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Compliance & Governance

ESG Procurement

Also known as: ESG

ESG procurement is the practice of factoring environmental, social and governance criteria into sourcing and supplier decisions alongside cost and quality.

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ESG procurement embeds environmental impact, social responsibility and good governance into how suppliers are selected and managed. Environmental factors include carbon footprint, waste and materials; social factors cover labour practices, safety and diversity; governance covers ethics, anti-corruption and transparency. Buyers weigh these alongside price, quality and delivery when making sourcing choices.

Organisations operationalise ESG through supplier codes of conduct, ESG questionnaires, scorecards and audits, and by reporting on the sustainability of their supply base. It overlaps closely with sustainable procurement but adds an explicit governance dimension and links to corporate ESG reporting. Reliable supplier data is essential to make ESG assessment credible rather than superficial.

Key points

  • Adds environmental, social and governance criteria to sourcing decisions.
  • Operationalised via codes of conduct, questionnaires, scorecards and audits.
  • Closely related to sustainable procurement and corporate ESG reporting.

Frequently asked questions

What is ESG procurement?
ESG procurement is factoring environmental, social and governance criteria into sourcing and supplier decisions alongside cost, quality and delivery.
How is ESG measured in procurement?
Common tools include supplier codes of conduct, ESG questionnaires, scorecards and audits, supported by reliable supplier data that feeds into corporate sustainability reporting.

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