14. September 2007 by admin.

SDCExec.com - Article - Greening your Supply Chain
Greening your Supply Chain
10 things you can do today to prepare for business in a new environment

By Kris Colby and David Fertal

The green sourcing wave has begun to roll. An increasing number of companies are beginning to catch on and ride this wave in an effort to proactively manage a new era of customer needs, regulations and competitive realities that will ultimately impact their business.

Far from a fad or feel-good initiative, green sourcing is fast emerging as a strategic business imperative. Companies that want to get ahead of the curve and stay there need to begin thinking green now and develop an approach to sourcing and supply chain management that factors this new reality into their plans. It sounds daunting, but with a few simple steps procurement organizations can jumpstart their efforts and get on the path to success:

1. Know where you stand: Understanding your organization’s spend, supply chain and consumption patterns is naturally the first step because you can’t affect what you can’t see. Whether this is a detailed carbon footprint study or an assessment of your organization’s “green” status, you need to know how your supply chain is positioned for the changes on the horizon.

2. Have a plan: Once you understand where you stand, create a set of goals and, even more important, metrics that can be used to track progress.

3. Have a single point of accountability: Many organizations have appointed “chief sustainability officers” to oversee their green efforts. The applicability of this specific position will depend on your organization and industry, but the key is to have a single point of accountability empowered to effect change.

4. Market your progress internally and externally: Half the battle is getting the word out and getting people on board. Be sure to communicate to all levels why green efforts are being undertaken (Goals), what will be measured (Metrics) and how the company is going to get there (Plan).

5. Incorporate “green” into your existing sourcing and procurement processes: Sourcing and procurement have always been about more than just price. Factoring green priorities into your existing processes is a natural extension of the non-price process and an effective way to drive green goals. Be sure to include green criteria in your requests for proposals (RFPs) and create clear metrics for measuring them as part of supplier performance management.

6. Communicate your goals and standards to your supplier community: By setting clear expectations of your supply base during the sourcing process and proactively monitoring compliance/progress, you can quickly improve your sustainability performance. Outline what suppliers will be expected to provide and how they will be measured to ensure that they are delivering and putting in place the processes and procedures to drive compliance.

7. Stay up-to-date with global regulations: Environmental regulations such as the Restriction of Hazardous Substances (RoHS) directive in the European Union will increasingly affect how your supply chain functions regardless of your location. You need a method for keeping up with changes in this rapidly evolving area to avoid costly mistakes in your supply chain.

8. Keep up with new materials, technologies and processes: Significant work is being done to develop new approaches that can cost-effectively address the challenges and opportunities that green initiatives present. Stay up-to-date in your industry, participate in industry groups and do whatever it takes to maintain your competitive advantage and not be left behind.

9. Do the “easy stuff” first: You don’t need to overhaul your supply chain to see gains from sustainability efforts. Instead, identify “quick wins” such as simple improvements in energy efficiency that can both deliver bottom-line results and kick-start your green initiative.

10. Get everyone involved: As with any broad initiative, it is nearly impossible for just one functional area to have an impact on the entire organization through its efforts alone. To be effective, you need Engineering, Design, Sales, Finance, Operations and everyone else involved.

By acting on these 10 steps now, you can ensure that your organization will be well-positioned to limit risks and profit from the opportunities that green initiatives hold.

About the Authors: Kris Colby is a senior manager and David Fertal an engineering project manager in the Spend Management Services group at Ariba, Inc. www.ariba.com.

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14. September 2007 by admin.

Scoop: Making the public service more sustainable

NZ, Aust join to make public service more sustainable

The New Zealand and Australian governments today established the first trans-Tasman joint framework for sustainable government procurement to ensure that public sector organisations in both countries consider the environmental credentials of goods and services they buy.

Commerce Minister Lianne Dalziel, as minister in charge of the New Zealand government’s procurement policy, met with her Australian counterparts in Melbourne today to launch the Australian and New Zealand Government Framework for Sustainable Procurement.

The move to work with the Australians on sustainable procurement follows the New Zealand government’s recent announcement on its own mandated environmental standards, guidelines and targets for the public service.

“New Zealand welcomes the opportunity to collaborate with the Australian state, territorial and federal governments through the Australian Procurement and Construction Council on this important issue. The threat of climate change has clearly demonstrated that the world must use its resources carefully. Governments in both countries are taking the lead to ensure that the purchase of goods and services by government are more sustainable,” Lianne Dalziel said.

