Paul Vos | Regional Managing Director | Southern Africa | Chartered Institute for Procurement & Supply (CIPS) | mail me |
South African companies are stepping up as global procurement increasingly pivots toward environmental, social and governance (ESG) priorities. Procurement goes green as several firms set the pace for eco-conscious sourcing and operations.
Shoprite, for example, is rolling out solar installations across its operations. Anglo American is piloting hydrogen-powered mining trucks. In the banking sector, Nedbank is financing large-scale green infrastructure projects.
A shift to sustainable procurement
South Africa is catching up quickly with global ESG trends. Big corporates are already reporting against international standards. Exporters are preparing for EU carbon rules.
A 2023 McKinsey study of 2,269 public companies found that firms achieving better growth and profitability while improving sustainability and ESG performance consistently deliver higher shareholder returns. These findings show how procurement goes green to boost both profit and purpose.
Yet shifting to sustainable procurement presents clear challenges for South African companies. Many small and medium-sized enterprises, particularly those targeted through Broad-Based Black Economic Empowerment (B-BBEE), lack the infrastructure or systems to meet ESG standards.
In addition, businesses often struggle to access reliable data on their suppliers’ environmental and social impact. Upfront investment in greener technologies or infrastructure can also be a barrier for under-resourced suppliers.
Constant changes in regulations, such as carbon tax and extended producer responsibility (EPR) laws, create further uncertainty. However, I remain optimistic. We’re already seeing clear wins for businesses that have embraced ESG in procurement. Solar installations are reducing power bills. Ethical branding is strengthening customer loyalty.
ESG as a strategic investment
Exporters with green credentials are maintaining access to key global markets. Procurement goes green in these cases, showing tangible business and reputational returns.
More South African companies are now starting to see ESG as a strategic investment rather than a compliance burden. The smart money views sustainability as a hedge against energy price volatility, carbon taxes, and consumer scrutiny. It is, in effect, an investment in long-term resilience.
Government initiatives such as carbon tax, EPR regulations and public procurement rules linking ESG with localisation and B-BBEE outcomes are influencing procurement decisions across industries. As procurement goes green, these policies help accelerate national transformation and sustainability goals.
Several trends are shaping the future of procurement in South Africa and beyond. These include carbon accounting, which is fast becoming a standard line item in contracts. Circular economy principles are gaining traction. AI tools now enable companies to map emissions, flag supply chain risks and prevent greenwashing.
In conclusion
ESG and B-BBEE will also increasingly converge, driving demand for suppliers that are both black-owned and sustainability-ready. As the local procurement landscape transforms, CIPS is equipping professionals with the skills to lead on both sustainability and inclusion.
We’re convening public and private stakeholders to align on practical standards. And we’re providing the tools and playbooks that help companies move from ESG talk to ESG action.
In South Africa, ESG and transformation are not parallel tracks. They are part of the same journey. The smart play is to align them. When procurement develops black-owned suppliers who are also green-capable, we achieve the triple bottom line – people, planet, and profit – through one set of contracts.
