An ECO-ACTIVE initiative developed in partnership with
ECO-ACTIVE BUSINESS: PROCUREMENT guidance notes Why Should I worry about my company’s procurement? Be Efficient, Ethical and Environmental – the 3 E’s of Sustainable procurement. 51% of the British public chose a product or service because of a responsible reputation. All organisations purchase both goods and services as part of the day to day running of their operations. From tea bags to gravel, from office paper to roofing tiles, it is possible to use your purchasing power to make a green choice and make a difference. Fit for purpose is the underlying requirement of all goods or services, cost and quality must be assured. Ethical and environmental costs are now recognised as an integral part of the procurement decision making process, both for the client and for the customer. So whether you are running a hairdressing business in St Helier, or operating as part of a global financial corporation, sustainable procurement should be at the heart of your operations. Clients want to be certain that the product or service they acquire is ethically and environmentally sound, indicative of a purchase or a service from a socially responsible company. This guidance is designed to ensure that your procurement process will minimise its environmental impact through measures such as increasing efficiency, sourcing from sustainable suppliers and considering the life cycle of products. These measures, will not only improve the environmental credentials of your products or services, but will also likely to cut costs through greater resource efficiency. There are increasing expectations on all businesses and organisations to operate in a socially and environmentally responsible manner: ·
Government: Sustainable procurement has been a focus point in the EU Council, Commission and Parliament as well as the UN. The UK Government and States of Jersey both hold environmental consideration high in their procurement policies.
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Organisations: Unsustainable and unethical companies are no longer tolerated in the market place. A clear example of a local multinational company profitably pioneering environmental procurement is Marks and Spencer plc. This has direct impacts on local firms supplying fresh produce as they must meet the criteria of their strict procurement policies.
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Individuals: The Co-Operative Bank found that a quarter of their study had advised another person for or against a company due to their corporate image.
Policy and Legislation The EU has developed strict procurement legislation including the consolidated directive adopted in 2006. Whilst this has not been adopted in Jersey, is does impact on any company operating in the EU market place. The consolidated directive provides a framework for inclusion of social and environmental considerations in procurement activities, which will particularly effect those supplying public sector clients in the UK.
Sustainable procurement is a fundamental requirement for socially responsible companies. Further information and case studies are available through this link: http://www.bitc.org.uk/
Benchmarks/Targets ‘Doing more with less’ – The UK Sustainable Procurement Strategy highlights targets (in Annex B) for different areas of interest. These include reducing waste arisings by 5% and carbon emissions from operations transport by 15% by 2010. Also see further best practice guidelines in the, ‘What Next?’ section.
How much can I save by procuring environmentally friendly goods? Buying green does not need to cost more. Remember it is about being efficient, ethical and environmental. Link your procurement decisions to how the products are used within your business. Start by asking yourself the following questions: 1. Do we need this product at all? 2. How can we use less of this product? 3. Are there any other similar companies who I could team up with to buy in bulk and take advantage of cost savings? 4. How can we work with our suppliers to bring down prices – ask them – you may be surprised! Tell people about what you are doing, use your green credentials to increase market share. Providing a high standard of environmental goods will opens up new channels of trade and ensures that any existing channels are not closed due to changing public concerns. Sustainable procurement requires a whole life costing to be conducted as opposed to a purchase cost analysis. This process alone will ensure that the most economically viable option is selected – for example it would ensure that a computer monitor that is required for 4 years could be selected that may be more expensive at purchase but recoup these savings through reduced electricity use. This is summarised in The States of Jersey Procurement Policy that identifies that, ‘a whole life cost approach to each procurement shall ensure that not only the environmental benefit but an economic benefit can be identified’.
What should I do first? The table below provides some basic information on the initial measures that could be taken to improve the environmental aspects of your businesses procurement. Further measures, especially those that are specific to relevant sectors are provided in the links below.
Who can help me? The States of Jersey procurement portal provides information on supplying the public sector in Jersey. www.gov.je/procurement
What next? Use the table below to identify some actions that you can take to improvement your sustainable procurement activities.
If you have considered the options outlined in the table and want to take further measures why not consider some of the following websites. Tips for specific sectors are highlighted accordingly: ·
http://www.sd-commission.org.uk/
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http://www.idea.gov.uk/idk/aio/69979
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http://www.eauc.org.uk/sustainable_procurement1
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http://www.procurementcupboard.org/
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http://www.defra.gov.uk/farm/policy/sustain/procurement/toolkit.ht m (catering and food procurement)
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http://www.barking-dagenham.gov.uk/6-living/envir-protect/envirsustainability/pdf/responsible-purchasing.pdf (offices)
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http://www.green-office.org.uk/audit.php?goingto=factsheet6
ACTION
Green the top 5 products that you purchase within your business
Write a green purchasing policy – use your power
Description
From your purchasing records see which 5 items you buy most regularly and research the alternatives that are available. Ask your supplier for green options and consider changing to a new provider. Click the ‘green products only’ on your suppliers website This could be part of your environmental policy or a separate document. You can green your own supply chain by stating that you will only purchase goods and services from suppliers who can demonstrate that they are working towards high environmental and ethical standards.
Establish the base line life cycle of your product.
Whatever product or service you provide establish what is required throughout every stage of the products life from initial purchase to final distribution. This will enable you to review and identify where more sustainable practices can be integrated.
Change the business mindset/Defi ne Approach to procurement
Behaviour must be changed within purchasing departments. The first task is to identify the need for procurement and reduce waste, the second is to integrate the philosophy of life-cycle cost rather than purchase price to determine the most suitable purchase.
Identify environment ally preferable products/App raise suppliers
Although eco-labelling is becoming more popular on end-user goods it can be more difficult to establish in the supply chain. Often the best way to determine this is to speak to your suppliers – by acknolwedging your interest in sustainable produce you are making them aware of the demand.
This is the final step in the process Integrate practice into that spreads the sustainable procurement policy throughout management
Cost Payback
/ Further Info
The costs of environmental procurement are dependant on many factors. A comprehensive review of your products life cycle is required and environmental criteria must be established that determine what you expect from your procured goods. Dependant on requirements these may include suggestions such as packaging is recycled or deliveries are made in bulk/concentrated to reduce transport. These cost savings are complimented by the fact that many ‘green’ products can now be found at the same price as competitors including energy efficient computers, ecofriendly cleaning products and locally sourced foodstuffs. With these measures not resulting in additional costs and like to save money in the long term payback is ensured through sourcing a product based on its value for its complete life cycle as well as achieving maximum access to sustainable markets.
Most large stationery suppliers now carry an environmental range. If not, find one that does or ask your supplier to source green products. Make sure you choose the green option.
http://www.greenoffice.org.uk/audit.ph p?goingto=factsheet6
For basic info see: http://www.sustainabi lityed.org/pages/look41.htm For detailed assessment consider ISO 14040 on Life Cycle Assessment See: Sustainable Procurement, Making it Happen http://www.idea.gov.u k/idk/aio/69979
Conduct research into the types of sustainable produce that are available on the National and International markets. Then consider whether these standards can be achieved locally and speak to your suppliers about improving standards. This is the process of drawing up your final procurement policy
systems
your business.
and integrating it throughout the business. There are many examples of procurement policies available online.