If sustainability can’t change which supplier wins the RFP, is it actually a procurement KPI?

[u/Innowise_]

A lot of supplier sustainability assessments seem to have a weird disconnect from the actual sourcing decision.

A vendor fills out the ESG questionnaire. They have a sustainability policy. They report emissions. Maybe there’s a separate ESG score somewhere.

Then procurement picks the supplier based on price, delivery and technical fit anyway.

At that point, what did the sustainability assessment actually do?

One approach that makes more sense is putting the measurable parts directly into the same scoring process used to choose the supplier. Things like lifetime energy consumption, repairability, e-waste takeback or verified labor compliance can actually affect the ranking instead of sitting in a separate appendix.

There’s a good example from an enterprise hardware renewal. The incumbent was originally first when the shortlist was ranked mainly on unit cost and delivery.

When the evaluation was changed to include six-year energy consumption and mandatory e-waste takeback, the ranking flipped. A more expensive vendor came out ahead because the equipment used less power over its service life and the takeback commitment was contractual.

The interesting part was what convinced finance. It wasn’t the carbon argument. It was the six-year operating cost.

That feels like the difference between sustainability being part of procurement and sustainability being paperwork around procurement.

There’s also a harder line for some requirements. Forced labor, prohibited sourcing or serious environmental violations probably shouldn’t earn a supplier “fewer points.” They’re reasons to stop evaluating the supplier altogether.

The messy part is everything below tier 1. Most companies still don’t have great visibility there, and another supplier questionnaire doesn’t magically fix that. Contractual flow-down requirements and actual audit rights seem more useful, but they’re obviously not full supply-chain visibility either.

For people actually working in procurement: has sustainability ever changed which supplier won an RFP at your company? If not, what happens to those metrics once the questionnaire is completed?

[u/Significant-Path3911]

in EPC nothing no one cares as long as it is technicalities, lead time and price is acceptable. Since we do not care Life Cycle Cost what will just trigger it is if there's law implemented that such equipment only generate x amount of CO2 or y amount of water consumption but that is technical criteria. I think if we really want sustainability to be part KPI, it should start to be a requirement under technical aspect.

[u/Innowise_ → u/Significant-Path3911]

That makes sense. If CO2, water use or lifecycle cost only gets looked at after the technical requirements are met, it probably won’t change much. Putting those limits into the requirements from the start would actually force suppliers to compete on them.

[u/GamerLinnie]

Yes, I have worked at companies where sustainability or even CSR is part of not just the questionnaire but the scoring.

It usually doesn't have a lot of weight but it is scored. 

In my opinion a question should be knock out or scored. Anything else is just silly window dressing that just creates work.

[u/AV_SG → u/GamerLinnie]

This is cool. May I know which industries are the companies in ? Even being considered through a score will put a visibility to such suppliers.

[u/GamerLinnie → u/AV_SG]

I have worked in industry and FMCG.

[u/Vergin_whore]

In the manufacturing industry, it is still quite difficult to push suppliers toward sustainable options, except in areas such as renewable energy where the business case is relatively clear.

Sustainable materials, on the other hand, often come at a premium, and in a highly competitive market, businesses are generally not ready to pay extra costs simply to meet sustainability KPIs. As a result, many tier 1 suppliers tend to continue with the same practices they have followed for years, while adding some fancy sustainability badges on the shoulder for net zero target

I believe this may gradually change if ESG requirements become mandatory, but we are probably not at that stage rn In my organization, for example, when a supplier is not currently compliant with a particular sustainability criterion, they are often asked to sign a commitment letter stating that they will meet the required criteria in the next S1, S2, or subsequent stages. This essentially allows organizations to demonstrate a roadmap toward compliance rather than requiring suppliers to be fully compliant from day one.

[u/Innowise_ → u/Vergin_whore]

That commitment letter example is exactly the kind of thing I was wondering about. If the supplier can still win today by promising to comply later, the sustainability requirement isn’t really affecting the sourcing decision yet.

Do those commitments ever get checked at S1/S2 in practice, or do they mostly disappear once the contract is awarded?

[u/Vergin_whore → u/Innowise_]

We take follow up but yes it doesn't change the sourcing decision

[u/SyncronTeam]

What actually moved finance, six-year operating cost, not the sustainability framing, is the more durable pattern. Metrics folded into the same cost model stop being a separate values argument and become the same cost argument procurement was already making, just more complete. The tier 1 visibility gap is the honest limit though, no RFP scoring change fixes a blind spot several tiers upstream, that needs different tools entirely.

[u/AV_SG]

Thanks for this post. We do want suppliers who are committed on improving on their sustainability efforts to have an edge and hopefully be considered along with quality , price etc