18. July 2007 by admin.

Green Procurement Still a Work in Progress

Awareness growing of Procurement’s environmental impact, but few companies incorporating green strategies into their purchasing, BrainNet study finds
By Editorial Staff

Bonn, Germany — July 17, 2007 — Despite growing awareness of the need to safeguard ecological resources, few companies are putting this principle into practice in their buying behaviors, according to a recent study by consulting firm BrainNet.

Given global climate change and the pollution of the environment, most companies are no longer asking whether they want to do something to protect the planet, but rather are considering what they can do.

Procurement policies could have a significant impact on a company’s environmental “footprint,” given that somewhere between 50 and 70 percent of a company’s overall costs originate from purchasing.

However, “green purchasing” so far has had no standard definition. Generally speaking, it is understood to mean the purchase of products and services with minimal negative effects on the environment. This relates to the entire lifecycle of the products, from manufacturing and transport to processing, disposal and recycling.

“More than half of all processes between companies and their commercial, ecological and economic environment are purchasing-related,” says Sven T. Marlinghaus, partner at BrainNet. “Greater focus must therefore be placed on the environment when it comes to purchasing.”

New Criteria in Purchasing Decisions

Purchasing decisions have typically been made based on such criteria as product, quality, coordination or risk costs. A purchase that complies with the principles of green procurement also takes greater account of the costs for environmental damage arising from production, delivery and processing.

So far only a few companies and official organizations in Germany are taking such “green” factors into consideration in their purchasing, according to the BrainNet study. “Fewer than 20 percent of all companies are actively tackling green procurement, and not even one in 10 companies is taking account of environmental costs as a critical factor when making decisions about its expenditure,” notes Marlinghaus. “In the context of a globally oriented procurement organization in particular, this issue is an especially thorny one.”

Studies at both national and international levels have confirmed these trends, BrainNet says. For example, the German Institute for Economic Research estimates the costs of climate change in Germany alone over the next 50 years at 800 billion euros ($1.1 billion). Elsewhere, the United Nations climate report may avoid specific figures, but it comes to the conclusion that there is an ongoing climate change and that it is caused by mankind. Based on these findings, the U.N. report suggests a price for CO2.

The creation of global emissions trading is also one of the key pledges of the Stern Report carried out on behalf of the British government. The team led by Nicholas Stern, the World Bank’s former chief economist, states that the reason for its call for action is that if climate protection is abandoned, costs will be 20times those of the effective reduction of greenhouse gases.

“Eco-friendly processes and an intact ecological system will in the foreseeable future become crucial location and investment factors,” says Josef Schwake, senior vice president for corporate sourcing coordination at Bertelsmann. “The price of a commodity or service is increasingly being influenced by ecological factors. Modern purchasing organizations have to take this into account professionally.”

Green Procurement as Value Driver

This forecast is already being confirmed today. The responses by markets, customers, public bodies and other commercial players to the adherence to, or infringement of, environmental standards have become significantly stronger in recent years. “Over 10 years ago, the tremendous public dynamism surrounding the Brent Spar disaster showed just what severe consequences non-eco-compliant behavior can have on the image and economic constitution of a company,” explains Marlinghaus. “Today the issue is actively driven by customers, analysts and financial markets.”

Confirmation of this development is the “green” fund, Portfolio 21, managed by investment company Progressive Investment Management, which has for years been faring better than the MSCI World Equity Index and S&P 500 Index, for example. The inclusion criteria for the fund stipulate that the companies pay particular attention to environmental aspects in all areas of their activities.

“In this country, an environmental focus is still all too often regarded as a hobbyhorse of idealists,” says Schwake. “That said, it offers solid economic advantages in the medium term and increases the company’s value.”

The partially higher price of “green” purchasing processes is, on the one hand, offset by an improved corporate rating by the financial markets and customers. On the other, a strong ecological orientation increases companies’ planning security. Fossil fuels, for example, which today cover a large proportion of all energy requirements, harbor considerable geopolitical risks and consequently the risk of a significant price increase.

“One in three purchasing managers regard rising raw material and energy prices as a major corporate risk”, says Marlinghaus. “Recycling valuable raw materials and using alternative resources will over the next few years decisively influence companies’ profitability.”

Gerhard Schmitt, purchasing departmental manager at the pharmaceutical research firm Boehringer Ingelheim, sees environmental protection increasingly becoming an area of interest for companies from an economic perspective as well. “It is in this area that competitive advantages arise either over the longer or shorter term that will also influence companies’ procurement activities,” Schmitt says. “In this context, we are increasingly including the issue of environmental protection in the decisions we make about our suppliers.”

Boehringer Ingelheim has made ecological issues an integral part of its corporate policy and culture. Two years ago, for example, the company’s own power plant in Ingelheim was switched from coal to the regenerative fuel wood, a measure that not only massively improved the CO2 balance sheet, but whose cost-effectiveness is still being felt today.

