Driving Sustainability Through Smarter Procurement in Healthcare

Efficient supply chain and procurement management play a critical role in promoting sustainability and transparency within healthcare organizations. By implementing sustainable procurement strategies, healthcare providers can unlock new business opportunities and stronger supplier relationships while also improving patient outcomes.

With the right approach, a sustainability program can lead to significant cost savings—for example, by consolidating suppliers, minimizing delivery frequency, and replacing manual, paper-based processes with digital solutions. Hospitals that switch to electronic procurement systems, for instance, reduce both administrative overhead and environmental waste.

The Value of Transparent and Sustainable Procurement

Establishing strong procurement practices not only ensures compliance with sustainability goals but also enhances visibility, allowing organizations to track purchasing activities and demonstrate environmental responsibility to patients, regulators, and partners.

However, in many organizations—especially within healthcare—environmental strategies often take a back seat to cost-cutting measures. Yet, with growing awareness around climate change and public health, sustainable procurement is regaining importance. A hospital's carbon footprint, waste generation, and energy consumption directly affect both the environment and community health.

For example, a healthcare network that sources eco-friendly medical supplies and reduces unnecessary transport not only lowers emissions but also boosts its public image and community trust.

Sustainability and Reputation Go Hand in Hand

As seen in recent public backlash over unethical business practices—such as tax evasion or supply chain violations—a single misstep can lead to reputational damage and financial loss. In today's age of real-time, social media-driven communication, healthcare organizations must maintain ethical and sustainable practices to safeguard their brand and retain public confidence.

Transitioning to sustainable procurement requires a shift in mindset and operations. Existing supplier agreements need to be re-evaluated based on environmental performance, and staff may need to adapt to new processes and expectations.

Balancing Sustainability with Practical Needs

One challenge for organizations is balancing environmental goals with staff productivity. For instance, some hospitals may encourage staff to use trains instead of planes for regional travel (300–400 km) to cut emissions. While beneficial for the planet, such policies might reduce efficiency or morale if not managed carefully.

Therefore, procurement decisions in healthcare should no longer rely solely on price, speed, and quality. Instead, sustainable procurement considers the total lifecycle cost—including long-term environmental, social, and economic impacts.

Example: Choosing surgical instruments from a vendor that uses recyclable packaging and energy-efficient manufacturing—even at a slightly higher price—may reduce long-term waste disposal costs and support greener industry practices.

Sustainable Procurement Is Not Always More Expensive

The good news is that eco-friendly practices are not necessarily more expensive. In fact, many healthcare institutions have found that sustainable procurement delivers value across three key areas:

• Cost reduction through fewer deliveries, digitization, and energy savings

• Risk reduction by ensuring regulatory compliance and minimizing environmental impact

• Revenue growth from enhanced reputation, new partnerships, and community trust

Example: A hospital that partners with local eco-certified suppliers may benefit from shorter delivery times, lower transport costs, and access to government grants aimed at supporting green initiatives.

Additionally, sustainable strategies often yield broader social benefits such as improved public health, new training and apprenticeship programs, and support for small and diverse suppliers.

How Sustainable Procurement Differs from Traditional Practices

Unlike traditional procurement, which often prioritizes price and availability, sustainable procurement evaluates suppliers' environmental credentials, delivery methods, and packaging policies. It also looks for opportunities to bundle purchases and reduce emissions.

Example: A clinic can consolidate monthly orders of personal protective equipment (PPE) instead of placing weekly requests, thereby reducing packaging waste and delivery emissions.

Organizations can also track performance metrics such as:

• The number of contracts awarded to small or local businesses

• Supplier certifications for environmental and social responsibility

• Reduction in waste and carbon emissions over time

Overcoming Challenges:

Standardization and Control

One of the biggest challenges to achieving sustainable procurement is the lack of standardized processes and monitoring systems. Many healthcare facilities have limited visibility into their supply chains and weak enforcement of procurement policies.

There's little value in designing a sustainability-focused strategy if staff can bypass controls and the system cannot measure progress or track benefits. Moreover, few universally accepted green accreditations exist outside sectors like food, making supplier evaluation difficult.

Thus, healthcare organizations must develop their own procurement standards, supplier questionnaires, and performance metrics.

Start with a Strong Procurement System

For hospitals or clinics without a robust procurement process in place, the first step is establishing centralized control and automation. Even without considering sustainability, this step alone typically results in cost savings and efficiency gains.

Immediate benefits include:

• Replacing paper invoicing with digital systems

• Consolidating orders and minimizing delivery frequency

• Reducing printing, storage, and stationery costs

Once the foundation is in place, organizations can conduct supplier audits and require responses to questions about environmental practices, packaging policies, and delivery logistics. This information helps identify the most sustainable vendors and creates leverage to renegotiate contracts for better terms.

Using Data for Strategic Advantage

Procurement systems can collect valuable data, such as ordering trends and delivery frequencies. Analyzing these trends provides insights into environmental performance and helps highlight improvements to stakeholders—from investors to healthcare regulators.

Example: A hospital may present data showing a 20% reduction in delivery-related emissions over six months due to consolidated ordering and eco-friendly supplier selection.

A Growing Imperative for Healthcare

Given national and global environmental targets, the focus on sustainable procurement will only grow in the years ahead. While adoption may still be in early stages for many healthcare organizations, this is not a change that can happen overnight.

However, with a strong procurement process and system, hospitals can start realizing immediate value today—financially, operationally, and reputationally.

As more institutions demand sustainability across their supply chains, those with well-defined processes and the ability to analyze behavioral trends will be better positioned to compete, comply, and thrive in a greener future.