CIPS: The Importance of Sustainability in Procurement

Procurement leaders are integrating sustainability into core operations as ESG metrics reshape supply chain strategy and business resilience.

Environmental, social and governance considerations are reshaping how organisations approach resilience and cost management. Supply chain leaders now find themselves responsible for implementing net zero targets alongside traditional procurement functions, according to the Chartered Institute of Procurement & Supply (CIPS).

The 2026 Global State of Procurement and Supply report, released by CIPS in association with Global Efficiency Partnership (GEP), examines how geopolitical instability and digital transformation are redefining the profession. The research highlights sustainability as a growing priority within supply chain strategy.

ESG moves to core metrics

Sustainability has moved beyond aspirational targets for procurement teams. According to the survey, ESG now ranks within the top five metrics used to evaluate suppliers across multiple sectors.

Procurement leaders are taking direct responsibility for net zero and science-based climate targets. This represents a fundamental shift towards sustainable business transformation becoming a core deliverable rather than an ambition.

Leaders now balance cost, resilience, risk and sustainability as interconnected measures of value. This integration could mean organisations view environmental performance as essential to operational excellence and long-term competitiveness.

Ben Farrell, Global Chief Executive of CIPS, explains: "In a world wrestling with multiple shocks and crises, the perspectives of the CEO and the procurement and supply chain leader are increasingly aligned. Fundamentally, both have a responsibility for resilience and competitiveness."

Technology enables environmental tracking

Digital tools are helping teams implement sustainability goals alongside efficiency measures. Predictive analytics and digital twins allow organisations to model environmental impacts before making procurement decisions.

According to CIPS, AI adoption varies by region. Australia and New Zealand show the highest levels of automation, while the UK and Ireland have adopted it the least.

Larger organisations are implementing technology more rapidly. IT and telecoms companies reveal the most automation, with 71% being at least partially automated, according to the report.

These tools provide visibility into supply chain emissions and resource use. Teams can identify opportunities to reduce environmental impact while maintaining cost control.

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Strategic influence grows

Supply chain professionals are finding themselves central to business planning. The past few years have demonstrated the importance of anticipating events rather than reacting to them.

Collaborative decision-making has replaced siloed approaches. Fragmentation and isolated data points are now viewed as risks to operational excellence.

Jonathan Kinghan, Senior Director of Consulting at GEP, adds: "Procurement has moved closer to the centre of the organisation, and this year's findings reflect that continued shift. This broader divergence is reflected in how procurement operates day-to-day. While procurement is more involved in decision-making than ever, the ability to consistently translate those decisions into outcomes remains uneven.

"The constraint is no longer visibility or insights; organisations can see risks, understand trade-offs and identify opportunities in real time. The challenge lies in turning that insight into action."

Investments in technology and people are becoming core drivers of procurement strategy. The increasing number of centre-led functions enables organisations to implement sustainability standards across supply networks.

Geopolitical volatility, trade route closures, the Covid-19 pandemic and tariff pressures have all contributed to disruption. These challenges have forced leaders to develop strategies that address multiple concerns simultaneously.

Rising prices and growing demand mean leaders need to do more with less. Risk management tools and new technologies are showing how sustainability, resilience and cost savings can be aligned.

Ben notes: "The stars are aligned for the profession to realise its full potential. Now it is time to lead."

The CIPS report highlights how ongoing conflict has changed roles within organisations. Risk mitigation and resilience have moved to the forefront of business strategy, with sustainability becoming part of that framework.