The power plant conversion to wood combines smart ecological with economic benefits, such as the more favorable price of wood compared to hard coal and the independence from rising fuel prices on the world energy markets. “It is worth taking environmental protection seriously in every respect. Purchasing will find its purpose here,” concludes Schmitt.

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18. July 2007 by admin.

Scoop: Public service must go green, not waste spending
Public service must go green, not waste spending
Monday, 16 July 2007, 11:49 am
Press Release: Business Council for Sustainable Development
16 July 2007

Media Release

Public service must go green of face exposure over wasteful spending

The world is going green and the public service wont and cant be separate from that, a carbon neutral public sector conference is being told today.

While moves to have government departments go carbon neutral, introduce sustainable procurement, lease green buildings and buy low emission vehicles might sound cool and trendy, they are also delivering savings for taxpayers and freeing funds for more effective use elsewhere, the Chief Executive of the New Zealand Business Council for Sustainable Development, Peter Neilson, says in opening remarks to the two-day conference at Wellington.

Mr Neilson says property owner Bob Jones is wrong when he says this is a short term fad.

After a slow start, a sleeping giant is rising in the public sector:

• The Govt3 sustainable procurement programme is gaining momentum
• Even the Treasury is able to win an award for halving the amount of rubbish it produces
• Departments and agencies are monitoring their waste and carbon footprints
• Face to face meetings are being replaced with state-of-the-art video conferencing, reducing air travel
• Six agencies are leading off a programme to become carbon neutral
• More fuel efficient and low emissions vehicles are being purchased.

“This is no short term fad. It reflects a worldwide trend in developed countries for taxpayers and consumers to want both a better material standard of living and better quality of life. People increasingly want to buy products and work for organisations that respect people and the environment,” Mr Neilson says.

He cites cases in which Business Council members are making dramatic production gains while substantially cutting emissions and energy costs.

At the Bluff aluminium smelter industrial process investments and energy efficiency projects have seen production rise 25% and emissions cut by 40% since 1990 – the equivalent to keeping 40,000 tonnes of CO2 a year out of the atmosphere, or taking 120,000 cars off the road.

Saving and production gains are worth millions.

Mr Neilson says 70% of business people polled by the Business Council support creating a green public sector procurement policy. 71% say they will support moves by Government to make sustainable procurement mandatory for Government agencies.

He advised public servants: “Run with and benefit from this tide. Try holding it back at your peril. Public and business expectations for sustainable procurement are already well ahead of practice delivery by the public sector.

“Expect increasing intolerance of environmentally damaging and wasteful buying decisions in the public sector. Future scandals will see wasteful practices exposed. Why would you waste millions in public money buying inefficient light bulbs on day-one price? Why would you pay the same to stay with a hotel chain not engaging in sustainable heating, water conservation and lighting practices when you have the choice to go elsewhere and do the right thing?”

Mr Neilson also told public servants to expect sustainability performance measures and reviews to become part of their employment contracts, specially for CEOs.

“Carbon neutral behaviour will become the new benchmark and part of business as usual.”

There will also be a “sea change” in small to medium businesses sustainable practice when Government procurement contracts go green, with additional weightings in favour of sustainable suppliers, during the next year.

Peter Neilsons speech to the Towards a Sustainable Public Sector conference is at www.nzbcsd.org.nz, along with the latest polling on public and business views on how the country should respond to climate change.

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9. July 2007 by admin.

Five outsourcing trends to watch | CNET News.com

Experts are tracking consolidation, globalization, and emergence of small-scale services, virtual worlds and even “green sourcing.”
By Natasha Lomas
Special to CNET News.com
Published: July 6, 2007, 6:22 AM PDT

Five outsourcing trends to watch

Which way is the wind blowing in the outsourcing market? What’s looming on the horizon in the next five years?

Silicon.com has identified five areas to watch.

Consolidation

Globalization

Person-to-person offshoring

Green sourcing
Rising energy prices have put ecology issues firmly on CIOs’ radar. But could pressure to demonstrate green credentials influence businesses’ outsourcing decisions as well?

Silicon.com’s CIO Jury–a pool of chief information officers and other corporate IT professionals who are polled on various technology issues–recently revealed that environmental factors play a key role in the selection of technology suppliers and partners.

Virtual worlds

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5. July 2007 by admin.

Supply Management.com - for purchasing and supply management professionals
Peers into the future

How will procurement have changed by 2082? Rebecca Ellinor asks six experts

It’s impossible to predict what the world will be like 75 years from now. Will we all be holidaying on Mars or replaced by machines?

We spoke to futurologists and academics who analyse and observe trends to see what they predicted for the future and what it might hold for the purchasing profession. Here’s what they said.

DR HELEN WALKER
Deputy director of the Centre for Research in Strategic Purchasing and Supply (CRiSPS), University of Bath School of Management

“Purchasing and supply will still have a key role - as long as the world goes round, companies, consumers and governments will need to buy supplies. There will be a strong shift towards outputs rather than process, in other words: “Have we performed well through purchasing and supply?” rather than: “What is the best way to go about purchasing and supply?”.

