The Power of Sustainable Procurement

Transcription

1 The Power of Sustainable Procurement Joanne Gorski, President & CEO CSCP, CFPIM, Green Manufacturing Specialist Joanne E. Gorski 25 years of business and educational experience spanning Fortune 100 companies and college faculty APICS CFPIM, CSCP, CSCP SME Green Manufacturing Specialist ISO Auditor: 14001, Sustainable Event Alliance: Accredited Professional, Auditor MBA University of WI, BSBA The Ohio State University Ironman 1

2 Session Overview Answer three key questions What is sustainability? What is sustainable procurement? Why is sustainable procurement important? Explain the six steps to sustainable procurement Why Sustainability? 2

3 What is Sustainability? There are as many definitions of sustainability as there are groups trying to define it Key concepts Balance environmental, social, and financial outcomes Ensures current needs are met without compromising the ability of future generations to meet their needs Activity: Imagine Your Favorite Things What resources are needed? Do they have limits? How does the sourcing/use affect the environment? Today we will explore steps to ensuring their future 3

4 What is Sustainable Procurement? The process of acquiring goods and services that: Meets the user s need Delivers long term value for money Maximizes social and economic benefits Minimizes damage to the environment and health Source: Power of Sustainable Procurement Purchasing is the gateway into your organization Setting guidelines and criteria transfers controlover sustainable performance to your organization Drives marketplacetoward adopting sustainable practices for long-term improvement Purchasing dollars = power! 4

5 Criteria for Sustainable Procurement Encourages the use of recycledor sustainably produced materials Ensures fair labor and compensation Drives the reduction of waste Avoids harmful/toxic substances Ensures compliance with environmental andsocial legislation Six Steps to Sustainable Procurement 1. Create a sustainable procurement policy 2. Develop supplier specifications based upon sustainable development criteria 3. Identify key metrics 4. Work with suppliers and potential suppliers 5. Evaluate supplier performance throughout procurement cycle 6. Document and implement improvement opportunities 5

6 Six Steps to Sustainable Procurement Step 6 Document and implement improvements Step 1 Create Sustainable Procurement Policy Step 2 Sustainable Development Criteria Step 3 Key Metrics Act Plan Check Do Step 5 Evaluate Supplier Performance Step 4 Work with Suppliers A Sustainable Procurement Policy Provides guidelines for organization to follow Ensures adherence to principles of sustainable development Minimizes supply chain risk Controls costs Enhances brand reputation Ensures compliance with environmental and social legislation 6

7 A Sustainable Procurement Policy Define purpose of policy The Big Green Sustainable Music Festival recognizes and is committed to our responsibility to procure resources in a manner consistent with the principle of sustainable developmentand the mission of our event. We strive to make purchases in a manner that balances social, economic, and environmental goals. A Sustainable Procurement Policy Define key sustainability objectives Evaluate all the significant sustainable development issuesassociated with your organization and create procedures to manage them in a responsible manner. Support local business to strengthen our community Minimize solid waste Use local sourcing Promote fair working conditions Protecting habitats and biodiversity Minimize water waste Minimize use of fossil fuels Measures and targets for each objective will be defined and measured annually or more frequently as needed. 7

8 A Sustainable Procurement Policy Define scope of sustainable procurement This policy applies to all aspects of purchasing activities for The Big Green Sustainable Music Festival. Purchasing shall incorporate fiscal responsibility, social equity, community and environmental stewardship in all procurement decisions. Life cycle costing, where relevant, will be used to evaluate the long term value for purchase decisions. A Sustainable Procurement Policy Identify level of performance desired It is the goal of our organization to go beyond basic legal compliancein the context of sustainable procurement in our organization s practices. Through the use of supplier requirements and evaluation sustainability values will be built into The Big Green Sustainable Music Festival s supplier strategies. The level of sustainable performance will be identified for all identified key areas of spend or prioritization. 8

