Green Procurement – An Inevitable Trend in the Global Supply Chain

Choosing suppliers, materials, packaging, and production processes based on environmentally friendly criteria not only reduces carbon emissions but also enhances brand image, attracts investment, and ensures compliance with stringent international market regulations.

Definition and Green Procurement Standards
Green Supply Chain Management (GSCM) is a method of integrating environmental factors into every stage of the procurement process within the supply chain. From selecting suppliers that use renewable energy, prioritizing recyclable materials, eco-friendly packaging, and low-emission manufacturing processes—all contribute to a “greened” supply chain.

According to international standards like ISO 20400 on sustainable procurement or the Global Reporting Initiative (GRI), businesses must evaluate not only supply capacity but also environmental impact, social responsibility, and transparent governance of their suppliers. Integrating green criteria into supplier evaluation systems is increasingly becoming a mandatory requirement, especially in sectors like electronics, fashion, automotive, and food.

Barriers and Solutions
Despite its vast potential, implementing GSCM faces practical challenges. Firstly, there are initial investment costs, as eco-friendly materials and processes often come at a premium. Secondly, there is a lack of transparent information from suppliers, especially in developing countries where environmental standards are inconsistent. Lastly, internal resistance persists when purchasing departments still prioritize “low cost” over “sustainable value.”

However, many pioneering businesses have proven that investing in green procurement yields long-term benefits. Utilizing tools like Life Cycle Assessment (LCA), setting up green KPIs, and negotiating long-term contracts with environmentally friendly suppliers help enterprises overcome cost barriers and enhance supply chain transparency.

Implementing any GSCM practice requires commitment from leadership—because it is the executive team who shapes the long-term vision, allocates resources, and leads organizational transformation.

Green Business Models
In Europe, supermarket chain Lidl and manufacturer Unilever have integrated carbon footprint criteria into their procurement systems. Suppliers with low emissions, recycled packaging, and organic certifications are given priority and awarded larger contracts. In Asia, companies like Samsung and Toyota have shifted toward sourcing components from suppliers using clean energy and evaluating ESG criteria when ranking strategic partners.

In Vietnam, many seafood and garment exporters are switching to suppliers offering recycled packaging, organic fabrics, and eco-friendly inks to meet standards from European and American clients. These changes not only improve ESG scores but also expand market access.

Choosing suppliers based on low carbon emission criteria is not only a demonstration of environmental commitment but also brings clear and tangible financial benefits. Businesses that apply this criterion in their procurement processes have reported significant cost savings by reducing waste treatment needs, saving energy, and minimizing legal risks related to environmental standards.

In addition, by partnering with environmentally friendly suppliers, businesses can more easily obtain international ESG certifications, thereby enhancing brand credibility and expanding access to global markets. This demonstrates that investing in a low-carbon supply chain is not merely a necessary expense but a strategic lever for improving operational efficiency and long-term competitiveness.

More importantly, companies are gradually realizing that 'environmental costs'—if not invested in early—will turn into 'crisis management costs' later on, ranging from returned shipments and loss of international certifications to brand boycotts.

Green procurement is not just an act of environmental responsibility, but a win-win model between profitability and sustainable development. Enterprises that invest wisely in GSCM not only reduce risks but also enhance brand value, optimize product life cycle costs, and expand their export markets.

In a context where ESG is increasingly measured, audited, and expected to be transparent, companies cannot remain outside the green supply chain movement. Leaders who shift their procurement mindset from “lowest price” to “most sustainable value” will be the ones shaping the future—not only for their businesses but for the global green economy.

By Van Tam