Circular Procurement and Sourcing: A Practical Guide Based on ISO 59004:2024
As climate risks intensify, materials grow scarce, and ESG expectations sharpen, organizations are rethinking the foundations of their supply chains. Traditional procurement, focused on unit price and short-term contracts, is no longer fit for a world aiming to stay within planetary boundaries.
TL;DR
Circular procurement = buying products/services designed for reuse and minimal waste.
Circular sourcing = using renewable or recovered materials from the start.
Both are core strategies in ISO 59004:2024 to future-proof supply chains and hit ESG goals.
Enter circular procurement and circular sourcing: two of the most strategic levers in the shift to a regenerative, resilient economy. Defined and structured in ISO 59004:2024, these concepts offer a playbook for organizations that want to move from compliance to leadership in the circular economy.
This article explores what circular procurement and sourcing really mean, how they differ, and how your organization can embed them into operations starting now, with five practical steps, real-world examples, and a clear link to ESG goals and upcoming regulatory frameworks.
What Is Circular Procurement?
According to Clause 6.2.4 of ISO 59004:2024, circular procurement is a process focused on enabling product and resource circulation by optimizing what is purchased and how it’s used. It emphasizes solutions that:
- Minimize resource extraction
- Maximize repairability and longevity
- Include recovery or take-back agreements
- Are designed for reuse, remanufacturing, or recycling
“Procurement… should enable product and resource circulation and prevent the creation of waste and harmful losses and releases.”
[ISO 59004:2024, Clause 6.2.4]
In other words, circular procurement rethinks purchasing as a strategic sustainability function.
What Is Circular Sourcing?
While procurement focuses on acquiring solutions, circular sourcing — described in Clause 6.2.3 — deals with the origin and nature of materials. It emphasizes:
- Sourcing secondary (recovered) or renewable resources
- Avoiding virgin or non-renewable resources when possible
- Ensuring suppliers uphold traceability and non-toxicity
- Evaluating the life cycle impact of inputs
Circular sourcing closes the loop from the start by ensuring that what comes in can go around again, safely and sustainably.
5 Practical Steps to Implement Circular Procurement and Sourcing
1. Redefine Procurement Criteria
Move beyond lowest-cost sourcing. Introduce criteria such as:
- Recycled content %
- Modularity or repairability
- Take-back or service agreements
- Lifecycle cost vs. purchase cost
| Traditional Procurement | Circular Procurement |
|---|---|
| Lowest upfront cost | Total cost of ownership / lifecycle cost |
| Supplier price comparison | Supplier’s circular capabilities (e.g. take-back, repair) |
| Speed and volume | Resource efficiency and minimal waste |
| One-time purchase | Service-based models (e.g. leasing, pay-per-use) |
| Little focus on product end-of-life | Designed for reuse, repair, remanufacture, or recycling |
| Focus on individual product functionality | Focus on value creation across lifecycle and network |
| New/virgin material preference | Preference for recycled, renewable, or recovered materials |
| Siloed decision-making | Collaboration with design, sustainability, and suppliers |
| Short-term contracts | Long-term partnerships with shared circular goals |
2. Audit Your Current Inputs
Use ISO 59004’s definition of resource: “an asset from which a solution is created or implemented”, to identify:
- Which materials are renewable?
- Which can be recovered or reused?
- Where do losses or emissions occur?
3. Engage Suppliers as Circular Partners
Circularity requires collaboration. Ask:
- Can your suppliers guarantee traceability?
- Do they offer remanufactured or refurbished options?
- Are they aligned with the principles of ISO 59004?
4. Integrate with Design Teams
Procurement is no longer downstream. Work with product designers to:
- Reduce material types (simplifies recycling)
- Choose safer, more regenerative inputs
- Enable future recovery processes
5. Monitor and Report Progress
Track procurement’s impact using circularity indicators (Clause 3.6.6):
- % of circular spend
- % of contracts with circular clauses
- Number of products sourced with end-of-use strategies
Why It Matters and What to Do Next
Circular procurement and sourcing are strategic imperatives in a resource-constrained, regulation-driven world. By adopting these approaches, organizations can:
- Mitigate supply chain risk and price volatility
- Reduce environmental impact across the life cycle
- Align with ESG reporting and SDG targets
- Stay ahead of regulatory shifts like the EU Green Deal and extended producer responsibility
Related Articles:
Navigating the New ISO Circular Economy Standards: A Practical Guide
The opportunity is clear: shift from short-term purchasing to long-term value. Use your buying power not just to acquire — but to enable reuse, resilience, and regeneration.
Your supply chain is your strategy.
At Indeed Innovation, we help forward-thinking companies turn circular ambition into actionable strategy.
From supplier engagement frameworks to circular design integration, our cross-functional team supports you at every step, guided by global standards like ISO 59004:2024. Whether you’re building a circular procurement policy, designing regenerative products, or embedding traceability into your sourcing, we turn complexity into clarity.
