Harvard Says Sustainability Will Transform Business Like Digital Did. Most Procurement Teams Haven't Noticed.
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The Challenge
Earlier this year, Harvard Business Review made a claim that should have landed harder than it did.
“Fulfilling sustainability commitments will require companies to transform their business models to a degree that matches, or even surpasses, the transformation triggered by digital and AI technologies.”
— Harvard Business Review
Not a new reporting framework. Not a bigger sustainability team. Not a more polished ESG disclosure. A transformation on the scale of the digital revolution.
Most procurement teams are still scheduling that conversation for later. Later is becoming an increasingly expensive strategy.
The Question That Is Costing Organisations More Than They Realise
Most procurement decisions still begin with one question: “What is the cheapest option?” It feels rational. It is measurable. It is easy to defend in a budget meeting.
But cheaper packaging creates waste downstream. Cheaper materials increase operational and reputational risk. Cheaper suppliers reduce transparency at precisely the moment regulators are demanding more of it. Cheaper products carry hidden environmental costs that reappear, in remediation, in compliance, in customer trust.
The organisations creating the most value today have replaced that question with a better one: “What creates the greatest long-term value?”
That single shift in framing is where sustainable procurement begins, and where the competitive advantage starts to compound.
The Companies That Figured This Out First
This is not a theory. It is already happening, in some of the most carbon-intensive industries on earth.
Enel
Committed to the renewable energy transition in 2014, before solar was economically viable at scale. Rather than waiting, they accelerated it, creating Enel Green Power as a distinct unit with the mandate to make clean energy commercially viable. Sustainability did not constrain their growth. It became the engine of it.
Holcim
The Swiss cement giant, divested operations where sustainability was not a viable strategy, realigned its financing entirely around sustainability objectives, and became the first global building-materials company to commit to Science-Based Targets for 2030. They are now investing 2 billion Swiss francs in transformational technologies, including bridges 3D-printed entirely from recycled materials.
Suzano
Brazil's paper and pulp company, went further still, merging its innovation and sustainability divisions into a single function. Not as a structural experiment. As a strategic statement: sustainability is not adjacent to innovation. It is the same work.
The lesson from all three is consistent: the companies treating sustainability as a business model driver are outperforming the companies treating it as a reporting obligation.
Why Procurement Is The Most Underused Lever In This Transition
Procurement influences carbon emissions, waste generation, material choices, packaging design, supplier behaviour and circularity opportunities, often accounting for the majority of an organisation's total environmental impact.
For companies like Schneider Electric, Scope 3 emissions, those generated across the supply chain upstream and downstream, represent more than 99% of their total reported emissions. Procurement decisions are, in effect, sustainability decisions.
And yet procurement teams are routinely brought into sustainability conversations after strategy has been set, suppliers contracted and packaging designed. This is the wrong sequence.
Sustainability embedded at the procurement stage is preventative. Sustainability applied after the fact is remedial, and significantly more expensive.
The Three Tensions Every Leadership Team Must Navigate Honestly
The HBR research identified something that rarely gets discussed openly: the path is not linear, and pretending otherwise sets organisations up to fail.
Long-term vision vs short-term targets.
Sustainability investments rarely fit standard ROI timelines. The organisations succeeding are building portfolios, scaling what works now, investing in what will work next, and exploring what could be transformative. They are not demanding immediate financial return from every sustainability decision.
Practical implication: Review your procurement KPIs. If every metric rewards the cheapest option today, your incentive structure is working against your sustainability strategy.
System-wide change vs local engagement.
Central mandates do not land at the local level without ownership. Holcim's Plants of Tomorrow programme succeeded because it empowered plant managers to identify their own challenges, breaking the assumption that raising a problem means being solely responsible for solving it.
Practical implication: Identify who in your organisation is closest to the sustainability problem. Give them the mandate and the support to surface it, separately from the expectation that they must also solve it alone.
External collaboration vs internal capability.
The cleanest technologies and most innovative sustainable materials are often being developed outside large organisations, in startups, research institutions and supplier networks. The pioneers are building structured access to that external innovation rather than waiting for it to arrive through existing channels.
Practical implication: Map where your sustainable sourcing gaps are. Then ask whether the solution exists internally, or whether the faster path is a verified external partner.
Five Questions Every Procurement Team Should Be Asking
These are not aspirational questions. They are the questions the most commercially rigorous procurement teams are already asking, and the absence of clear answers is itself a risk signal.
Is this the cheapest option or the best option?
Lowest purchase price and lowest total cost are not the same thing. Build lifecycle value into your evaluation criteria before the decision is made, not after.
What is this product made from?
Material choices drive cost, performance, waste and regulatory exposure simultaneously. Understanding your material inputs is no longer optional. It is a compliance requirement in many markets and a commercial differentiator in all of them.
What happens after use?
If you cannot answer this question about your core products and packaging, your EPR liability is likely already underestimated. Design for end-of-life before your regulator requires it.
What evidence supports the sustainability claim?
Third-party certification and verified data are replacing marketing language as the standard. The organisations building supplier relationships around evidence now will have a significant advantage when regulations tighten, and they will tighten.
Could this be designed better from the outset?
The most significant sustainability gains come from redesign, not substitution. The time to ask this question is before the specification is fixed, not after the contract is signed.
What Separates Thought Leadership From Good Intentions
There is a version of sustainable procurement that looks good in an annual report and changes very little in practice.
And there is a version that redesigns incentives, embeds sustainability into evaluation criteria, builds supplier relationships around verified evidence, and treats procurement as a strategic function rather than an administrative one.
The difference is not ambition. It is whether the questions above are being asked, consistently, early, and with the authority to act on the answers.
The organisations that will define the next decade of their industries are not waiting for regulation to force the change. They are using procurement as a deliberate lever for innovation, resilience and competitive advantage, because they understand that every purchase decision is, in effect, a vote for the kind of supply chain you want to depend on in ten years.
At Circolis, we help procurement teams move from sustainability as intention to sustainability as practice, through verified suppliers, certified products and a Sustainability Passport framework built for commercial rigour, not just reporting.
Because the goal is not to buy differently for its own sake. The goal is to build businesses that last.