental outcomes before supplier selection occurs. Rather than treating climate as a separate initiative, environmental considerations can be integrated into existing specification requirements used in procurement processes.

As part of this approach, procurement teams can also identify and reference credible, category-relevant certifications and Environmental Product Declarations (EPDs) – standardized, independently verified documents that report quantified environmental impacts across a product’s life cycle – for the goods and services they source most frequently.

Incorporating recognized certifications (such as those tied to energy efficiency, recycled content, or sustainable sourcing) into specifications helps standardize expectations, simplify supplier evaluation, and improve the reliability of environmental performance data.

For instance, the EU Ecolabel  is a standard label that identifies substantiated green certifications. Under the EmpCo Directive (EU 2024/825), green labels in scope  must be verifiable, use explicit clear language, cannot use “carbon neutral” or carbon offsetting language anymore, and all labels must be third-party certified.

Examples include:

• Prioritize recycled, renewable, or lower-impact materials where feasible.
• Reduce unnecessary packaging or specify recyclable materials. Reference established standards such as the Global Recycled Standard (GRS) for recycled content, Forest Stewardship Council (FSC) for wood and paper, and Global Organic Textile Standard (GOTS) for textiles.
• Require products to meet recognized sustainability certifications where relevant.
• Specify durability, repairability, or reuse to extend product lifespan. This can include circular design approaches such as physical durability and design for disassembly to support recycling.
• Establish energy efficiency requirements for purchased equipment and appliances.

Automate Climate Criteria in Procurement Systems and Incentivize Supplier Performance

After establishing a baseline and embedding climate requirements into RFPs and contracts, the next step is to incorporate climate into day-to-day procurement operations. The goal is to make sustainable procurement part of standard workflows, not a separate process.

This can be supported by digital procurement platforms that embed climate criteria across supplier selection, approvals, contracting, and purchasing. Applying consistent standards across business units and categories reduces manual effort, improves compliance, and ensures climate considerations are built into decisions. These tools also strengthen tracking and reporting to meet regulatory requirements and monitor progress against emissions goals.

Effective sustainable procurement goes beyond compliance by combining requirements with supplier support and incentives. This can include training, tools, and preferred supplier status to encourage emissions reduction. Collaborative engagement helps strengthen supplier relationships and uncover opportunities for lower carbon materials, processes, and technologies that deliver both cost and emissions benefits.

Procurement actions should ultimately align with organizational climate goals, prioritizing the levers that directly support targets such as emissions reduction, circularity, and resource efficiency, and embedding them into sourcing and supplier management practices.