As organizations face mounting pressure to demonstrate progress on environmental goals while navigating geopolitical shifts, procurement is stepping up. Unlike years past, today’s procurement teams have secured their seat at the executive table, supported by stronger internal alignment and more strategic supplier partnerships.
Yet a curious trend has emerged: many companies are pursuing environmental, social, and governance (ESG) goals more discreetly, a phenomenon known as “green-hushing.” In fact, PwC found that while some companies have pulled back, about 84% are either maintaining or strengthening their climate commitments, even as they become less vocal about them. This demonstrates that despite shifting political winds, businesses recognize that sustainability initiatives remain fundamentally good for business.
A comprehensive study sponsored by SAP and conducted by Economist Impact confirms this shifting landscape, revealing growing confidence in procurement’s capacity to deliver on ESG performance indicators. While risk factors are rising, so is readiness—a shift that is especially encouraging for procurement executives overseeing ESG performance. The data shows approximately 90% of respondents report strong internal collaboration between procurement and other departments, up from 75% last year.
The external picture is equally promising: over 90% of executives report that deeper supplier partnerships are yielding benefits, particularly in driving innovation and sustainability outcomes. For procurement leaders, the data tells a clear story: collaboration may be the new currency of success.
Collaboration: The silent engine of progress
Procurement’s strategic influence is expanding through tighter integration with internal stakeholders. As teams become more embedded across business functions, they’re unlocking new value through improved orchestration and proactive planning. Specialized business partner groups that bridge strategy and execution are helping meet cross-functional needs.
This enhanced collaboration has yielded key benefits, including cost savings (74%) and improved digital adoption (61%). However, a gap remains between these immediate gains and longer-term value drivers like innovation and agility. As procurement operations continue to digitize, talent development must adapt. AI proficiency and ethical technology have emerged as the top skill priorities for procurement hires over the next 12-18 months (68%), followed by sustainability expertise (55%).
What is the state of the procurement function and how will technology shape its operating model?
Enabled by digital tools that deliver “360-degree visibility,” procurement executives are seeing alignment between category strategies and broader enterprise objectives, helping them spot risks, understand market shifts, and manage supplier performance more effectively.
Supplier partnerships: Accelerating ESG progress and innovation
Forward-thinking procurement organizations are now partnering with suppliers to introduce solutions like recyclable packaging, greener materials, and low-emission logistics. These collaborations are accelerating decarbonization efforts while helping future-proof supply chains.
Despite decreased governmental prioritization of sustainability in some regions, smart companies continue pursuing ESG goals when they align with business objectives. Nearly half (48%) of executives report improved sustainability performance from closer supplier ties, and 38% cite more supplier-driven innovation.
Many procurement teams are navigating uncertainty around their ESG approach, questioning whether to lead sustainability initiatives boldly or keep their efforts under the radar amid regulatory shifts. Regardless of this strategic tension, the value of supplier collaboration remains undeniable, particularly as these efforts often improve operational efficiency and reduce costs.
Procurement can strengthen this momentum by investing in platforms that track emissions, monitor regulatory developments, and support compliance. Many organizations are expanding efforts to address Scope 3 emissions—typically the most challenging to measure—with increasing sophistication around supplier data collection and performance expectations. This shift reflects increased accountability across the value chain and reinforces procurement’s pivotal role in advancing ESG objectives.
While public sentiment and political consensus may fluctuate, regulators continue to advance mandatory disclosure requirements and climate accountability measures. Preparation is especially urgent as new policies—from the EU Corporate Sustainability Reporting Directive to Germany’s Supply Chain Due Diligence Act—impose stricter requirements on businesses.
Even if some regulations face delays or deprioritization, they are not disappearing. Organizations that act now will be best positioned to lead when enforcement inevitably intensifies.
Meeting elevated standards through supplier collaboration
The evolution of procurement’s influence rests on one fundamental capability: collaboration.
Internally, effective collaboration drives digital adoption, reduces costs, and breaks down organizational silos. Externally, it powers sustainability initiatives and fosters innovation. Without it, even the most sophisticated ESG strategies risk faltering. Poorly structured collaboration leads to critical data gaps, duplicated effort, and supplier fatigue. Today’s procurement executives must ensure their ESG and risk management approaches don’t overburden suppliers, or they risk disengagement precisely when long-term innovation is needed most.
Increased collaboration is consistently cited as the primary driver of accelerated ESG progress. Maintaining this momentum requires balance: bold action tempered by operational pragmatism, and clear expectations paired with tools that support supplier compliance and success.
Procurement’s moment of opportunity
Procurement is uniquely positioned to translate sustainability ambitions into measurable, scalable outcomes. By fostering collaboration across business units and with suppliers, it can shape the future of responsible business.
Even when ESG ambitions are pursued discreetly, the business case for action remains compelling—both for organizational performance and broader societal benefit. Companies that maintain sustainability initiatives despite changing political priorities position themselves advantageously for the future while capturing immediate operational benefits. Procurement’s ability to embed sustainability considerations into core decisions consistently and collaboratively will define its impact in the years ahead.
SAP Ariba solutions can integrate seamlessly with SAP Sustainability Footprint Management and SAP Sustainability Data Exchange to help businesses better track, manage, and reduce their environmental impact across the supply chain. These solutions can enable organizations to incorporate sustainability metrics into procurement decisions, improve transparency with trading partners, and help ensure compliance with evolving environmental regulations.
Many of the insights above were explored during the following Economist Impact webinar, “Measuring up: Balancing risks and goals for strategic procurement.” To delve further into these topics and hear expert perspectives, watch the webinar replay on demand. For those eager to continue the conversation and engage directly with leaders in the field, the upcoming SAP Connect event—October 6-8 in Las Vegas, Nevada—offers an excellent opportunity to join on-site and gain deeper insights into strategic procurement, ESG initiatives, and innovation. Register today.
Baber Farooq is senior vice president and head of Market Strategy for SAP Ariba.
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