Link executive compensation to green procurement goals As many CPOs acknowledge: what gets incentivized gets done. In interviews conducted for this report, two-thirds of companies reported some linkage between sustainability goals and C-suite- level compensation. Tellingly, many CPOs identified compensation as the single most effective catalyst for securing leadership support. When executives are personally accountable for sustainability outcomes, green procurement quickly moves up the list of priorities. Approaches vary, but most companies tie incentives to long-term variable compensation, often using metrics such as CO2 reductions – ideally scope 3.5 Some go further, tracking supplier engagement or the percentage of suppliers with metrics aligned to the Science Based Targets initiative (SBTi). The structure may differ, but the impact is consistent: once sustainability enters the executive scorecard, action follows. CPOs should seize the opportunity to shape incentives that reflect the contribution of procurement. Partnering with HR and compensation committees can help embed procurement into the metrics that matter to leadership. Of course, these incentives presume that a foundation is already in place. Otherwise, executives will not know how to respond and may end up frustrated, their compensation affected without clear direction. Incentives must be aligned with enabling conditions, such as having an overall corporate sustainability agenda and targets, building a procurement team to drive this agenda and segmenting suppliers according to impact. Green procurement requires change management. People resist change unless it is embedded in their KPIs, dashboards and performance reviews… The biggest catalyst for change? Linking sustainability performance to executive bonuses. That changed everything for us. Iberdrola Speak the language of the C-suite To build momentum, CPOs must seek internal alignment. Each executive in the C-suite brings a unique perspective and set of priorities and can help CPOs along the way; but it is the CPO’s task to translate the sustainability agenda into terms that resonate with each executive. Many leaders will not become sustainability champions, yet identifying and encouraging one or two strong allies can create a ripple effect across the organization. Governance structures vary, but outlined below are the most common centres of influence and potential allies. Board members Boards are increasingly concerned with long-term risk, regulatory compliance and reputation. Green procurement speaks directly to these concerns by reducing supply chain risk, ensuring compliance and strengthening the company’s licence to operate. With risk assessments tied to sustainable suppliers, scenario planning based on regulatory and geopolitical shifts, and strategic growth opportunities linked to green procurement, CPOs can elevate procurement as a strategic lever, not just an operational function.Chief Executive Officer (CEO) CEOs are under pressure to deliver both business growth and progress on sustainability. Green procurement can provide support through innovation in sustainable materials, accelerating shifts in energy sources and influencing the specifications and quantities of materials demanded across the business. When CPOs position procurement as a lever to meet growth targets while advancing sustainability, they speak directly to the CEO’s dual agenda – and open the door to strong executive support. Chief Financial Officer (CFO) CFOs focus on cost, risk and capital allocation. To gain their support, CPOs must build credible, data- backed business cases that articulate the required investments and expected financial benefits. They must work closely with finance teams to model ROI, cost avoidance and long-term value creation – while also factoring in regulatory risks. In some markets, failure to meet sustainability requirements could lead to fines or restrictions that directly erode profitability. When framed strategically, green procurement becomes not just about costs, but enterprise value. Green Procurement Playbook: The CPO’s Guide to Delivering Value for Business and Planet 19

Green Procurement Playbook 2025