Page 160 - GHES-3-3

Global Health Economics and
Sustainability
Sustainable procurement in healthcare to address value chain

prioritize ethical practices in their supply chain reported (CAHO) has taken in creating awareness on sustainable
a 20% increase in revenue from responsible products, a procurement in a group of healthcare professionals and
16% decrease in supply chain costs, and a 30% boost in exploring their level of understanding and how it could
brand value (Domingo, 2015). In addition, McKinsey influence their decision-making process.
found that companies with strong ESG scores may also see Clause 4 (Figure 1) serves as the foundational step
a 10% decrease in capital costs. In fact, a survey conducted for organizations intending to start their sustainability
by Oxford University and Arabesque Partners indicated journey. It emphasizes the importance of understanding
that an overwhelming 88% of companies with robust the basics of sustainability and its role in procurement and
sustainability practices reported improved operational guides organizations in understanding the fundamentals
performance (Clark, 2015). of sustainability, the core subjects it covers, and the
Moreover, according to a report by Accenture, driving forces of the organization, such as stakeholder
companies that prioritize ESG factors have seen a requirements. In addition, it encourages organizations to
remarkable 2.6 times increase in shareholder returns identify key considerations relevant to their sustainability
compared to those with average ratings from 2013 to efforts.
2020. Likewise, studies from the Harvard Business School Clause 5 (Figure 2) defines the organization’s
have also found that businesses with robust sustainable commitment, where top management commits to
practices have consistently outperformed their peers in sustainable procurement. This clause emphasizes
stock market performance (Whelan & Fink, 2016). In the importance of defining accountability within the
addition, the objective of sustainable procurement is to procurement process and aligning organizational goals with
build a responsible value chain that incorporates ethical sustainability objectives by assessing current procurement
practices, prioritizes information security and data privacy practices and the supply chain and subsequently developing
requirements of the hospital, and aspires to go beyond an implementation plan that suits the organization’s needs.
mere compliance with the regulations in its operations Clause 6 (Figure 3) focuses on organizing the
(Heetkamp, 2023). organization toward achieving sustainability by

1.1.4. Understanding sustainable procurement embedding governance in the procurement process. This
through the international framework involves ensuring that individuals within the organization
understand the importance of sustainability in procurement
The International Organization for Standardization and how to implement it effectively. The CAHO
(ISO) 20400 framework provides a deep dive into the masterclass initiative was a significant step in building the
systematic approach of sustainable procurement through capability of personnel, ensuring they are well-informed
clauses 4 (Understanding fundamentals), 5 (Integrating about sustainable procurement practices. The framework
Sustainability in organizations procurement policy and further highlights the importance of stakeholders and their
goals), 6 (Organizing the procurement function towards views. In addition, it outlines how the organization should
Sustainability), and 7 (Integrating Sustainability in to prioritize sustainable procurement, continuously improve
procurement process). The present article discusses that the its performance, and establish a mechanism for handling
effort Consortium of Accredited Healthcare Organizations any grievances from stakeholders.

Figure 1. Clause 4 of the ISO 20400 framework: Understanding the fundamentals

Volume 3 Issue 3 (2025) 152 https://doi.org/10.36922/ghes.5663