Utilization of sustainability data in procurement decision-making

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School of Business | Master's thesis
Degree programme
Information and Service Management (ISM)
82 + 11
Large companies currently face significant stakeholder pressure to become more socially and environmentally responsible, while global warming and climate change are major challenges around the world. It is well-established that disregarding stakeholder demands would both negatively affect the company value and harm its overall image. Companies are now obligated to address how to solve their supply chain sustainability issues in making procurement decisions. This thesis was written for SaaS procurement analytics provider, with the purpose of assisting the company in better understanding greater scope of sustainability data and aiding in the further development of their sustainability analytics product. The objective of this research is to figure out what sustainability data can be used in procurement decision-making, and how it can be utilized. The research was carried out as a qualitative study with a multiple-case study design concentrating on large European and American companies. Six semi-structured interviews with professionals who are experts in procurement and sustainability were utilized to collect primary data. Within-case, cross-case, and thematic analysis approaches were utilized to analyze the data from the interviews. The findings of the study imply that sustainability data and data sources in both structured and unstructured format are valuable in procurement decision-making. However, structured data is more useful than unstructured data. CO2 emissions data and calculations in a structured manner are the most typically utilized sustainability data types. A single system containing all sustainability data required for making procurement decisions would be an ideal solution for storing sustainability data. The findings also highlighted that the utilization of sustainability data is concentrated on supplier selection process. Measuring of sustainability data, quantification of CO2 emissions, and gathering relevant data are the most significant challenges identified in the utilization of sustainability data in procurement decision-making. The constantly increasing number of suppliers in large procurement organizations has made collecting sustainability data more complicated. Outside of the focal firm, customers pose the most critical stakeholder pressure for sustainable procurement. Finally, the application of CO2 emissions data in procurement decision-making, and the creation of easily understandable and quantifiable KPIs are important future development themes for companies.
Thesis advisor
Kim, Seongtae
procurement, sustainability, data, decision-making
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