ISM World 2024: Sustainable Procurement is ‘Not Just About Doing Good’

The potential value of “Introduction to Sustainable Procurement,” a workshop at the ISM World 2024 Annual Conference at the MGM Grand in Las Vegas on Monday, was evident when one of the hosts conducted a casual poll of attendees.

Kenyatta Lewis, executive director of supplier diversity and sustainable procurement at MGM Resorts International, asked if companies have a sustainable procurement program or want to implement one. About half of the hands in the ballroom went up.

This informal finding was consistent with results in Institute for Supply Management^®’s 2024 Sustainability Survey, and companies that lag on sustainable procurement — given its increasing focus by consumers, investors and policymakers — could endanger their market shares.

“It’s not just about doing good; it’s about risk mitigation,” said Michael Gulich, vice president of sustainability at MGM Resorts. It’s also about driving innovation, cost effectiveness and business, a mindset that has made MGA Reports a leader in sustainable procurement.

The purpose of the workshop was to convey sustainability’s importance and share the strategies behind MGM’s three pillars: data collection and risk assessment, sustainable sourcing and supplier engagement. The issue is not going away, not with 72 percent of survey CPOs identifying environmental, social and governance (ESG) standards enhancement as a top enterprise priority in 2023, according to Deloitte research.

Michael Gulich, vice president of sustainability at MGM Resorts, speaks during the “Introduction to Sustainable Procurement” workshop at ISM World 2024 on Monday in Las Vegas.

“Environmental sustainability is usually top of mind when people think about sustainable procurement,” Gulich said. That’s true for MGM, which installed 15,000 square feet of artificial turf at one of its resorts to conserve water and reduced the amount of single-use plastic bottles for such room products as shampoo and body lotion by 27 million annually.

However, he added, at MGM, sustainability covers a breadth of issues like health and safety, anticorruption and responsible information management.

That includes diversity, Lewis said, adding that almost anything in a room at guest touches, from linens to luggage racks to bathroom supplies, was sourced from a minority or woman-owned business. And suppliers are critical to a sustainable procurement program; workshop speakers cited the cooperation of MGM’s vendors in a third-party analysis to find human rights risk in the supply chain.

“You can’t do sustainable procurement without suppliers offering their data for transparency, helping you understand how to comply with laws where they operate, and giving you insights on innovation,” said Matt Esper, senior manager of sustainability strategy at MGM Resorts. “And you’d be surprised that to gain this valuable information, usually all you have to do is ask.”

Don’t be afraid to start small, Gulich said. “Even using printer paper more responsibly can be the gateway drug to sustainable procurement,” he added.

Key Takeaways

• A company should define what sustainable procurement means to it, then develop clear goals and policies, especially a supplier code of conduct.
• Know the risks associated with priority commodities.
• Engage with suppliers — share the company’s sustainability goals and ask vendors about their existing programs.

Quote

“In procurement, nobody is a subject matter expert on sustainability. But we can partner with those that align with the sustainability goals of the company and help us strategize them into procurement. To put it simply, they tell me how to get it done, and I get it done.” — Lewis