Sustainability is more than just “something we have to do now”
How much energy does the product we are buying consume? Where do the raw materials come from, and can the packaging be recycled? What are the working conditions like in the supplier’s supply chain? Can the supplier back up its claims about emissions reductions with concrete data? These are no longer questions we ask just to tick a box. They are increasingly becoming an important part of supplier evaluation, procurement decisions and negotiations over the terms of cooperation.
ESG (Environmental, Social and Governance) covers the environmental, social and governance aspects of business. In procurement, these criteria complement the usual assessment of price, quality and delivery times. They also take into account production methods, working conditions, resource management and the supplier’s environmental and social responsibility.
But how can you assess whether sustainability claims are substantiated? A supplier may state in its bid that it uses environmentally friendly materials or operates responsibly, but that statement alone says little. Procurement teams need to understand what lies behind it and whether it can be verified through supporting documentation.
Below, we provide an overview of the ESG areas, examples of criteria for different types of procurement, and ways to verify suppliers’ responses to confirm that they meet ESG criteria.
1. What does ESG mean in day-to-day procurement?
ESG consists of three areas: environmental, social and governance. Each raises different questions when evaluating suppliers.
E – Environmental
Environmental criteria concern the environmental impact of a product, service or supplier’s operations.
Depending on what is being procured, factors to consider may include:
energy consumption during production and product use;
greenhouse gas emissions;
recycled material content;
packaging reusability and recyclability;
product durability and spare parts availability;
waste management practices;
use of renewable energy sources.
Practical example: procurement of computer equipment
A company is purchasing 100 laptops. In addition to price and technical specifications, it can compare the devices’ energy efficiency, repairability, spare parts availability, battery lifespan and warranty length.
A device with a slightly higher purchase price may prove more cost-effective if it consumes less energy, requires servicing less frequently and has a longer useful life.
Life Cycle Costing (LCC) is useful for this type of comparison. Alongside the initial purchase price, it considers the costs of use, maintenance, energy consumption and disposal.
S – Social: social responsibility
Social criteria concern the people involved in production, product delivery or service provision.
When evaluating suppliers, these may include:
employees’ working conditions;
occupational health and safety;
respect for workers’ rights;
equal opportunities and non-discrimination;
responsible treatment of subcontractors;
supply chain transparency.
Practical example: procurement of cleaning services
A company is looking for a supplier to provide cleaning services for its business premises under a multi-year contract. In addition to the quoted price, it can assess how the supplier organises the work, whether employees are trained for their tasks, whether they use appropriate protective equipment and which cleaning products they use.
This information helps assess how the service will be delivered in practice, beyond its cost.
G – Governance: responsible business management
Governance criteria concern transparency, ethics and how a supplier runs its business.
In procurement, the following are particularly relevant:
anti-corruption policies;
management of conflicts of interest;
business transparency;
data protection;
information and cybersecurity;
mechanisms for reporting misconduct;
supply chain risk management.
Practical example: procurement of IT services
When contracting for cloud data storage services, for example, a company needs to understand how the supplier protects data, manages user access, responds to security incidents and ensures service continuity.
In this case, supplier management is directly linked to data security and the company’s operations.
2. Which ESG criteria should be included in a tender?
A common mistake is trying to include as many ESG requirements as possible in every procurement process. Criteria that have no meaningful connection to what is being procured only add to the administrative burden and make bids harder to compare.
For example, when procuring office furniture, it makes sense to consider durability, repairability and the origin of materials. For transport services, fuel consumption, emissions and route optimisation are more relevant.
The choice of criteria should therefore be tailored to what is being procured.
Procurement category | Examples of ESG criteria |
Computer equipment | Energy efficiency, repairability, durability, recycled materials |
Office supplies | Recycled paper, responsible production, packaging |
Cleaning services | Environmentally friendly cleaning products, waste reduction, working conditions |
Transport and logistics | Fuel consumption, emissions, route optimisation |
Furniture | Durability, repairability, sustainable materials |
Food products | Origin, production methods, packaging and transport |
IT and cloud services | Infrastructure energy efficiency, data security, transparency |
Before including a requirement in a tender, it is useful to check whether it is relevant to what is being procured, how compliance will be demonstrated and whether it allows bids to be compared objectively.
In other words, every ESG criterion should serve a clear purpose in the procurement process.
3. Greenwashing in procurement: when does sustainability exist only on paper?
Greenwashing means presenting a product, service or business as more environmentally friendly than it actually is. Terms such as “green”, “eco-friendly”, “sustainable” or “natural” may appear in bids and business communications. While these descriptions sound appealing, without further information they reveal little about the actual environmental impact of the product or business.
According to a European Commission study on environmental claims, 53% of the claims analysed were vague, misleading or unfounded, while 40% lacked supporting evidence.
For procurement teams, this is an important reminder to verify marketing claims before using them as a basis for supplier selection.
What does greenwashing look like in practice?
Example 1: “Our products are 100% environmentally friendly.”
A supplier states in its bid that its products are entirely environmentally friendly but provides no documentation to substantiate the claim.
What should you check?
Which part of the product does the claim refer to?
Is there documentation on its composition and production methods?
What data was used to assess its environmental impact?
Example 2: “We use 100% recycled packaging.”
Further checks reveal that the claim applies only to the outer cardboard box, while the internal protective packaging and other components are made from non-recycled materials.
What should you check?
Does the claim apply to all packaging or only to certain components?
What is the actual proportion of recycled material?
