Sustainability in Procurement Article Series – Market Research for Sustainable Procurement

Introduction

This article is the second article in our series of sustainable procurement articles. In our previous article, we discussed how sustainability can be integrated into the procurement process. Today’s article will provide an overview of how market research can be used as a means of facilitating a sustainable procurement process. The following articles in this series will cover: Sustainability in a procurement plan; Market approach; Evaluating sustainability criteria; requirements and outcomes; Contract Management; and Sustainable Procurement Policy.

Sustainable procurement is now a fundamental part of responsible purchasing across government and industries. Organisations are increasingly expected to consider the environmental, social and economic impact of what they buy, and to actively seek solutions that reduce harm and promote positive change in these areas. However, these outcomes are rarely achieved passively.  Instead, thorough preparation, informed decision-making and a structured approach to market research is necessary.

Market research is the foundation for environmentally sustainable procurement. It helps organisations understand their own needs, explore what the market can offer, and evaluate risks and opportunities across the supply chain. When done effectively, market research aligns procurement activities with broader sustainability goals and supports the selection of goods and services that minimise harm and maximise value over time.

This article explores how market research can be used to support sustainable procurement. It outlines key stages in the research process, including identifying needs, engaging with the market, assessing industry trends, managing risks and ensuring procurement outcomes are environmentally sound and commercially viable.

Clarifying Internal Needs and Sustainability Objectives

Any successful procurement process starts with a clear understanding of what is required. This step is especially important when sustainability is a consideration, as businesses must go beyond identifying basic product or service requirements; they must also define their sustainability goals.

Clarifying internal needs requires asking targeted questions. What goods or services are being procured? Are they required for short-term use or long-term functionality? What environmental issues are associated with the manufacture, transport, installation, lifespan and disposal of these products? For sustainability goals to work they must be clear. For example, is the aim to reduce emissions, improve resource efficiency, increase the use of recycled materials, or support suppliers with strong environmental credentials?  A given project may even have multiple sustainability goals, in which case determining a clear order of priority between these goals is essential to guide decision making where these goals intersect.

The answers to these questions will influence every part of the market research process. Clear goals allow organisations to focus their research on suppliers and products that meet specific environmental criteria, and helps ensure that procurement outcomes are aligned with organisational priorities and regulatory expectations.

Scanning the Market and Identifying Supplier Capabilities

Once internal needs and sustainability priorities are understood, attention shifts to the external market. This phase involves identifying suppliers, understanding what is available, and examining whether the market is capable of delivering the required goods or services with the required level of environmental performance.

Market scanning involves a detailed analysis of supplier offerings, product innovations and service models. Procurement professionals should explore supplier websites, sustainability reports, procurement databases and third-party directories. Engagement may include conversations with suppliers, participation in industry briefings or requests for information.

This work is essential for identifying suppliers who offer goods or services which align with the identified sustainability goals. For example, a preliminary office fit-out plan might specify furniture that is not only cost-effective and functional, but also made from recycled content, designed for disassembly or supported by a take-back scheme. Market scanning helps businesses understand whether such options exist, and how widely they are available.

Understanding Broader Industry Trends

Effective market research also involves examining what is happening across the wider industry. This provides context for procurement decisions and helps identify emerging solutions that may support sustainability outcomes.

Organisations should look at how competitors and other agencies are integrating sustainability into procurement. What categories are being targeted for improvement? What kinds of products or technologies are gaining traction? Are there case studies or examples of successful sustainable procurements?

For example, in recent years, the construction industry has seen a shift towards low-emission concrete, modular design and increased use of recycled building materials. Similarly, the IT sector has seen the growth of hardware-as-a-service models, which allow companies to lease rather than buy equipment, thereby reducing waste and improving circularity.

Identifying these trends ensures that procurement teams are not limited by their own outdated models and can instead take advantage of the latest developments in sustainability and supply chain innovation.

Evaluating Potential Environmental and Commercial Risks

Sustainable procurement should also be alive to potential risks. Market research must include an assessment of potential issues associated with products, suppliers or industries. These may include environmental concerns, where one sustainability goal is at cross purposes with another, or social problems, such as unethical labour practices, or weak supply chain transparency.

