SUPPORTING SUSTAINABLE PROCUREMENT

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1 SUPPORTING SUSTAINABLE PROCUREMENT CIPS Event Basel, Switzerland, March 2014 Pierre Boccon-Gibod Global Sustainability Services Senior Sustainability Consultant

2 AGENDA Is Sustainable Procurement only about reducing risk? Procurement and Sustainability What type of requests I receive about Sustainable Procurement Minimum Level Avoid Green/Social washing Beyond the balance sheet Take home message 2

FOOTPRINT GHOSH, PROP65 DESIGN Choosing Technologies Functional Specifications PROCUREMENT Select eco

3 SGS PRAGMATIC APPROACH, THE GREEN FORWARD METHODOLOGY WEEE, ROHS Norms and Regulations EHS Data LCA REACH MARKET INFORMATION Corporate targets Product Tests Environmental Labeling Quality Procurement policies CARBON FOOTPRINT GHOSH, PROP65 DESIGN Choosing Technologies Functional Specifications PROCUREMENT Select eco products Supply specifications SALES & COMMUNICATION Choice of subjects Robust claims Procurement will be today s focus! 3

4 IS SUSTAINABLE PROCUREMENT ONLY ABOUT REDUCING RISK? Sustainability emerged in a wide and wild world Economical, environmental and social crisis, raw material fluctuations, increasing outsourcing to low cost countries, Why is Sustainable Procurement implemented? (survey) Many decisions are about reducing direct cost Sustainable Procurement is about understanding global cost From Reducing Risk to Enabling Opportunities 4

5 PICTURE OF CSR AND PROCUREMENT TODAY Procurement is most of the time involved in CSR Even sometimes at the origin of it! Thus some CSR objectives are Procurement related Some examples of KPIs tracked % of suppliers audited/answered/non-compliant Number of buyers trained Safety related But there are Obstacles which are due to a lack of Clear objectives at the Procurement level (not pragmatic or meaningful) Resources with expertise Clear objectives at the Corporate Level Metrics and tools Sometimes lead to «Green Projects» rather than deep implementation 5

6 SUSTAINABLE PROCUREMENT INSIGHT Design Procurement Sales Need definition Reverse Marketing RFI/RFP Contract Delivery Spec. Suppliers selection Contracting Supplier Follow-up LCA Questionnaires Policy Audits Ecodesign Risks mapping Criteria KPIs Many actions : Focus on 2 sort. (green and blue) 6

7 TYPE A : MINIMUM REQUIREMENTS Set the cursor between Regulatory and Corporate req. Social and Environment top-up the policy in place «Have a water meter» or «Be connected to public sewage» But needs to be linked with clear and robust aspects related to the category of suppliers or products or geographical zone. The «business enabler» for suppliers, most of the time Ex web based tools for social/env., what about Metrics? The «black box» for procurement managers Time consuming if not correctly defined and when elements are needed afterwards Specific project requirements Non-compliance on products supplied 7

TYPE 2 : AVOID SOCIAL/GREEN WASHING Some of your suppliers have «green» or «social» claims Or your corporate guidelines expect «environment friendly» products to be supplied May be difficult to make

8 TYPE 2 : AVOID SOCIAL/GREEN WASHING Some of your suppliers have «green» or «social» claims Or your corporate guidelines expect «environment friendly» products to be supplied May be difficult to make the difference within all the claims Eco-label 1, 2, and 3 + site information/certification May be difficult to identify the ones meaningful to your sector (or different from minimum compliance ) Eee 8

9 EXAMPLE : HOW MISLEADING? / HOW ROBUST? Think about a plastic container or element: Bioplastic made with sugarcane With Greenclaims which are the following : Compatible with CSR Strategies Meaningless Contributes to a reduced carbon footprint How much? Only carbon? 87% biobased content (proven with a lab test) What are the other 13% Made out of renewable material Sustainably produced? Recyclable material Minimum expected, no? daz How would you consider it? Think twice! The elements above are not enough to qualify a product and/or are misleading. The products needs further investigation/verification (sustainable sugarcane production certification, functional analysis of the packaging, social conditions ) Similar cases seen everyday, everywhere 9

10 PRODUCT FOOTPRINT OF A RETAILER excluding 10

11 PRODUCT FOOTPRINT OF A RETAILER The production, distribution and use of products represents more than 90% of the total impacts of the retailer, so are risks, and opportunities! 11

12 TYPE C : BEYOND THE BALANCE SHEET Considering the total cost of the product Acquisition cost Ownership cost Possession cost Use cost Buying cost Maintenance cost End-of-life aspects Legal aspects Total Cost Reputation aspects 12