9 A Sustainable Procurement Policy Identify level of performance desired What is defined in your organizational sustainability plan? Has your organization made any outside commitments such as signed the UN Global compact? Does your organization have any green labels, seals, or certifications? Examples: Fair Trade, LEED, Green Seal, Forest Stewardship Council, Greener Choices, Cradle to Cradle Certified Any of the above listed commitments need to be included in your policy A Sustainable Procurement Policy Create process for assessing suppliers during tender evaluation Purchases will be made using the best practices available in sustainable procurement, and evaluation techniques will be updatedas best practices evolve and improve. This may involve new standards, procedures, etc. as practical. 9

10 A Sustainable Procurement Policy Create process for assessing suppliers during tender evaluation Suppliers will be evaluated and assessed based upon sustainability criteria developed into a scorecard. Suppliers will be encouraged to propose improvements and sustainable solutions that support the overall purpose of this policy. Suppliers will have input into the evaluation process and given reasonable time to adjust to the evaluation criteria. A Sustainable Procurement Policy Ensure supplier performance requirements are in line with your own organizational expectations Don t expect more of suppliers than you do of your internal organization 10

11 A Sustainable Procurement Policy Aiming for Measurable Improvement Targets & measures Sustainable evaluation criteria Objectives Scope Supplier specifications based upon Sustainable development criteria Risk Assessment on key spends Many methods available (ISO 31000) Prioritize key risks Decide for key risks: Do nothing Share risk Reduce risk Avoid 11

12 Supplier specifications based upon Sustainable development criteria What are the big issues for your industry? What are the results of your impacts assessment? How are your suppliers and partners managing their risks? Critical issues/risks in your industry? Locations? Markets? Supplier specifications based upon Sustainable development criteria Think efficient and cradle to cradle Input Process Output Product End of Life What you buy What you do In your organization What your customer gets Where product ends up responsible materials sourcing responsible transport recycled content efficient low emissions nonhazardous minimal packaging transportatio n efficient maximize recyclability non-toxic Feedstock for other products Avoid landfill 12

13 Supplier specifications based upon Sustainable development criteria Significant Environmental Aspects (from ISO 14001) Identify environmental aspects of organization s activities, products or services that you can have control over Determine the aspects that have significant impacts on the environment Manage the significant environmental aspects Supplier specifications based upon Sustainable development criteria Significant Environmental Aspects (from ISO 14001) Frequency (Actual Use) Frequency of use at the facility. Scale 1 to 5. Quantities Volume of aspect involved based on actual quantity and/or regulatory impacts. Scale 1 to 3. Controlled Control of aspect through environmental permits, regulations, or not controlled. Scale 1 to 3. Severity Relative to risks to environment (air emissions, land, water, etc.), employee safety (toxicity, exposure), and/or resource reduction. Scale 1 to 5. Effect on public image or concerns of interested parties (employees, community, government, etc.). Scale 1 to 5. Add each of the individual aspect rankings together for a maximum score of 21. Total rankings 15or greater are considered significant environmental aspects(sea). 13

14 Supplier specifications based upon Sustainable development criteria Aspect Team Process / Activity Unit Facility Area Waste Resp. Disposal, Physical Stream Controls Frequency Quantities Severity Controlled Public Image RANKING Clean Station 1 ABC Cleanline 300 gal/unit Clean line Waste water Operator, Maintenance ph control, wastewater permit Supplier specifications based upon Sustainable development criteria Prioritized Spend Results Sustainability Specifications Significant Environmental Impacts Key Sustainability Risks 14

15 Supplier specifications based upon Sustainable development criteria Solid Waste Significant Environmental Aspect Food Vendor Specifications Use compostable serve ware from approved sources Must attend one waste minimization workshop All goods and services must be approved and consistent with event mission and values Keep disposable items to a minimum Supplier specifications based upon Sustainable development criteria Standards ISO ISO LEED Certifications Processes Attribute Minimum Standard of Performance Forest Stewardship Council FSC Fair Trade Certified Green Seal Energy Star Organically grown Cage free Grass fed Chlorine free paper Locally sourced GMO free % recycled content Water footprint Carbon footprint Miles per gallon Useful life 15