The Framework provides a set of guiding principles and best practice examples for public sector organisations. It will encourage the sharing of experience between governments in both countries and ensure economic, environmental and social considerations are taken into account.

“The sustainability imperative means that we must emphasise the economic, environmental and social impacts of goods and services over their entire lifecycle as part of the value-for-money assessment. In addition, we drive the production of environmentally-friendly and sustainable goods and services. Sustainable procurement and innovation go hand in hand,” Lianne Dalziel said.

Participation in the joint Australia New Zealand Framework is part of New Zealand’s Sustainable Government Procurement Project, one of six government initiatives that will help lead New Zealand towards greater economic, environmental and social sustainability in its resource use and way of life.

To view the Framework, or for more information on sustainable procurement, please visit www.procurement.govt.nz.

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13. September 2007 by admin.

ARNnet - From the Top: Toshiba’s Mark Whittard - Mobile trends and green computing
Green computing is becoming a major industry concern. What is Toshiba doing to improve its carbon footprint?

MW: A lot of the government-based reports have been rightly focused on the trade-in and deployment end of the cycle. What they’re becoming more aware of, and where our focus is, is the entire lifecycle and there are five elements here. The first thing is component procurement and where materials for those come from. Toshiba is one of the few vendors that publishes strict green procurement guidelines. Additionally, we were the first to launch a fully Restriction of Hazardous Substances [RoHS] compliant computer in 2004.

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4. September 2007 by admin.

Green Procurement in Asia | Establish
Green Procurement in Asia
Supply Chain Management with Environmental Criteria
Environmentally responsible or ‘green’ procurement is the selection of products and services that minimize environmental impacts. It requires a company or organization to carry out an assessment of the environmental consequences of a product at all the various stages of its lifecycle. This means considering the costs of securing raw materials, and manufacturing, transporting, storing, handling, using and disposing of the product. (bsdglobal.com)

Companies sourcing in Asia are increasing their green procurement efforts. Green procurement activities can include:

* Focus on the environmental compliance status and practices of supplier operations.
* Joint development of new materials, processes or other solutions to environmental issues.

The methods companies use to work with their suppliers can include:

* Requiring suppliers to implement, and possibly certify, environmental management systems.
* Educating suppliers about materials use, pollution prevention, design for disassembly or other issues and tools of interest to the customer company.
* Enlisting suppliers’ help in developing new materials, parts or processes to address environmental concerns.
* Auditing suppliers’ compliance status. (Source: Green Business Network 2001)

Below are two examples of companies implementing green sourcing practices in Asia.

Fujitsu’s Green Life 21 – Making Everything Green Concept

Fujitsu’s “Green Life 21 – Making Everything Green” is the key theme for their environmental efforts in every business area, including procurement of parts and materials. “In December 2003, Fujitsu established a center known as the EMC (Ecology Management Center) in Taiwan and Hong Kong (China) specializing in RoHS compliance and using the Fujitsu Green Procurement Direction as a reference. The main role of the EMC is to ensure that suppliers’ operations promote environmental protection and procured parts are free from harmful substances and chemicals stipulated in the Fujitsu Green Procurement Direction.” (Source:http://www.fujitsu.com/)

Konica Minolta Business Technologies Implementing Green Partner Program Covering RoHS Requirements

Konica Minolta Business Technologies selects suppliers on the basis of quality, cost and delivery time, plus environment standards. Paying particular attention to the environmental aspect of procurement activities, in fiscal 2006 the company decided to launch a Green Partner program, which honors suppliers promoting Green Procurement in conformance with RoHS and other environmental regulations. They have developed a survey format, manuals and reference materials in Chinese for their Chinese suppliers and successfully initiated full-scale operations in April 2005. Operation of a verification system began in July 2005. (Source: http://konicaminolta.com/)

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4. September 2007 by admin.

Scoop: Eco-systems die while Government Fiddles.
Eco-systems die while Government Fiddles.

Press Release: Green Party
Ancient eco-systems of Pacific and SE Asia die while Govt. fiddles

New government rules aimed at helping to slow widespread devastation of ancient “paradise forests” in South East Asia and the Pacific only go part way, says Greens Co-Leader Russel Norman.

He says the Green Party welcomes the Government’s new “sustainable procurement guidelines” just released but is disappointed they will still allow government departments to purchase tropical timber products from a source that the procurement policy itself defines as unsustainable.

“The new sustainable procurement policy is welcome and makes progress in many areas,” Dr Norman says.

