Simple steps to green procurement

• Being inclusive and choosing a phased approach will win the day
• Building vendor capacity may be preferable to getting new vendors

Green procurement (GP) is one of the key strategies towards a sustainable consumption and production (SCP) regime. Most corporates want to go green in their procurement but hesitate to do so, as it is often believed that GP will cost more. Examples where GP has been competitive or beneficial in material terms are not many.

The definition of green itself is nebulous. Skeptics often call GP greenwashing. 

There are also concerns whether changes in procurement will work on account of quality, quantity and timeliness. Vendor capacity is a concern. 

Many countries have formulated GP policies, regulations and guidance for its promotion. Examples of leading GP countries include China, the European Union (EU), Korea, Japan, Taiwan and Thailand. In Asia, the GP movement is picking up, especially under support from the United Nations Environment Programme (UNEP) and EU-supported switch-Asia programme, and initiatives such as International Green Purchasing Network (IGPN). However, where there are no national policies on GP, there is not much impetus in the form of recognition or financial incentives nor guidance to corporations. Having a national framework on GP is therefore important to trigger and sustain GP. Without a policy framework, GP is often adopted due to pressures from the supply chain. 

Introducing and practising GP is, however, a long process and requires a strategic approach. Ad-hoc approaches can be risky, especially if the launch is ambitious. A rounded approach is needed, supported by top management and that includes building of vendor understanding and capacities, with deliberate efforts at influencing the market. 

Road map for introducing green procurement (GP) in the organisation

This 16-step guide can help you to introduce GP in your organisation.

1 Get management buy-in: GP efforts will enjoy a greater chance of success if the management is on your side.

2 Reflect the spirit of GP in company’s vision/mission and principles 

3 Find a leader: You need a leader who will take on the responsibility of introducing GP. 

4 Establish a multi-disciplinary and multi-departmental team: As GP encompasses environmental, social and economic dimensions, you need a team that brings together core understanding of these dimensions. You also need representatives of key departments such as accounts, finance, human resource, public relations and legal, apart from the procurement and environment divisions. 

5 Formulate your GP policy: You must develop your GP policy based on your company’s vision/mission statement that you would arrive at or fine-tune in step 2. This policy must be signed by your CEO.

6 Define what is green: The greenness of a product or a service is hard to define given the broad canvas of sustainability. The Green Purchasing Network of India (GPNI) under a project “Harmonisation of Criteria for Eco-labels” reviewed 143 eco-labels across the world and came up with eight common core criteria (see Table 1).

Table 1: Eight core criteria of a green product and their relevance to GP

7 Assess your current purchases: You need to establish a baseline/benchmark of the existing situation before you start. Compile procurement statistics (items, quantities, quality/standards, timing, vendor details, client feedback, past experience etc.)

8 Start small: Do not be too ambitious. Scope and prioritise for a phased approach on products/components to be greened.

9 Consider product focus: You may like to commence GP by focusing on recycled-content products. These may include buying recycled paper and envelopes, packaging, plastic lumber, traffic cones, re-refined motor oil, antifreeze and toner cartridges. Or it could be to focus first on energy-efficient products.

Such products could be Energy Star-labelled and help cut costs through reduced power consumption and greenhouse gas emissions. Here, GP helps save money. Other possibilities include focusing on green cleaning products to improve health and safety.

10 Strategise procurement: Once product focus and phasing is decided, look at strategies that align with the company’s procurement guidelines or corporate procurement systems or the national procurement framework. Broadly, you may look at mainstreaming or a special approach. In mainstreaming, you infuse elements of resource-efficiency, exclusions, biodegradability and recyclability in product specifications. In a special approach, you may introduce green tenders as a category. Such tenders become, in a way, “pilots” to understand and learn about “greening”. Green tenders help build a targeted vendor database around certain priority products and services, build internal processes and staff capacities and send signals to the market. In practice, a hybrid solution is recommended.

11 Involve stakeholders: It is important that stakeholders are consulted in deciding on implementation strategies. They could involve internal team members of various departments, existing vendors, buyers, environmental NGOs, green specialists, eco-label representatives and certifiers and regulators. The involvement could be sought through discussions and bi-lateral consultations. 

12 Choose right vendors: You may have to get new vendors or build the capacity of existing vendors. You may like to restate at this stage your vendor selection criteria such as a track record of environmental and social compliance and commitment to environmental management (eg, EMS ISO 14001 certification).

13 Build vendor capacity:  Building existing vendor capacity to respond to your green requirements is critical. This is preferred to working with a new set of vendors. Building capacity could involve vendor audits, technical assistance (training, piloting and knowledge dissemination) and visits.

14 Track progress to learn, assess the benefits of greening and make a business case: You must allocate time and effort to measure and track changes. This will keep you on track in project implementation and help you identify possible issues. It will also be a basis to assess cost savings, and health and environmental benefits of greening on a life cycle basis. The status must be put up for management review.

15 Reward supporters and celebrate success: Once the greening phase is complete, be generous in sharing the results and the credit for its success. Recognise and reward the team, your supporters, even if their contribution was small. Such recognition, whether done through a personal thank-you letter, company award or “brownie” points to the employee in promotions, will build support for future greening efforts.

16 Record and move on: Record your story in various forms, through newsletters that all easily understand, through technical report that will have metrics that technical staff will appreciate and one or two pages for management about the triple bottom line effect of GP. Move on with the next phase of GP, armed with lessons of the first phase. 

These steps may need to be adapted to your organisational context and needs. As a generic approach, however, they will help you to lay down a robust and comprehensive process. I see, in the next few years, GP as an integral element of the business strategy and operations.