16 Key Sustainable Metrics SMART Specific Measurable Attainable/achievable Relevant Time bound Key Sustainable Metrics Example for paper company with objective to increase their sustainably sourced wood and paper products Year Target % of FSC Certified Fiber % % % 16

17 Key Sustainable Metrics How does this fit our criteria? Specific company goal for each year Measurable can be quantified Attainable/achievable based upon reality Relevant addresses significant environmental impact Time bound gives measures for each year Key Sustainable Metrics Helpful tips Use existing industry benchmarks, certifications and frameworks Start with smaller scope, then expand What you measure, you can manage and thus change 17

18 Key Sustainable Metrics APICS Fox Valley Example Sustainable Company of the Year Award Categories Quantitativ e Evidence Soft Evidence In Process Negative or Not Addressed Score Profit % of spending done with locally based suppliers at significant locations of operation % of employees earning a living wage or higher Positive economic value generated and distributed through business operation Measurement of gender pay equity among employees Third party certifications for sustainability Planet Measurement of direct and indirect energy consumption with reduction plan Total water withdrawal measurement with reduction plan Total solid waste sent to landfill with reduction plan Total materials used by weight and % recycled or diverted away from landfill Weight of materials generated deemed hazardous by local or international standards Green/sustainable supply chain policy in place Measure GHG emissions Scope 1 & 2 Active Environmental Management System (EMS) in place People Active Green Teams with goals and measurements that meet on regular intervals Published Sustainability Plan w/ continuous improvement process Communicate sustainability goals and results to all employees at least twice a year Formal or informal sustainability training Provide continuing education and measure hours per employee Community outreach provided and measured % of employees who receive regular performance and career development reviews Total Score Work with suppliers Communicate goals, process, timeline This should not be the first time supplier learns about this initiative Education internal and with suppliers Implement program 18

19 Work with suppliers Education Waste Hierarchy Waste is the result of poor design Prevent Reduce Reuse Recycle Energy Recovery Disposal Most Favored Least Favored Work with suppliers Education Conduct a waste audit Sort waste Measure waste Apply waste hierarchy Involve supplier and employees Create waste reduction plan Elementary school food waste 19

20 Work with suppliers Education What a Waste! You bought it You paid to transport it to your organization You paid to move it to a dumpster You paid to ship it to landfill You paid a tipping fee to dispose of it Elementary school food waste Work with suppliers Education Hazardous Substances/ Toxics Best to avoid using hazardous/toxic materials Conduct life cycle cost analysis to evaluate different processes Keep looking for new technology / processes if not currently feasible 20

21 Work with suppliers Education Green Chemistry Sustainable practice of chemical science and manufacturing within a framework of industrial ecology that is safe, non-polluting, consuming minimum amounts of energy and material resources while producing virtually no wastes. Source: Purdue Research Foundation Included in Green Manufacturing Specialist BOK Work with suppliers Education Buy less is this item really needed? Can we use less of it? Rent, hire, or borrow instead of purchasing Buy things that are reusable & durable Buy a useditem in good repair Buy things that can be recycled Buy things that have a low environmental footprint Buy things that are non toxic Buy things that are made with fair labor and responsible manufacturing processes Buy things made from sustainable materials Does someone in organization already have one that can be shared? Buy from a local source if possible 21

22 Evaluate supplier performance Evaluate and measure supplier performance Provide feedbackon regular intervals and as needed Gather feedback from supplier: What is working well What is not working well Potential improvements Document and implement Improvement Document lessons learned Incorporate improvement opportunities into review process Implement changes as needed 22

23 Create Your Organizational Action Plan Sustainable Procurement Steps 1. Have a sustainable procurement policy In-place at your organization? Yes/No 2. Have supplier specifications based upon sustainable development criteria Yes/No 3. Have Key metrics/scorecards Yes/No 4. Working with suppliers and potential suppliers Yes/No 5. Evaluating supplier performance throughout procurement cycle Yes/No 6. Have documented and implemented improvement opportunities Yes/No Contact Information Joanne Gorski Joanne.Gorski@sustainableinsightsllc.com Website: 23

24 Survey 24