Green Procurement Playbook 2025

Building block 7 Data, technology and performance management For many companies, the push to embed sustainability into procurement has outpaced their ability to track and manage progress. Despite growing expectations from stakeholders and regulators, few organizations have a clear line of sight into the environmental performance of their suppliers. In interviews with procurement leaders, one challenge stood out: data quality. Information is often incomplete, outdated or based on averages. Even where data exists, it rarely extends beyond Tier 1 suppliers or provides product-specific granularity, leading to decisions with limited insight. Integrating sustainability into procurement systems is another barrier. Most companies still rely on legacy enterprise resource planning (ERP) platforms or spreadsheets that were not designed with sustainability in mind. Doing so creates fragmented processes, manual workarounds and limited automation. Without seamless integration, procurement teams struggle to embed sustainability into day-to-day workflows or make green performance visible at the point of decision. Despite these hurdles, companies are making significant strides. Those leading the way are rethinking how they collect, manage and use data, shifting from a compliance mindset to one focused on improving performance and creating value. Embed sustainability into procurement scorecards and decisions Improvements in procurement can be quantified by CPOs and their teams. Figure 8 shows a non- exhaustive list of common metrics, which should be aligned with corporate goals. Start with available data and improve over time: Instead of waiting for product-level data from every supplier, use spending-based estimates, third-party ratings, or self-declarations to begin. As capabilities grow, increase accuracy first on high-emission categories and strategic suppliers. Translate ambition into measurable procurement KPIs: Leading companies break down broad corporate goals into procurement- specific metrics. Figure 8 shows a non-exhaustive list of common metrics. Set clear mandates and implications: Leaders often require periodic disclosures, as well as creating uniform disclosure guidelines for suppliers and supporting training programmes. Not only do they help improve data sharing and accuracy over time, but also they create a ripple effect in encouraging suppliers to take sustainable action.Tie performance incentives to sustainability outcomes: Some companies link variable compensation to progress. Others embed sustainability objectives into individual development plans or appoint internal champions to drive change. Embed sustainability into regular business reviews: Companies making the most progress report sustainability metrics with the same cadence as financial KPIs. Verify supplier data through trusted sources: While self-reporting plays a role, leading companies require documentation and third-party validation. Many use platforms to assess supplier performance and benchmark results. For high-risk or high- value suppliers, complement this data with audits or certifications, ensuring accuracy and enabling confident sourcing. We should favour action over accuracy. You can spend years debating the perfect baseline, but what matters is taking steps to reduce emissions now. Volvo Group Green Procurement Playbook: The CPO’s Guide to Delivering Value for Business and Planet 42