Exploring the Decision Making Process for Environmental, Social, and Governance (ESG) Procurement Investments within Organizations: Interviewing Sustainability Managers

Sammanfattning: This research addresses the decision making process for ESG procurement investments within organizations. Since the decision making process for ESG procurement investments, particularly the consideration of environmental, social, and governance, is not clearly understood or documented, this research aims to investigate the roles, activities, and stakeholders involved in each stage of the decision making process, while exploring the challenges and opportunities associated with using ESG considerations for ESG procurement investments. The research design employs qualitative methods, including semi-structured interviews with sustainability managers and a comprehensive analysis of findings. The key findings indicate that the decision making process follows Herbert Simon's three steps, involving the intelligence, design, and choice stage. Throughout this process, various stakeholders, including management teams, finance teams, and sustainability departments, assume specific roles. Furthermore, the involvement of additional stakeholders can vary from stage to stage, with their roles adapting accordingly. In the intelligence stage, the activities encompassed identifying the situation and problems at hand, as well as collecting data through collaborative efforts. Moving into the design stage, activities involved developing business cases and exploring potential alternatives. Finally, in the choice stage of the decision making process, the activities involved evaluating the best alternative, presenting it to the management team, and making the final decision. Challenges identified using ESG in procurement investments include among others aligning costs and sustainability, limited awareness and competences, and data availability, while opportunities lie in risk reduction, enhanced sustainability, collaboration, and cost reductions. The research contributes to existing literature by providing empirical evidence, development of an analytical framework, and shedding light on the decision making process. In practical terms, this research provides valuable insights for sustainability managers, procurement professionals, and organizational leaders. It highlights the importance of understanding the decision making process and the roles of different stakeholders, which can lead to improved collaboration and coordination among departments involved.