Organisations must be able to identify and evaluate these risks early in the process. A supplier may claim to offer sustainable products but lack third-party certification or fail to disclose full supply chain data. A product might appear environmentally friendly but come with an elevated carbon footprint, due to overseas transport or energy-intensive production methods which are not proportionate to the lifecycle.

Risk evaluation should consider not only the likelihood of complications but also its potential impact. These findings can inform supplier selection, contract conditions and monitoring. Where high risks are identified, mitigation strategies should be implemented, such as requiring independent audits, placing stricter environmental clauses in contracts or selecting alternate solutions with lower risk.

Seeking Expert Advice to Support Decision-Making

In some cases, procurers may benefit from the support of a procurement advisor or sustainability expert. This is particularly valuable where the goods or services being procured are technically complex, high-value, or new to market.

Advisors can help guide market research, support supplier engagement, and identify procurement models that promote sustainable outcomes. They may also assist with writing specifications and designing evaluation criteria.

Importantly, advisors bring a wider view of the market. They may be aware of leading suppliers, emerging technologies or innovative approaches that would otherwise be overlooked. Their input helps ensure that sustainability is built into the procurement process from the start, not treated as an afterthought.

Embedding Environmental Priorities into Research

Market research should also be used to explore the specific sustainability opportunities available for each procurement. This includes documenting the environmentally sustainable outcomes sought, identifying what is required to achieve them and distinguishing between mandatory and desirable features.

The Australian Government identifies three core focus areas for sustainable procurement: climate, environment and circularity. Within these categories, a range of principles help guide procurement decisions.

Climate-focused outcomes include minimising greenhouse gas emissions, improving energy efficiency and choosing materials with lower embodied carbon. Environmental priorities may include conserving water, using safe and renewable inputs, reducing hazardous chemicals and diverting waste from landfill. Circularity involves selecting products that are durable, repairable, recyclable or designed for reuse. This may also include engaging in product-as-a-service models or procuring refurbished goods.

Research should assess how suppliers are performing in relation to these principles. Can the supplier meet circular economy goals? Do they offer reporting on emissions or waste? Is there evidence of continuous improvement? These findings can help shape procurement specifications, evaluation frameworks and contract expectations.

Engaging the Market to Encourage Innovation

After internal research and supplier scanning, organisations can begin more formal engagement with the market. This may involve industry briefings, consultations or pre-tender discussions that help suppliers understand the desired sustainability outcomes and prepare their proposals accordingly.

Market engagement allows teams to test assumptions, clarify expectations and encourage suppliers to present innovative or alternative solutions. This is especially useful where sustainability goals may require suppliers to rethink standard practices.

For example, rather than simply supplying cleaning products, a provider may propose an outcome-based service that reduces chemical use and water consumption. This could also include a technology vendor offering equipment on a usage-based model that supports long-term reduction in resource use.

Engaging the market early builds stronger relationships, allows more accurate scoping of procurement needs, and supports the identification of realistic and measurable sustainability outcomes.

Aligning Procurement Outcomes with Sustainability Goals

The final purpose of market research is to align procurement outcomes with sustainability objectives. Once the market has been analysed, risks evaluated and supplier capacity assessed, the procurement team is in a strong position to define what sustainability success looks like for the contract.

These outcomes should be included in procurement planning, communicated in tender documentation and monitored over the life of the contract. Where appropriate, performance indicators should be defined and contractually enforced. These may include emissions targets, waste diversion rates, recycled content requirements or energy consumption thresholds.

Sustainability outcomes must be more than policy statements. They must be translated into specific categories that can be assessed, reported on and enforced. Proper market research makes this possible, by grounding sustainability goals in what the market can realistically offer, and helping organisations make evidence-based decisions.

Conclusion

Market research is essential for integrating environmental sustainability into procurement. It allows organisations to clarify internal needs, assess supplier capabilities, evaluate risks and stay informed about emerging technologies and practices.

By focusing on outcomes and aligning research with sustainability principles, procurement professionals can help their organisations move beyond compliance towards real impact. A well-researched procurement process is not only more strategic, but also more responsible, resilient, and fit for the future. As sustainability continues to grow in importance, market research will remain the cornerstone of any effective procurement strategy.

Keep an eye out for our next article in the series, where we’ll explore how to integrate sustainability into your Procurement Plan. If you need any assistance conducting sustainability-focused market research, or in relation to sustainable procurement generally, please let us know.