THE IMPACT OF ESG REGULATIONS ON SUSTAINABLE PROCUREMENT PRACTICES IN THE UK FMCG SECTOR

Abstract

This study aims to analyse the influence that ESG practices have on the application process of eco-friendly procurement activities, along with the operational efficiency of the procurement activities of the British FMCG organisations. Besides, it analyses the impacts of ESG principles on the operational performance of procurement activities. Consciousness about environmental decay, inequality in society and the necessity of corporations to be responsible creates challenges for the British FMCG organisations. The study explores that ESG practices for such organisations ensured cost reduction for green procurement. The research focuses on how ESG regulation can influence the commission-independent procurement sustainable practices in the British FMCG. The study is a qualitative, inductive one that performs the analysis of secondary sources of data in journal articles, industry reports, policy documents, and news articles. The paper investigates the effects of ESG regulations on procurement strategies, operational performance, and supplier relationships, of the top-performing British FMCG brands. The results emphasise that the ESG standards are essential in supporting green procurement, enhancing the working relationship with suppliers, and incorporating the sustainability indicators in measuring performance in procurement. The study has however shown that there are profound issues portrayed such as operation trade-offs and cost implication associated with compliance activities. Findings indicated that top FMCG firms follow ESG principles for measuring or minimising carbon footprints when working with small vendors.