The RS and CIPS 2026 Indirect Procurement Report found ESG is firmly embedded in organisations. Yet cost pressures mean companies are now pursuing strategies and prioritising tactics that pay for themselves.
It has been a challenging year for Environmental, Social and Governance (ESG) and sustainability executives in British and Irish organisations. Research for the 2026 report highlights ESG concerns are still high on companies' agendas but there’s an emerging paradox: organisations are doing more of the practical things which shrink footprints, such as optimising energy, diverting waste and consolidating transport, yet they are less inclined to pay a "green premium" for products.
Efficiency pressures are starting to impact purchasing behaviour
According to the survey results, rather than stepping away from sustainability, procurement is doubling down on the parts that pay back fastest, writing expectations into contracts, and re-examining where it makes sense to pay extra. As Raj Patel, Managing Director for RS UK and Ireland, states:
“Net zero and waste reduction are long-term commitments, not quarterly tactics; while a non-sustainable option can look cheaper today, scale will push sustainable unit costs down, and the whole market benefits when responsible products reach critical mass.”
Efficiency-driven ESG
Across organisations committed to sustainability and carbon reduction, the key interventions are becoming universal. Waste recycling remains the anchor tactic for 74 per cent of companies, up from 72 per cent last year. Reduced energy usage has risen again to 60 per cent, up from 56 per cent, while most striking is the jump in the use of renewable energy, now at 60 per cent. This is a strong signal that green tariffs, on-site generation and Power Purchase Agreements – which provide long-term price stability for the buyer, and revenue certainty for the energy provider - are moving from pilot to programme.
It’s logical for organisations to prioritise ESG where it delivers operational efficiency - and resource and cost reduction. Energy and waste programmes for instance are data-rich, increasingly automated and come with visible OPEX savings. As Martin Wakelin, Group Head of Indirect Procurement, Valeo Foods, argues:
“Cost efficiency and sustainability aren’t at odds - in many cases they’re the same decision. Converting flows from road to rail, for example, cut our CO₂ significantly and reduced transport costs; lower carbon often means lower energy or fuel burn, and that tends to be cheaper over time.”
Sustainable MRO: a shift in focus
Attitudes towards sustainability are continuing to evolve in Maintenance, Repair, and Operations (MRO). Sourcing sustainable products as part of MRO still matters to almost two-thirds of respondents (64% important/very important), but that share has fallen from 72 per cent last year. Three factors are at play here.
Firstly, macro headwinds like tariffs, inflation shocks and tighter budgets are pushing buyers to defend uptime and price.
Secondly, as organisations normalise the most tactical ESG actions (energy, waste, logistics), “sustainable MRO” becomes a pragmatic operational lever as buyers become less concerned about labels and more about proven in-use benefits.
Thirdly, the market is demanding proof over promise - evidence in the form of energy ratings, repairability, recycled content and circular pathways to back claims. As Andrea Barrett, Chief Sustainability Officer, RS Group, says: ‘‘Customers are looking for verified sustainability claims that promote transparency and trust. Product ESG claims need to be backed by verifiable data, giving customers confidence in the sustainability improvements of a product, from how it’s made and what it’s made of, to in-use savings, extended life, and repairability. This ensures the customer has choice, transparency and trust to empower their purchasing decisions. That’s exactly the principles the RS Better World product range is built on.”
Seeking ‘sustainability at parity’
While sourcing sustainable items remains a priority, the willingness to pay a premium for sustainable products has fallen for the second consecutive year to 53 per cent (down from 62% last year and 82% two years ago). This pricing reality is changing how sustainable products compete. In other words, deliver equivalent or better technical performance at the same price point, or prove the business case in Total Cost of Ownership (TCO). In fact, taking a TCO view should now be the norm as often sustainable products are not more expensive in the long term – especially if they perform better, last longer and have an environmental and social value. As Paul Duncombe, Commodity Manager, Siemens UK, puts it:
“The idea ‘ESG always costs more’ is a myth. Often it is cost-neutral or cheaper... Where there is a premium, we demand the numbers: money and carbon saved and social value created across the total lifespan of the product or service.”
