Environmental responsibility is usually defined within the confines of emission reduction targets or waste management, but what about purchasing? How, David Howell asks, can a business’s environment manager buy “green” to improve its corporate social responsibility?
How businesses source and purchase products and services is increasingly coming under scrutiny. Businesses and organisations need to communicate their CSR through many channels with environmental managers tasked with delivering these messages.
The key is for environmental managers to develop a procurement supply chain that enables them to buy from suppliers that themselves have high environmental credentials. This feeds back, enabling sustainable procurement to become the norm.
Considering its stance as a public body, the BBC states: “Sustainable procurement means improving the efficiency by which public money is spent while at the same time using market power to bring about major environmental and social benefits locally and globally. It is the process of purchasing goods, services and works that take into account the social, economic and environmental impact that such purchasing has on people and communities while still achieving value.”
What is clear is that the need to “buy green” is now a commercial, environmental and social imperative that all environmental managers should be actively working towards. Procurement is a major component of operations: developing environmentally aware purchasing policies not only delivers improved CSR but can also have a beneficial social and economic impact.
Taking a more holistic approach to purchasing can indeed affect many aspects of an organisation. The European Pathway to Zero Waste, Waste and Resources Action Programme (WRAP) concludes:
“A sustainable procurement policy signals the buy-in at the highest level of the organisation and articulates the ambition and intentions. It also provides a mandate for action by budget holders as well as procurement practitioners and can also help to motivate staff, raise awareness and the profile of the benefits associated with procuring sustainably. Externally, it promotes co-operation and dialogue with stakeholders, clients and the supply chain, and influences the market to develop more sustainable products and services.”
Niclas Rydell, Product and Certification Director at TCO Development — a third-party environmental and social responsibility certifier for electronic goods, was asked if organisations find it difficult to support their CSR and environmental credentials with sustainable procurement and responded:
“Yes and no. Yes, because the sustainability criteria for procurement could have counteractive effects (cost is often the first to be affected), regulations do not always fully support sustainability criteria, there is often a lack of political guidance as well as knowledge about the specific product or service, specific responsibilities can be unclear. And there can be little to no dialogue between procurers and vendors.
What are the barriers that environmental managers have to overcome to have a better environmentally friendly supply chain to their businesses?
“If we take for example IT products, the supply chain is very long and complex. Most environmental managers do not have knowledge of their supply chain past the second tier. Global supply chains also bring many challenges as it is quite difficult to adapt to so many different countries, regions and their varying regulations, cultural differences and language barriers. It is also difficult to have oversight and control of all parts of a global supply chain due to sustainability aspects such as working conditions, chemical use, etc, which can differ locally between suppliers.”
Are there any businesses or sectors that you think show particularly good environmentally positive procurement?
“At the moment, we see that public sector procurers in Northern Europe, including Denmark, Sweden, Finland, Norway and Germany, all set high standards for their IT-procurement. Encouragingly, from our experience, we also see that banks in Nordic countries, including Swedbank and Nordea, and insurance companies like if P&C and others are doing the same. We are also seeing a reassuring trend in large retail companies that already have high ambitions and standards with regards to environmentally sustainable procurement such as H&M and IKEA.”
How do you think the supply chain itself needs to change in order to offer more environmentally positive procurement?
“We believe that to induce a tangible change, responsibility for sustainability must be given to a particular party. For example, in the TCO Certified program we have defined that the brand owner must be the one to take on that responsibility. Within this system, it is therefore clear who will drive the change towards more environmentally sustainable procurement and be held accountable with consequences when problems occur.
“The brands in global supply chains need to be held responsible for the whole supply chain. In terms of the outcomes from not properly addressing CSR, health and safety and environmental aspects, there are unfortunately many well-known examples from several sectors, including textile, shoes, electronics and jewellery.
“And there needs to be some kind of common agreement between customers and companies that monetary price should not be the first and foremost deciding factor for the procurement process. We all have to pay the real cost for the whole life cycle.”
Are there any key areas of an organisation that environment managers can use as easy wins when improving their business’ green credentials through procurement?
“The result of various risk analyses of which products cause the greatest sustainability risk in procurement have found that IT products, such as desktops, laptops, monitors, printers, tablets and smartphones, are a risk-group in which violations of human rights and environmental challenges are occurring.
“Changing the procurement habits towards purchasing more sustainable IT products could be an easy step to avoid the biggest risks for an organisation. For IT and other products, there are also reliable third-party certifications that help procurers set realistic criteria and conduct the follow up for you. If a product has a third-party certification, procurers will be able to find out exactly what standards the product has been kept to throughout the manufacturing process.”
Environmental managers need then to ensure their businesses or organisations are committed to developing their procurement supply chains with the view to bolstering their environmental credentials.
It is vital to appreciate that enhancing procurement will have a number of components that must be managed together. Embedding sustainability into all procurement practices will eventually deliver the improvements in CSR that are demanded, but this is an evolutionary process that environmental managers will have to guide.
Last reviewed 7 December 2015