Sustainability in Procurement has Become a Strategic and Legislative Imperative for US Businesses
Published on May 28, 2025 in Strategic
April 22 marked the one year anniversary of the Biden-Harris Administration finalizing the Federal Acquisition Regulation on Sustainable Procurement. This groundbreaking mandate demands that federal agencies prioritize American-made sustainable products in their procurement choices. The directive is core to fostering environmentally responsible supply chains and to achieving net-zero emissions from federal procurement by 2050.
This policy forms a backdrop to a broader trend that goes beyond government contracting and extends to businesses across the US. Slowly but surely, sustainability in procurement is shifting from a peripheral concern to a core strategic consideration.
The latest Global Chief Procurement Officer Survey from Deloitte shows that 85 percent of companies recognize the importance of sustainable procurement. However, only 46 percent have sustainable practices fully embedded in their procurement processes. Clearly, closing this gap between awareness and action is an increasingly important priority, especially as environmental concerns and regulatory pressures continue to intensify.
The Rising Importance of Sustainable Procurement
Sustainable procurement is more than another regulatory hurdle to be negotiated, however. It is a critical lever that can help a business to achieve long-term environmental, social, and economic resilience by integrating ESG considerations into purchasing decisions. That’s something that US businesses cannot afford to ignore, as in addition to the regulatory factors, consumers are placing sustainability concerns ever higher and expect the businesses they use to take a responsible approach.
Procurement decisions also have a direct impact on a business’s carbon footprint, affecting everything from emissions to waste to resource depletion. In fact, data from the CDP shows that as much as 90 percent of an organization’s greenhouse gas emissions can be traced to its supply chain. Sourcing from environmentally responsible suppliers and prioritizing circular economy principles can significantly a business’s carbon footprint and improve its environmental impact.
Organizations that embrace sustainable are more resilient to business risks through stronger supplier relationships and can reduce their long-term costs. A 2023 research paper by McKinsey shows that companies with strong ESG performance outperform their peers in terms of both profitability and shareholder returns.
Moreover, sustainable practices are increasingly important to promote investor confidence and customer loyalty. A remarkable 80 percent of consumers prefer to purchase products from companies with sustainable procurement practices, and almost 70 percent are willing to pay a premium in order to do so. For the first time, sustainability is now in the top five considerations that influence purchasing decisions.
| Quality |
| Price |
| Brand trust |
| Convenience / speed |
| Sustainability and ethics |
| Peer reviews / recommendations |
| Payment flexibility |
| Data privacy and security |
| Economic factors and uncertainty |
| Personalization |
Table 1:Top 10 Consumer Concerns When Making a Purchase
But beyond all that, everyone has an ethical obligation to do the right thing. Sustainable procurement is about making sure suppliers adhere to fair labor practices, workplace safety standards, and ethical sourcing, all of which can suffer from inconsistent oversight in today’s globalized supply chains. Our procurement choices can shape outcomes in relation to human rights, diversity and inclusion – factors that go beyond the bottom line.
Barriers to Implementation
The data cited in the Deloitte report demonstrates that while the vast majority of US businesses understand the importance of sustainable procurement, most are still some distance from having fully implemented such practices. So what are the barriers that are preventing intent from becoming decisive action?
Change is never easy, especially in mature organizations with established practices. Deloitte asked 350 procurement leads to identify the three biggest barriers to implementation, and the top ten are distilled and summarized in Table 2.
| Barriers to implementation | Cited by (%) |
| Conflicting priorities | 41 |
| Inadequate technology | 41 |
| Talent capacity | 36 |
| Skillset | 36 |
| Insufficient organizational support | 25 |
| Change management capability | 23 |
| Lack of funding | 22 |
| Lack of business-wide holistic approach | 20 |
| Insufficient functional support | 14 |
| Insufficient c-suite support | 9 |
Table 2
In addition to these internal barriers, an Amazon Business’s 2024 State of Procurement Report found that even with all the necessary infrastructure and support in place, 85 percent of procurement professionals experience difficulty in identifying suppliers that conform to sustainable practices, and cite this as a barrier to achieving strategic sustainability goals.
The scarcity of suitable supply chain partners complicates efforts to align procurement strategies with broader ESG initiatives and compounds the difficulty.