“However, it is absurd that the government guide to sustainable procurement endorses the Malaysian Timber Certification Council MTCC scheme as meeting all the `legal sourcing and sustainably managed requirements p.12 when the table on the very next page reveals that the MTCC scheme certifies timber that is not sustainable and only legal under certain conditions. See the pdf of the document here.

“The Government’s own report says MTCC certified timber is not sustainable and not always legal, so why does MTCC certified timber get the tick of approval for sustainable procurement?”

Dr Norman says it is important to get these government guidelines right because they may be used as a guideline for all New Zealanders trying to avoid purchases of tropical timbers such as kwila. New Zealands trade in kwila often entails human rights abuses and destruction of rare eco-systems and unique wildlife in West Papua and Papua New Guinea, where Malaysian loggers are prominent.

“The Norwegian Government banned the use of all tropical timber in their sustainable procurement policy released just two months ago because of the difficulties in ascertaining whether any tropical timber is legal and sustainable. Yet here is the New Zealand Government not only allowing the use of questionable tropical timber but actually endorsing one of the guaranteed unsustainable sources of tropical timber, MTCC certified timber.

“Malaysian logging companies have a long record of illegal and unsustainable clearing of rainforests throughout Asia and the Pacific. Many reports, including from the World Bank, have linked the Malaysian logging company Rimbunan Hijau to illegal and unsustainable logging and the human rights abuses of those indigenous people who dared to stand up against Rimbunan, including in PNG and West Papua where most of our kwila is thought to come from.

“For the New Zealand Government to endorse the sustainability of the Malaysian logging is an affront to all those people who have fought Malaysia’s rapacious loggers. The sustainable procurement policy should ban the use of all tropical timber in government projects until we have some idea that the timber is genuinely sustainable and legal, just as the Norwegian Government has done.”

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30. August 2007 by admin.

Starbucks Agrees to Hold the Hormones For Good — Food & Water Watch
In a letter addressed to Food & Water Watch Executive Director Wenonah Hauter, Starbucks Vice President of Sustainable Procurement Sue Mecklenburg stated, “…We have committed that by December 31, 2007, all of our fluid milk, half and half, whipping cream and eggnog used in U.S. company-operated stores will be produced without the use of rBGH.”

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30. August 2007 by admin.

Dell announces another EPEAT gold-rated PC
August 29, 2007

EPEAT is a US green success story. Here in the UK we have a government doing SFA in this area.

EPEAT, the US PC and notebook environmental ratings agency has quietly and steadily gone about setting up an effective three-tier green rating with support from manufacturers and, crucially, a mandate from the US government that all federal PC and notebook purchases must be of EPEAT-rated kit.

Dell has just announced a gold-rated desktop PC and suppliers like Lenovo and HP are actively getting products rated and product designs amended so as to deliver EPEAT ratings success. With US federal purchases leading the way corporate purchasers should follow suit as it’s an easy green ‘marketing win’ for them. It all leads to lower carbon emissions from PC use, less hazardous waste and better recycling.

Meanwhile the UK governments sits on its PC/notebook procurement bottom and does nothing. Is this the NIH (not invented here) phenomenon at work? Why isn’t the UK government mandating green PC purchases? All it needs do is to say that from a date in the future only EPEAT-rated PCs and notebooks will be bought by central and local UK government purchasing authorities.

Such purchasing is under the aegis of the Office of Government Commerce. A mildly green statement on its website says: “OGC is fully engaged with the work of the Sustainable Procurement Task Force as it develops the national action plan.”

A national action plan sounds impressive. The SPTA web site states (in August 2007) that: “The National Action Plan summarises the views and position of the members of the Sustainable Procurement Task Force. It gives recommendations on how the UK Government can succesfully meet its target of being recognised as amongst the leaders in sustainable procurement across EU Member States by 2009. The UK Government will review the National Action Plan and respond in full in Autumn 2006.”

Oops; Autumn 2006. Did we hear anything? Has the site been updated? No and no, not since July 2006. The national action plan’s first recommendation is: “for government to Lead by example.” Cue derisive laughter offstage.

The OGC is an office of the Treasury and has an executive buying agency, OGCbuying.solutions, to do the buying. It has a new chief executive coming in October.

Basically the UK government is following the SFA policy. There is a national action plan talking shop, the conspicuous failure to lead by example, the Treasury holding the purse strings and a chief executive hiatus in the buying agency. All in all, a recipe for nothing happening.

What does the acronym SFA mean? Why, sweet Fanny Adams of course.

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30. August 2007 by admin.

My apologies on the site being down. We were experiencing technical issues, but should be fully functional now. Regular postings will begin shortly.

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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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