3 Key Steps Toward More Sustainable Spend Management

3 Key Steps Toward More Sustainable Spend Management

Introduction “An ESG reckoning is coming.” That was the wakeup call Harvard Business Review published in March 2021, about the responsibility companies and organizations bear when it comes to the future of our planet. Environmental, Social, and Corporate Governance (ESG) evolved from a United Nations effort around responsible investing; in less than 20 years, it has become a defining focus for organizations of all kinds. The movement has only gathered steam as these factors have loomed larger on the global stage. And here’s the thing: While ESG isn’t directly a financial metric, it can have a powerful impact on the bottom line. Fortunately, incorporating ESG into your company’s spend management program is an achievable goal. But above all, sustainable spending is an opportunity for finance managers to take a leadership role in building a better company—and a better world.

Introduction In this guide, readers will learn: 02. 01. 03. 3 steps to take The impact that ESG Best practices to toward sustainable can have on a follow for more spend management company’s finances sustainable spending

Introduction ESG’s Impact: The Numbers The benefits of sustainable business practices extend to all aspects of a company—including the bottom line. $120 billion 4.7x 9% – 16% What American corporations How much higher the How much sustainable spend on printed forms. Every operating margins of procurement practices have 1 3 year. companies were with high been shown to reduce costs. ESG performance between 2 2013 and 2019. “Companies with their eye on their ‘triple-bottom-line’ [economic, environmental, and social sustainability] outperform their less fastidious peers on the stock market.” —The Economist 1. Paperless Projects 2. Accenture 3. World Economic Forum

3 Steps to Sustainable Spend Management

Step #1 Rethink Procurement Prioritizing sustainable suppliers is key to ESG efforts. Start by focusing on Closed Loop Spend Management, recommends Accenture. This process involves “baselining and rebuilding procurement-related costs from the bottom up (rather than cutting incrementally from the top down),” and it can lead to improved sustainability throughout the supply chain. Accenture recommends these 3 action items: Reflect Consider Measure Use analytics to get a sense When looking at potential Incorporate data around of where your company suppliers, give sustainability suppliers’ ESG efforts into currently stands with the same weight as you give the selection and review sustainable business more traditional factors, such process; incentivize suppliers practices. as reliability and price. to set higher goals.

Step #2 Go Paperless Saving trees can also save a whole lot more for your company. Making the shift to paperless has environmental benefits, of course, but automating the process can also streamline the operation of the finance team, by: ● Reducing the time spent chasing receipts ● Cutting the time wasted on reconciliation ● Providing visibility into real-time spending ● Leaving a clear payment audit trail And consider what going paperless as part of a modern spend management platform can do for the cost of processing a single expense report: With a traditional spend With a modern spend $58 1 $7 2 management system management system 1. GBTA 2. BTN

Step #3 Integrate ESG Into Travel Programs Working with the travel teams can have an outsized impact. Consider this: of all U.S. transportation-related CO emissions comes from aircraft. 12% 2 Then get inspired to expand ESG efforts across your travel program. Start here. Surface flights that use Prioritize LEED-certified Find creative solutions newer airplanes hotels in your program Prioritizing rail over air travel The next generation of Encourage employees to or encouraging hybrid commercial jets are more stay in more environmentally rental cars can make a travel efficient and use conscious lodging. program more sustainable. lower-emission fuel.

Checklist Best Practices for Sustainable Spending Ready to dive in? Begin with this checklist to help shape the journey when restarting a travel and spend program. ✔ Evaluate ✔ Embed existing suppliers and how they do business. The new policies in processes to create day-to-day practices of your business partners reflect on your practices that help move the organization toward its company’s reputation. ESG goals. ✔ Legislate ✔ Seek clear procurement policies with long-term ESG out diverse and sustainable suppliers. Sustainable goals built into them, and communicate them widely procurement is a chance to reevaluate your with staff. purchasing agreements. ✔ Explore ✔ Share new ways for sustainability to inform the ways your regular updates to celebrate sustainability milestones and company makes purchases. Stay up-to-date on new new sustainability initiatives with customers and staff. environmental challenges and solutions.

Conclusion Sustainable spend management sits at the intersection of “doing good” and “doing well.” Done right, it can be: Environmentally positive Profitable Good for morale Reputation-enhancing Organizationally Simple to implement transformative On top of all these benefits, sustainable spending is an opportunity for finance managers to take a leadership role in building a better company—and a better world. TM Learn more about how TripActions Liquid can help your company meet its ESG goals.

Fast becoming the default for corporate travel and spend management, TripActions is the leading cloud-based T&E platform that combines industry-first technology with best-in-class travel agency service. Trusted by travel managers and finance teams alike at more than 5,000 companies globally, TripActions leverages real-time data to keep travelling employees safe, control costs, and save time. Learn more at www.tripactions.com. Join the TripActions Community at https://community.tripactions.com. #LetsGo tripactions.com | #tripactions | #LetsGo