Sustainable IT Procurement. A case of Network and Telecommunications (N&T) Services Sourcing

Abstract

Volvo Group, being an industry leader in sustainability, has developed a sustainability strategy that considers the climate, resources and people. The targets set within their sustainability strategy follow the Paris agreement requirements and UN sustainability development goals. Further, Volvo Group aims to generate 50% of their revenue through providing sustainable transportation as a service, for which IT purchasing is critical. Thus, Volvo Group believes it is necessary to investigate their present sustainable IT procurement strategies and to develop them. This study considers Network and Telecommunications (N&T) services as an initial step towards sustainable IT procurement. The objective of the thesis is to develop sustainable procurement strategies in sourcing N&T services. To achieve this objective, critical sustainability risks within the N&T industry and their mitigation are investigated, based on which recommendations are suggested to the case company. Internal interviews with case company employees and external interviews with three N&T service suppliers were conducted to achieve the objective. The suppliers interviewed in the study are part of the case company’s supply base. The internal interviews helped the authors in understanding the current sustainable N&T services sourcing strategies, whereas the external interviews facilitated an understanding of the N&T industry sustainability risks and the mitigation approaches pursued by the suppliers. In addition to the interviews, internal documents and annual sustainability reports of the interviewed suppliers were reviewed. A review of the present sustainability strategies in sourcing of N&T services showed that these strategies assess only the risks that are associated with automotive purchasing. Further, the study identified critical sustainability risks associated with the operations of telecommunication operators (TCO) and their supply chains. The main sustainability risks posed by a TCO ́s operations are energy consumption and large amounts of electrical and electronic waste. The literature review highlighted the importance of assessing the sustainability risks within the supply chain of the suppliers, especially when sourcing services. In this regard, a TCO ́s supply chain poses sustainability risks related to human rights, and potential use of hazardous materials and conflict minerals within the products sourced. Since the current strategies of responsible sourcing at the case company are not addressing the specific risks of the N&T industry, a questionnaire addressing these specific sustainability risks is devised by the authors. The sustainability questionnaire can play a critical role in future sustainable sourcing decisions