Overcoming the Barriers
As sustainable procurement practices become ever more imperative, businesses are investing more time, money and expertise into overcoming the roadblocks. Some of the core strategies are summarized in Table 3.
| Challenge | Strategy | Methodology |
| Difficulty finding sustainable suppliers | Supplier development and collaboration | Partner with suppliers to build ESG capacity, offer training, and set mutual sustainability goals. |
| Sustainability not embedded in policy | Embed sustainability in procurement policy | Integrate ESG criteria into RFIs, RFPs, contracts, and procurement KPIs. |
| Conflicting internal priorities | Cross-functional alignment | Align sustainability goals across departments to reduce friction and unify procurement efforts. |
| Inadequate technology | Invest in procurement technology | Upgrade to modern procurement platforms that support ESG tracking, analytics, and collaboration. |
| Talent capacity | Workforce planning & capacity building | Allocate resources to ensure teams are properly staffed and supported for ESG-focused procurement. |
| Skillset gaps | Targeted training & upskilling | Provide ESG-specific training to procurement team, focus on sourcing, reporting, and supplier engagement. |
| Insufficient organizational support | Internal stakeholder engagement | Educate stakeholders on sustainability ROI and tie procurement to business-wide ESG goals. |
| Change management capability | Structured change management approach | Apply formal change management frameworks (eg. Kotter, ADKAR) to support ESG adoption. |
| Lack of funding | Link ESG to business value | Justify budgets through risk reduction, regulatory compliance, and brand reputation benefits. |
| Lack of a holistic business-wide approach | Develop unified ESG strategy | Create a cross-departmental sustainability roadmap aligned with procurement objectives. |
| Insufficient functional support | Cross-functional ESG task forces | Form sustainability working groups with input from finance, legal, operations, and IT. |
| Lack of visibility into ESG performance | Leverage digital tools & AI | Use digital platforms to track supplier ESG metrics, automate reporting, and identify risks. |
| Insufficient C-suite support | Executive education & strategic alignment | Share data and case studies with leadership to build executive-level buy-in and sponsorship. |
Table 3
Let’s look at some of these key areas in more detail:
Supplier development
The Amazon Business report mentioned that even when sustainability criteria for suppliers are adequately defined and understood, identifying and engaging with suppliers who meet those criteria is one of the most significant obstacles. A way of addressing this is by creating long-term partnerships with suppliers and then helping them to develop their own sustainability capabilities through training. In this way, the business and its suppliers can develop together. Clearly defined objectives, supplier scorecards and sustainability audits all help to foster trust and to track progress.
Using digital tools and AI
Digital platforms and emerging technologies like generative AI can be invaluable in optimizing supplier selection and monitoring ESG performance. According to a recent press release from Gartner, some 60 percent of organizations will use AI to support their sustainability strategies by 2026. Procurement teams can use these tools to analyze supplier risk, automate ESG reporting, and assess lifecycle impacts more efficiently.
Embedding sustainability into procurement policies
With the best will in the world, unless something is embedded in policy, it is doomed to fail. Success begins with making sure procurement policies and sustainability goals are in alignment. This means setting clear ESG criteria for vendor selection, embedding sustainability metrics into RFIs and RFPs, and tying procurement KPIs to broader corporate social responsibility targets.
Securing management buy-in
Lack of support was a topic that came up time and again in Table 2, from other business functions and executive management. When sustainability is championed at the highest level, it transforms with almost magical rapidity into a company-wide priority. Senior leadership can then ensure that support trickles down through other business functions such as IT and people management, as well as providing the necessary budgetary resources, policy alignment and generally driving the necessary cultural shift that is needed to permanently embed sustainability through the procurement lifecycle.
In Conclusion
Sustainability in procurement is no longer a “nice to have” or an option reserved for green businesses. It has become a strategic imperative that offers specific and significant benefits, from cost savings and risk reduction to enhanced brand value and compliance with evolving regulations.
Those US organizations that proactively embrace sustainable procurement practices will be better positioned to meet stakeholder expectations, drive innovation, and achieve long-term success in a business landscape that is evolving with ever-increasing velocity.
Sources
https://normative.io/insight/upstream-downstream-emissions
https://worldmetrics.org/sustainability-in-procurement-statistics
https://procurementtactics.com/sustainable-procurement-statistics