March 9, 2015
The Challenge
With a vast spread of teams and projects conducted around the world, AB InBev saw the opportunity to understand how category procurement teams could enhance their everyday purchasing decisions by aligning more closely with the company's broader social responsibility environmental objectives, known as "Better World."
AB InBev partnered with BSR's Center for Sustainable Procurement (CSP) to explore how to improve the way sustainability is integrated into procurement activities. The term "sustainability" has a broad meaning and can often be misunderstood. Therefore, AB InBev decided to enhance awareness around how its procurement teams can contribute to the company's Better World actions by providing direct value—in particular, by lowering environmental and social risks across the value chain.
The Strategy
In 2013, led by AB InBev’s Responsible Sourcing function, the company began creating awareness training to improve the level of understanding of sustainability among procurement professionals around the world. The training sought to link the procurement team’s daily activities and responsibilities with:
- Efforts conducted by AB InBev’s Better World department, which manages the company’s social responsibility programs
- AB InBev’s external-facing Better World goals and how they are relevant to specific procurement categories
- The relevance of AB InBev’s social and environmental compliance efforts across key procurement categories
During the training, procurement teams learned about key sustainability issues, as well as local laws and regulations relevant to their areas of responsibility. Procurement teams were also taken through facilitated dialogues and brainstorming exercises to think through how they could apply a sustainability lens on different procurement categories and still have an impact on traditional business drivers (e.g., cost, efficiency, compliance).
A key goal of the training was not only to inform procurement teams about relevant issues and regulations, but also to spur ideas on potential alternatives to bringing business value through the procurement function and, ultimately, complement the financial business case.
The Impact
During 2014, more than 150 procurement professionals were successfully trained worldwide, creating greater awareness of the value of sustainability to procurement. The training also helped improve cross-functional relationships and communication between the sustainability teams and procurement teams, which, for example, has led to a project that studied the potential impacts and value of more sustainable packaging. In addition, AB InBev’s global environmental goal owners for barley water management, packaging reductions, eco-fridges, and logistics conducted focused awareness and training activities to support goal achievement.
Procurement teams are now using the concepts and ideas learned in the training to regularly challenge procurement categories, recommend new opportunities and procurement alternatives that simultaneously deliver business value, and contribute to the company’s Better World goals.
Lessons Learned
While it may be too soon to understand the full impacts of the training and the increased awareness of sustainability among procurement teams, the guidance, resources, and partnership with the CSP has opened new discussions internally about the value of sustainability, which will serve the company well in the months and years to come.
Ultimately, AB InBev aims to change category strategies by incorporating sustainability criteria more explicitly into procurement processes. Doing so will link internal policies and practices to the potential actions of suppliers, and will empower category managers with more evidence and avenues to enhance their procurement decisions. This will be especially meaningful to millennial procurement professionals, who have shown an increasing awareness for corporate social responsibility issues and transparency.
AB InBev will also continue to explore ways to improve its sustainable procurement practices by joining CSP’s Procurement Leadership Group, a collaborative initiative that will enable companies to share common challenges and successes, as well as develop and advance industry standards and best practices.
Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.
