Sustainable procurement – environmental sustainbility, Barbies and carbon reduction

We talked last week about the drivers for sustainable procurement, and concluded that it has to be hard-headed business reasons, (in the private sector) and it has to be done with the consent and direction of the “owners “of the organisation. So this week let’s get into the three specific subsets of sustainability, starting with environmental.

And on the big issue, I must confess that I’m a ‘don’t know’ on global warming. Is the earth actually getting hotter? Probably, although we’ve seen conflicting evidence. Is that mankind’s fault? Quite possibly, at least in part, but ... it has happened before when we weren’t around.

Would it be sensible to stop burning so much carbon and depleting finite reserves of raw materials? That’s the point at which, whatever you think about global warming, you can put your procurement strategist hat on and say without hesitation “yes”  - that would seem to be a very good idea!

It’s also easy to be cynical about some of the targets and measures.  (Measurement again a problem – we’ve seen that before). It’s easier for the UK to hit carbon reduction targets because our industry is increasingly moving offshore, much of it to countries that aren’t perhaps quite as sensitive to those issues.  So we look good under those measures, but we lose jobs in the UK, and more carbon is burnt in the countries that see a subsequent increase in manufacturing.

But through all of that, these must be a few sensible basics.  Whether or not you badge them as sustainability, procurement actions and decisions that reduce whole life costs, in areas such as energy usage and disposal costs, must make sense. Similarly, if it is regulatory requirement, then of course it needs to happen. But it’s still interesting how often whole life costs aren’t considered, with negative environmental issues. Are you taking into account the running cost of any electrical equipment you buy? Disposal costs for equipment or consumables?

Another aspect of the picture is how our suppliers manage their environmental issues. Jason Busch wrote a very good post the other day (here), focused on cost as well as sustainability issues, which talked about how little most of us know about our supply chain beyond the first tier.  So if we take a lot of care over carbon reduction strategies for our own business, but buy from first (and indirectly second, third..etc ) tier suppliers who are huge carbon users or polluters, then our own actions, while still worthwhile, are less meaningful. That should be a driver to improve our supplier information and risk management processes i ngeneral, something we'll come back to later in this series.

As well as the energy and carbon issues, we have other environmental issues to consider such as sustainable timber and forest products. The Mattel case last week was a good example of how this can have an impact (well, not good from their point of view).  A Greenpeace study found that packaging for Barbie dolls came from non-sustainable timber sources in Indonesia, where the rainforest is being destroyed at an appalling rate.

As we said in our previous posts, we would argue that you need to take sustainable procurement actions based on what will benefit your organisation. It seems to us that not destroying the rain forests for the sake of slightly cheaper paper or board MUST be a sensible thing for any firm; you would like to think that a few parents would think twice about buying Barbie if they have the image of ravaged rainforests in their heads.  And I’m surprised to be honest that Mattel procurement people didn’t spot this one coming; it would be good to hear their perspective.

Things are a littel different in the public sector, where your pressures come from your political masters or governance organisations.  But that leaves a lot of scope for procurement to take the initiative, and if the end result is genuine whole life cost reduction for you – or through your supply chain – that must be good.

If you’re in a consumer facing business, think about it from both a risk and opportunity perspective – can your actions be turned into a marketing opportunity?  In terms of risk, what within your supply chain could be a vulnerability in terms of customer perception?

These questions apply also in the next area we’ll look at – social sustainability – which personally I find perhaps the most interesting aspect of this whole topic.

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