Supporting the environment by developing an integrated green procurement policy is now vital for all organisations. Dave Howell reports.
For organisations, corporate social responsibility (CSR) and the continued drive towards greener procurement continues apace. With a market that is awash with products and services that purport to offer a complete and comprehensive green solution to businesses, facilities managers (FMs) initially need to educate themselves. Matching the needs of their organisations with the available products and services enables a procurement system with environmental credentials at its foundation to be developed.
However, cost has become a major driver for all businesses over recent years, although it is possible to improve the green credentials of any business with cost-effective procurement. For instance, Loughborough University is using power management technology across its fleet of 1700 PCs and has reduced annual carbon emissions by 34,000kg and saved 45,000kWh per year for the past two years.
“PC power management technology is helping Loughborough make a significant contribution to the university’s aim to cut its carbon footprint in half by 2016,” commented Ashley Leonard, CEO of Verismic, the developers of a PC power management application. “Similarly, in the US, Curtin University has saved 1,215,000kg of carbon emissions from 8500 PCs. Power management makes it easy to manage energy consumption and can be deployed and operational in less than two days. That is an easy win for all FMs.”
Organisations surveying their businesses with the task of supporting CSR and ensuring full compliance with environmental legislation, taking a holistic view of their organisation’s use of energy and how purchasing can be improved, can deliver real world results. Many FMs, however, need to begin by defining what a green business is before they consider how their procurement systems can be improved.
Ben Verwaayen, Chairman, CBI Energy and Climate Change Board and Chief Executive Alcatel-Lucent, says: “As a business community of the leading companies in the UK, we believe that tackling energy and climate change challenges is one of the single biggest opportunities for our century. It is not an obstacle that is conditioned by tough economic times. Business has proven that green can lead to growth through low-carbon investments and new innovation. And business investment in sustainable solutions can also create tremendous opportunities for economies across the globe, particularly in today’s connected world.”
Croner spoke with John Corbett, Director UK, EnOcean, and began by asking: “How much pressure do FMs now feel to buy ‘green’ when raising procurement orders?”
“Facility managers at larger companies have a huge obligation towards green initiatives,” John replied. “The label ‘green’ has an important impact on the value of a building and a business. With the establishment of green building certifications such as LEED, the ‘green’ image developed from an excessively used term to a label proved by measurable criteria. In addition, ambitious governmental goals and rising energy costs result in a fast growing need for energy-efficient buildings.
“To keep the implementation hurdles at a minimum, there is a need for innovative, sustainable technologies which can be easily installed at relatively low cost, especially in retrofit projects. This drives adoption of solutions such as energy harvesting wireless systems for building automation.”
Is CSR now part of an FMs remit when the environmental credentials of their organisations are considered?
John continued: “Corporate social responsibility is something mainly driven as a goal by the largest companies. It’s a main part of a company’s sustainability strategy and a main driver for a good reputation. Bigger concerns are more observed by the public and normally realise larger projects with a higher awareness. Therefore, the need for CSR strategies is higher here.”
What is your core advice to managers tasked with buying “greener”?
“Energy costs and the environmental impact of energy use are key areas for becoming green and achieving an improved carbon footprint. Driving energy saving not only has an environmental impact; it also benefits the company bottom line. Today, FMs have access to a comprehensive range of automation systems on the market, which significantly help to save energy. It is important that FMs catch up on the technological possibilities of these systems.”
Derek Duffill, CEO, Energy Works PLC also commented: “Investing now is essential to reap the benefits in the future. Due to the economic landscape and threats of future price hikes, now is the time for companies to look for ways to save money, so investing in new 'green' technology is understandably perceived as a lower priority as money is diverted from the core business needs. However, for companies looking for Capex free solutions there are plenty of green schemes out there that can unlock profit through energy consumption reductions over a long period of time.”
Are there any key areas of an organisation that managers can use as easy wins when improving their business’ green credentials is concerned?
John continued: “Main areas are the automated control of heating and lighting which can significantly reduce energy usage. When evaluating strategies for increased energy-efficiency, the selected solution should combine low effort and reasonable costs with an immediate effect.” How far is environmental legislation impacting on the procurement process?
John concluded: “The Carbon Plan, first published in 2011, set out the Government’s proposals to reduce the UK’s greenhouse gas emissions by at least 80% by 2050. Well, 2050 seems a fairly long way off and it’s not clear that it is having a big impact, yet. But there is a trend towards goals being set that translate from environmental legislation. For example, the requirement for UK-listed companies to have to report on their greenhouse gas emissions as part of their annual directors’ report or the governmental support of clean-tech solutions.”
Companies that are developing their own green initiatives, using EPP (Environmentally Preferable Purchasing) is a key aspect of these plans. Looking closely at all purchasing with a critical eye for life cycle, manufacturing credentials and recycling levels will give all organisations a much clearer indication of where along the road to sustainable purchasing their businesses are.
FMs also need to take a wider view of their businesses and connect with a diverse audience to develop their green procurement plans. Often, focusing too closely in the replacement of hazardous chemicals can mean, for instance, that FMs do not see the wider environmental impact other, less-obvious, systems have on the environmental effect of their organisations. Procurement is a complex and multifaceted system that needs to be approached with a detailed and parallel view that considers more obvious areas where green procurement can be improved, alongside those areas that are perhaps less obvious, such as HVAC systems.
The Forum for the Future, which has looked closely at public sector procurement, says: “All products and services create social and environmental impacts throughout their lifecycles, from employment and waste to emissions and changing land use. The UK public sector spends over £150 billion a year on procurement, sourcing goods and services from around the world. This represents a huge opportunity for enhancing the environment and quality of life by choosing the right goods and services. Through clear leadership the public sector can improve the sustainability of its own supply chain but also encourage the development of new, more sustainable products and services.”
FMs in every sector clearly need to pay more attention to the environmental credentials of their procurement processes. A detailed audit of current practices is vital as an initial first step. As procurement is a complex process, FMs need to take time to understand the core drivers behind their moves to greener procurement. Only then can goods and services be identified and vendors placed within a potential procurement pool.
Ultimately, FMs will need to balance several factors that include compliance, CSR, cost reduction and sustainability to design a new green procurement platform that meets all of their requirements. Moving to more environmentally sensitive procurement is entirely possible without a cost imperative. FMs need to become smart and understand how green procurement can work right across their organisations. As John Cridland, Director-General, CBI concludes: “‘Green’ and ‘growth’ can go hand-in-hand, but in the current situation there are no guarantees. If the UK is to reach its full potential as a global green market leader, we have to be smarter in our approach.”
Last reviewed 10 December 2013