Is there technical data or documentation to support the claim?
Example 3: “Our delivery is carbon neutral.”
The supplier states that its delivery is carbon neutral but does not explain how it calculates emissions, what measures it takes to reduce them, or whether it uses carbon offset programmes.
What should you check?
Is data available on transport-related emissions?
What measures are being taken to reduce them?
If carbon offsetting is used, how is it carried out?
Example 4: “We have an ESG strategy and operate sustainably.”
The supplier presents its ESG strategy but does not specify concrete targets, deadlines, or results that would allow progress to be assessed.
What should you check?
What targets have been set?
What are the timelines for achieving them?
How is progress towards these targets monitored?
Is data available on the results achieved so far?
In all these situations, the issue is not necessarily the claim itself, but the lack of information to support it. Procurement teams should therefore request sufficiently specific data to assess what the supplier actually offers.
4. How can you verify suppliers’ ESG claims?
Procurement professionals do not need to be experts in every area of sustainability. However, they should know what information to request, how to compare it, and when the documentation provided is insufficient.
In practice, the assessment can be structured into several steps.
1. Ask for specific data rather than general statements
The question “Is your business sustainable?” is unlikely to yield an answer that is useful for comparing bids.
It is better to request specific information, such as:
What proportion of the product is made from recycled materials?
What is the annual energy consumption?
Is data available on emissions associated with production?
How long are spare parts available?
How are workplace safety and the quality of working conditions monitored?
The more precise the questions, the easier it is to assess the responses provided.
2. Check documentation and certifications
Certifications and independent labels can help assess suppliers, but it is important to understand what each document actually confirms.
Examples include:
ISO 14001 – an environmental management system;
ISO 45001 – an occupational health and safety management system;
ISO 27001 – an information security management system;
EU Ecolabel – a European label for products and services that meet specific environmental criteria.
For example, ISO 14001 certification confirms that an organisation has an environmental management system in place. It does not automatically mean that every product it offers is more environmentally friendly than competing products.
When reviewing documentation, pay attention to its validity, scope, and applicability.
3. Compare suppliers using the same criteria
If you request detailed emissions data from one supplier but accept only a general sustainability statement from another, their responses will not be comparable.
Standardised criteria and questionnaires make assessment easier because all suppliers answer the same questions. This reduces subjectivity and makes it easier to incorporate the results into the evaluation.
4. Monitor performance throughout the business relationship
Supplier assessment should not end once a supplier has been selected. A supplier may present ambitious targets when entering into a contract, but only ongoing performance monitoring will show whether those targets are being met.
Zato je korisno unaprijed definirati koje će se informacije i pokazatelji pratiti, koliko često će ih dobavljač dostavljati i kako će se provjeravati ispunjavanje dogovorenih obveza.
5. ESG questionnaires: how can you collect information from suppliers?
When an organisation works with a large number of suppliers, collecting ESG data through individual emails and different forms quickly becomes difficult to manage.
A standardised ESG questionnaire, or Supplier Audit Questionnaire (SAQ), enables information to be collected using predefined questions. This allows the organisation to apply a consistent approach to supplier assessment and compare responses more easily.
Below is an example of a basic questionnaire that can be adapted to the procurement category.
Area | Example question |
Environment | Has the organisation set targets for reducing energy consumption? |
Emissions | Does the organisation monitor its greenhouse gas emissions? |
Waste | Are procedures in place for waste sorting and disposal? |
Materials | Are recycled or more sustainable materials used? |
Social responsibility | Are employee health and safety policies in place? |
Working conditions | How is respect for workers’ rights monitored throughout the supply chain? |
Governance | Is an anti-corruption policy in place? |
Security | How are data protection and information security managed? |
This is an initial set of questions, and the questionnaire can be expanded to include additional questions.
6. How does digitalisation make it easier to manage ESG requirements?
Collecting responses from suppliers is only the beginning. The next steps involve checking documentation, comparing data, recording certifications, and monitoring agreed obligations.
When each of these tasks is handled separately, information can easily become scattered across emails, spreadsheets, and folders. Procurement teams then spend time locating documents instead of analysing them.
A procurement management system can bring many of these activities together.
With Ensolva, you can:
Centralise supplier data and documentation;
Use standardised SAQ questionnaires to collect ESG information;
Record certifications;
Compare submitted information and documentation;
Evaluate bids against predefined criteria;
Monitor contractual obligations throughout the contract term;
Maintain an overview of supplier documentation and status.
For companies working with a large number of suppliers, having all collected information in one place is particularly useful. This makes it easier to identify missing documents, certificates approaching expiry, or the need to request additional data.
In this context, digitalisation helps connect supplier assessment with other procurement activities and makes information more accessible throughout the business relationship.
7. Sustainable procurement starts with well-defined criteria
Incorporating ESG requirements into procurement makes sense when they are based on the company’s specific needs and the goods, services, or works being procured.
When defining criteria and assessing suppliers, three things should be considered:
Relevance – choose criteria related to the product, service, or risks that procurement aims to address.
Verifiability – request specific data, documentation, and evidence that suppliers can use to support their claims.
Continuity – monitor progress towards agreed targets and compliance with obligations throughout the business relationship.
Collecting certifications and completing questionnaires are important parts of this process, but they alone do not provide enough insight into a supplier’s actual performance. Knowing how to ask the right questions is essential.
Good procurement therefore means choosing the supplier that can demonstrate what it has actually achieved, rather than the one that markets sustainability most effectively.
