Green Procurement Playbook 2025

Use business cases as an engagement tool Beyond approval, a well-crafted business case can be a powerful internal alignment tool. It creates shared language across functions, surfaces trade- offs and clarifies decision rights. Procurement leaders increasingly see their role not just as buyers, but as translators and facilitators, bringing forward green options, structuring trade-offs and enabling informed decisions. Business cases also serve as instruments for engagement, accountability and tracking, ensuring that sustainability commitments are clearly documented, tied to ownership and revisited as projects evolve.10 We don’t build business cases for every green decision. The Board approved the roadmap and its cost when we committed to SBTi. It’s part of our licence to operate. BayerCustomize the approach by investment type Sustainability-related procurement decisions require different degrees of rigour. Leading companies adapt to context: –Routine purchases (e.g. switching to greener packaging) may rely on pre-approved standards or internal pricing assumptions. –Strategic investments (e.g. long-term contracts for green steel or sustainable aviation fuel) require robust business cases and are often escalated to executive committees. –Transformational bets (e.g. co-investing in renewable energy or introducing a new product) may draw from innovation budgets or dedicated sustainability funds.Some companies adjust their internal financial thresholds, such as hurdle rates or required ROI, for sustainability investments. This approach recognizes that projects with long-term payback periods or intangible benefits (such as brand value or risk reduction) may not meet standard financial criteria but are still strategically important. In some cases, sustainable options may require higher upfront capex but lead to long-term opex savings, yet annual budgeting cycles often prevent procurement teams from capitalizing on these opportunities. Secure dedicated funding mechanisms To avoid case-by-case conflicts, several organizations have established centralized sustainability funds or internal carbon budgets. These mechanisms help absorb green premiums and reduce friction between project teams and procurement. For example, DHL centrally funds investments in sustainable aviation fuels while offering customers the option to purchase lower- emission services, effectively monetizing the sustainability investment over time.This approach minimizes the burden on operational P&Ls and enables bold, long-term commitments. While dedicated budgets for green procurement are becoming common, these are not yet standard practice. Their suitability depends on an organization’s maturity, sector and internal budgeting structure. Other forms of sustainability finance and collaboration, such as green bonds, preferential loans and blended finance, may also help here. Green Procurement Playbook: The CPO’s Guide to Delivering Value for Business and Planet 29