Green Procurement: Purchasing for a Sustainable Future
From www.entrepreneurstoolkit.org
Contents |
What is "Green Procurement"?
Rising waste-disposal costs, stricter environmental legislation, demands for increased corporate accountability, and mounting liability concerns are reforming traditional business practices. In response, companies and governments are looking for environmental leverage points in the market place.
A growing number of businesses and government agencies are discovering that the power of their purse can accelerate the availability of greener, cleaner products. By specifying minimum recycled content, improved energy efficiency, or reduced toxicity in their tender specifications, demand from these buyers is beginning to dramatically increase the supply and quality of a broad range of environmentally superior products.
An expanding number of certification and labelling organizations are available to evaluate supplier claims. Many voluntary programs sponsored by such organizations as the U.S. Environmental Protection Agency are also stimulating manufacturers to offer a variety of environmentally improved products. Green product directories, public and private sector purchasing guidelines, and a few of the more innovative trade associations also provide assistance in identifying and obtaining environmentally superior goods and services.
"We're the people who spend money. We have the cheque-books and suppliers have to give us what we want, not the other way around,"said Mike Cleveland, purchasing manager with Keystone Cement Company, Bath, Pennsylvania, at a Buy Recycled Workshop in Allentown. His attitude is becoming the norm and suppliers had better listen. AT&T, General Motors, S.C. Johnson & Son, and Xerox are among the growing number of corporate giants asking suppliers to become more environmentally responsive.
Responding to Customer's Stated Intentions
From gentle nudges to new purchasing specifications to threats about taking business elsewhere, buyers are making their new purchasing intentions known. Suppliers that respond quickly and effectively can retain valued customers and even increase sales.
Ace Hardware Corporation tried the hard ball approach with suppliers in 1991. It sent a letter, questionnaire, and environmental policy statement that said, "The Paint Division will begin conducting audits of all our vendors during 1992 with special emphasis on safety and environmental issues. We reserve the right to immediately cancel any business awarded to a vendor found to be in noncompliance with any applicable federal, state, or local regulations, or who ...shows blatant disregard for the best interests of our environment..." A few non-responsive suppliers were dropped, but most were cooperative, though surprised.
When Xerox Corporation decided it wanted standardized packaging with bar codes at all its plants, it actively assisted suppliers in making the transition. A letter and information packet describing the program were coupled with a day long training session, complete with brochures and a 16-minute take-away video. In autumn 1993, the company's Environmental Leadership Program released a Business Guide to Waste Reduction and Recycling. Smart suppliers will read it thoroughly, act on the suggestions, and actively market products and services that will assist customers to adopt the recommended practices.
"No one can wield the power of the purse more effectively than a big company, and General Motors, the United States' largest manufacturer, has figured out that by leaning on its suppliers, it can save both cash and trash", Joel Makower wrote in The E Factor.
A program to eliminate packaging waste, begun by GM's Chevrolet-Pontiac-Canada Group, has gone North America-wide. Since January 1, 1994, GM's midsize assembly plants take no more shrink wrap, pallets, foam peanuts, cardboard boxes or strapping tape - NO packaging waste. The initiative is a component of the company's WE CARE Program, which stands for Waste Elimination and Cost Awareness Rewards Everyone. Few suppliers are prepared to lose a customer as large as GM. They are more likely to change over their entire packaging and distribution system.
Develop Alliances with other Entrepreneurs
Smaller companies and organizations, with less clout in the market place, are working jointly to influence suppliers. An Ontario initiative, called Governments Incorporating Procurement Policies to Eliminate Refuse (GIPPER), brought together school boards, transit commissions, Canada's largest electric utility, and local, regional, and provincial government agencies to develop a proactive and comprehensive procurement policy. The current focus is on waste reduction. Guidelines have been developed for cleaning products, compost, construction and demolition materials, paint, paper, and packaging. Items for future consideration include plastics and rubber; petroleum, oils, and lubricants; and energy-efficient lighting products.
Entrepreneurs can benefit by tracking the development of these alliances or, better still, by playing a role in initiating them. Look for partners at your local, state or provincial agencies, school boards, trade associations or local business improvement committees.
Use your networks to get ideas from leaders of the pack. Initiatives that work in one setting may well transfer to another. Your investment of time can pay off handsomely. You may forge alliances to develop new products and services or work together to create and tap new distribution channels. And, remember to let your customers know about your leadership efforts.
Demands on Suppliers
Improving the environmental behaviour of individuals, companies, and nations cannot be done in isolation by any one group. The complexity of ecosystems and markets requires that knowledge and efforts be pooled. Two companies stand out in their willingness to act on this awareness.
In February 1991, S.C. Johnson & Son, a consumer products manufacturer headquartered in Racine, Wisconsin, hosted an International Suppliers' Day Environmental Symposium for 57 of its top 70 suppliers worldwide. Titled "Partners Working for a Better World", the meeting discussed international environmental trends and relayed S.C. Johnson's environmental performance goals. Suppliers were asked to recommend strategies for improving the biodegradation and recycling of the company's products and packaging; for reducing waste at all stages of production, distribution, and use; and for limiting the emission of volatile organic compounds in aerosols.
S.C. Johnson has continued the dialogue by publishing a twice yearly Partners newsletter for its suppliers. The following commentary, written by Executive Vice President Barry P. Harris, appeared in the August 1992 issue: Our corporate environmental goals identify 1993 and 1995 as completion dates for a series of improvements to the environmental profiles of our products and processes. We want our partnership with our suppliers to bring forward varied packaging technology alternatives which reflect significant source reduction . We also want our partnerships to bring forward formulation options reflecting reduced environmental impact and requiring less packaging overall. And we want to do it now. Clearly those suppliers who answer our call to action today can most benefit from our continued partnership tomorrow, for they will be the leaders of the new order of corporate environmental activism.
Canadian Pacific Hotels and Resorts also works closely with its suppliers and staff to improve environmental performance. The company's booklet The Green Partnership Guide: 12 Steps to Help Create an Environmentally Friendly Setting for Our Guests, Ourselves and Our Future deals with all aspects of the chain's operations. Advice on improving efficiency, and reducing toxicity and waste, is provided for all staff. Individual sections cover the kitchen, housekeeping, repairs and renovations, stores and purchasing, laundry, grounds, rooms, and food service.
An extensive contacts section lists sources of recycled paper, organic food and wines, phosphate-free dish washing detergents, energy efficient lighting, water-saving fixtures, waste and recycling operations, and environmentally friendly cleaning products, paints, and wood finishes.
The message is clear: if you want to sell to C.P. Hotels, you must provide environmentally superior products.