“There will be some changes in how we view ‘value’, and sustainable procurement and ethical supply will be increasingly crucial.

“Countries such as China and India will be integrated into global supply chains. At the same time, there will be a return to sourcing locally to minimise pollution and support local communities.

“E-technology will have advanced to the point where there are fewer purchasers with a more strategic focus and broader capabilities.”

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4. July 2007 by admin.

Scottish Parliament to help SMEs win work  -  Responsible Purchasing Strategy

By Antony Barton
Guidelines published this week aim to make it easier for small businesses to bid for Scottish Parliament contracts.
In the draft Responsible Purchasing Strategy, which is open to a month-long public consultation, the parliament says it will address remaining barriers to SME participation, maximise sub-contracting opportunities for SMEs and measure, monitor and report on progress.

Among other measures, it will establish a public sector focus group to identify opportunities for collaboration, and review information available to SMEs and procurement processes to ensure they are not over-complicated.

A spokesman for the Federation of Small Businesses in Scotland said he was happy to see a strong emphasis on transparency and fairness and supported the focus on all aspects of professional development.

SMEs and local suppliers are one of the four areas covered by the strategy. The others are: professionalism; environmental impact; and ethical and social issues.

Anyone can submit feedback on the draft document, which is available to download from the link below.

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3. July 2007 by admin.

Kick starting green procurement
Web Posted - Mon Jul 02 2007
By Janelle Husbands

HAVING articulated the policy, it has been recommended that Government now set the trend in procuring things green. The recommendation came from Sydney Symmonds of Global Development Services as he spoke on the topic Kick Starting Green Procurement at a recently held seminar hosted by the Ministry of Energy and the Environment. His comments came as he revealed findings of a recently conducted survey, where several businesses were asked whether they would participated in a Eco-labelling programme or procure green goods, even though it would not increase their bottom line.

What was fascinating is that some 52 per cent of the businesses surveyed said yes they would. So we have a platform on which we can talk about Green procurement and the transforming of Barbados from its current procurement method, and current consumption method into a whole green method.

The concept of greening was well articulated by the Prime Minister in his budgetary statement but I believe that to make this into practice is going to consider considerable effort and change in the consumption patterns he said.

He said this will call for the emergence of a new lifestyle and encouraging the consumer to change his or her buying habits, which he noted, could be assisted by the retailers. Symmonds suggested that procurement is done on three levels, the public sector level, the private sector and the personal level of consumption.

If we are to transform Barbados over the next three to five years it is our recommendation that Government should set the trend in procuring things green. He noted that this could range from changing to Eco-friendly paint to the type of office furniture bought.

He noted that already countries have established their own Eco-marks such as the Nordic Swan and the Euro flower. Across the world there are many labels and many countries that have in fact, put Eco-labels on several products. Across the spectrum, more countries are moving to produce green items and to label them. So it is a question of education, knowledge and informing people.

If we are to kick start, we are going to have the Chamber off Commerce, the Small Business Association, the Manufacturers Association, the Barbados Hotel and Tourism Association, all of these have to incorporate into their policy and influence their members to move in the green direction.

He said that while the responses from the business community have been favourable, there was a lack of knowledge in some areas.

To this end, Symmonds suggested that longer-term incentives will be needed along with ongoing workshops and seminars to urge business owners to move away from traditional suppliers towards a gradual increase of green products in their inventory.

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3. July 2007 by admin.

Ethical Sourcing Forum Europe, Paris, 18th & 19th October

Mark your calendar.
This years Ethical Sourcing Forum Europe will be held at the Sofitel Hotel in Paris on 18th & 19th October.

No problem can withstand the assault of sustained thinking, a quote by the Parisian social reformer Voltaire is at the heart of the event. As well as appreciating “Paris in the Fall,” we plan a sustained attack.

The Forum will be opened by Kerstin Born, executive director of CSR Europe. The Ethical Sourcing Forum is a multi-stakeholder, accelerated learning and benchmarking platform, addressing the latest social and environmental challenges facing global supply chain professionals.

Confirmed speakers include The Walt Disney Company, GTZ, Microsoft, Maplecroft, Johnson & Johnson, International Labour Organization ILO, The Diamond Trading Company , LOreal, Marks & Spencer and Boots.

Topics include CSR and its future, compliance culture, business and academic partnerships, employee engagement, the challenges of communication, transparency, capacity building, collaboration and REACH.

As well as hearing about the latest developments, delegates can get involved. Collaborative communication is encouraged with sessions dedicated to speed networking, interactive business training and much more.

Early bird discounts saving €400 are available to those booking before 9th July online at www.intertek.com/esf/europe/register1

For the latest information on topics and speakers http://www.intertek.com/esf/events/europe/

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