STRATEGIC SOURCING

One of those helping to deliver solutions is Peter Spiller, a Partner at McKinsey based in Frankfurt.

“ More and more companies explicitly include ESG criteria in their sourcing decision making, and many are specifically focused on reducing both carbon emissions and costs simultaneously,” he says.

“ This dual mission approach is not just a strategic choice, but a necessity driven by rising carbon costs, such as those from Europe’ s Carbon Border Adjustment Mechanism( CBAM) and the European Trading Scheme( ETS, now extended under ETS2).

“ What we are also seeing is that introducing a carbon lens to more classical sourcing cost reduction programmes provides a crucial shift in perspective that can open up a wealth of new opportunities for creative problem-solving around de-specification and waste reduction.”

Schneider Electric exemplifies how leading organisations successfully integrate ESG criteria without sacrificing commercial performance. Ard Verboon is Chief Procurement Officer at Schneider Electric, where he manages € 18bn( US $ 20bn) in annual procurement spend. His team supports Schneider Electric’ s 153 factories and 79 distribution centers across the globe.

Ard has helped the company weave ESG into its procurement DNA, with its global procurement mission centring on three pillars: enabling growth, creating competitive advantage and crucially, sourcing sustainably and responsibly.

Sustainability makes up

of the supplier scorecard at Schneider Electrics

“ Sustainability is part of our everyday work ethic and embedded in our operational plans, complete with clear performance targets,” says Ard.

“ We take a structured approach through our Sustainable Procurement Framework, which focuses on risk reduction, regulatory compliance and transformative initiatives.”

One of those initiatives is the Zero Carbon Project partners with its top 1,000 suppliers to halve their carbon operational emissions by 2025, providing them with digital tools, training and expert support.

Schneider helps to conduct regular strategic reviews of its sourcing impact and update the interventions accordingly. While its Supplier Code of Conduct sets clear sustainability expectations, every new supplier goes through rigorous sustainability screening before onboarding.

“ At Schneider Electric ESG is a fundamental part of how we do business, it is in our DNA, every day, everywhere,” Ard adds.

200 September 2025