These days, global sustainability is a hot topic. Everyone wants to do their part and ensure we act responsibly today for a better tomorrow. When online procurement tools came into popularity, sustainability meant saving trees. And today, by enabling customers to go paperless, BirchStreet has prevented an estimated 26,000 trees from being cut down annually.
The industry now faces a more complex challenge – understanding the sustainability landscape. It’s more than just saving the trees. It’s about stewardship of nature, relationships, and the constructs to ensure companies thrive while carrying out these interdependent responsibilities. According to CBRE’s 2023 global sustainability status update, hospitality customers and employees are driving prioritization of decarbonization initiatives, sound environmental stewardship, and responsible social policies and practices. So, where do you begin?
In the Beginning
First, let’s share where BirchStreet’s sustainability story began. When our first customer inquired how we could help them track sustainability, it sounded like an upstream battle. The Maritime Stewardship Council (MSC) Chain of Custody looks like this. A hotel orders sustainably sourced fish from a supplier. The supplier gets their fish from a local, sustainable fish farm. The fish farm receives the request and pulls the fish, tagging each with a sustainably certified identification number.
The fish farm then sends the fish to its shipping partner, who verifies the sustainably certified fish and identification. The fish is then shipped to the hotel, where it’s received on the dock, and its identification number is verified and logged.
The hotel can then run reports to understand their performance against pre-defined sustainability metrics and from which suppliers they’re performing the best.
The ability to track the fish throughout the chain of custody is a slippery problem to solve, let alone implement other aspects of sustainability. But it is possible. And rather than try and boil the ocean, the best place to take the plunge is by tagging the procurement system’s sustainable products.
Tagging many different products and suppliers with their correct sustainability attribution helps buyers identify which ones come from socially responsible sources by raising the priority of display when buyers search for what they need. Whether seafood, beverages, cleaning supplies, linens, services, or special guest requests, the system can help buyers make better decisions.
Different products, services, and suppliers have unique, sustainable, and socially responsible attributes. The ability to control what to show users is essential. Displaying items sourced from suppliers implementing fair labor practices or promoting inclusive practices is critical to driving higher social compliance. Flagging products from businesses implementing anti-corruption, human trafficking prevention, and transparency governance creates greater Governance compliance.
The GPO Advantage
If you’re unsure where to start and need a little help, consider leveraging Group Purchasing Organizations (GPOs). GPOs help you boost sustainability goals by providing a robust network of suppliers and products available within BirchStreet. Whether you’re looking for sustainable products, supporting diverse and minority-owned businesses, or those who focus on reducing carbon footprints and waste, GPOs can point you in the right direction.
Connecting the Dots
Whether you work with a GPO or directly manage your sustainability initiatives, BirchStreet’s Procure-to-Pay system can help. Suppliers are the backbone of BirchStreet, with a network of over 450,000 suppliers, many of which are committed to sustainability best practices. BirchStreet’s platform enables you to manage your sustainability initiatives by tagging sustainable sources and products, driving purchasing decisions, and increasing the success of your compliance program.
Research by McKinsey shows that procurement leaders who take bold action can make a decisive difference in sustainability. According to the firm, strong credentials drive down costs by 5 to 10 percent, as these companies focus on operational efficiency and waste reduction. Moreover, top sustainability performers enjoy faster growth and higher valuations than other players in their sectors by 10 to 20 percent in each case.
Finally, sustainability excellence reduces transition risk by helping companies stay ahead of changes in regulation and stakeholder sentiment. Hospitality brands that adopt sustainable procurement policies will also protect their reputation among eco-conscious travelers and employees and gain access to tax breaks and credits.
When we consider McKinsey’s report that two-thirds of the average company’s environmental, social, and governance footprint lies with suppliers, hospitality’s greener path forward reveals itself in a rather obvious fashion. To truly move the needle toward sustainable hospitality, it’s time for our industry to view sustainability not as a trend but as a business necessity and commit to more sustainable procurement practices.