13 WHAT IS INCREASING IN SUSTAINABLE PROCUREMENT? Pragmatic Ecodesign Ecodesign Criteria Suppliers Improvement & Environmental + Social Audits = GreenForward 13

Environmental permit Management system 8 ENVIRONMENTAL ITEMS GLOBAL COVERAGE Pollution control & Resource conservation Water use Waste management Waste Water Waste gas, air emissions Hazardous

14 Environmental permit Management system 8 ENVIRONMENTAL ITEMS GLOBAL COVERAGE Pollution control & Resource conservation Water use Waste management Waste Water Waste gas, air emissions Hazardous substances (potentially) Noise Audits Emergency Preparedness and Response Energy use, Transport and Greenhouse Gases (GHGs) Contaminated Land / Soil and Groundwater Pollution Prevention Land use and biodiversity Nuisances 14

15 Audits IMPROVEMENT AND ENVIRONMENTAL AUDITS 2 days Compliance Environmental Assessment Compliance and Continuous Improvement Environmental Audit Support your suppliers to achieve Conformity level or Support your suppliers against their Environmental Footprint Improvement, up to the conformity scope. 15

16 CONFORMITY Audits IMPROVEMENT AND ENVIRONMENTAL AUDITS ROADMAP SGS supports and drives the supplier to awareness and understanding of local regulations. Training is adapted to their needs. Not a penalty audit but a partnership that helps rebuilding the supplier s processes Risk profiling and key conformity indicators Training & Coaching Self Assessment questionnaire & Preliminary Evaluation. Initial On site Audit 16

GreenForward SGS UNIQUE POSITIONING Our vision: LCA is just a eco-design tool and not the solution to any ecodesign problems Ecodesign should not only

Ecodesign should speak to marketers, purchasers and R&D engineers Ecodesign should be pragmatic What are the needs of customers?

17 GreenForward SGS UNIQUE POSITIONING Our vision: LCA is just a eco-design tool and not the solution to any ecodesign problems Ecodesign should not only be understandable by ecodesign experts. Ecodesign should speak to marketers, purchasers and R&D engineers Ecodesign should be pragmatic What are the needs of customers? Translate environmental complex data into easy to understand information for buyers, R&D engineers and marketers. Consider use phase and resource efficiency Add environmental criteria into product functional specification Build a straightforward communication Offer a robust methodology 17

GreenForward PRAGMATIC ECODESIGN AND CRITERIA Lab tests Purchasing Recommendations for hand-drying systems Which products to choose according Hygiene and

18 GreenForward PRAGMATIC ECODESIGN AND CRITERIA Lab tests Purchasing Recommendations for hand-drying systems Which products to choose according Hygiene and Environmental aspects Experts based, time saving, updatable and expendable approach Cnezui Site tests LCA approach Specific equations Jcezio Jceizop Jcezop Hczeio Cejzio Cjezio 18

19 GreenForward PRAGMATIC ECODESIGN AND CRITERIA Procurement specifications for mattresses Experts based, time saving, updatable and expendable specifications 19

20 IT S A GLOBAL WIN Corporate level Reputation and public image Company valorization on public markets Better management of environmental and social risks Additional revenue from diversification Pragmatic Innovation Stakeholder involvement Procurement Reduction all along the life-cycle (energy, raw materials, efficiency, ) Increased quality and reliability of product/suppliers thanks to upstream involvement Professionalization by homogenization of practices Efficient tailoring between CSR, Corporate and Procurement targets 20

SGS PRAGMATIC APPROACH, THE GREEN FORWARD METHODOLOGY WEEE, ROHS Norms and Regulations EHS Data LCA REACH MARKET INFORMATION Corporate targets Product Tests Environmental Labeling Quality Procurement

21 SGS PRAGMATIC APPROACH, THE GREEN FORWARD METHODOLOGY WEEE, ROHS Norms and Regulations EHS Data LCA REACH MARKET INFORMATION Corporate targets Product Tests Environmental Labeling Quality Procurement policies CARBON FOOTPRINT GHOSH, PROP65 DESIGN Choosing Technologies Functional Specifications PROCUREMENT Select eco products Supply specifications SALES & COMMUNICATION Choice of subjects Robust claims 21

the GSCP work on Social & Labour Management Systems for Suppliers

the GSCP work on Social & Labour Management Systems for Suppliers World Banana Forum - 18-19 December, 2012 Didier Bergeret Global Social Compliance Programme Global Social Compliance Programme Solution