Purchasing For People And The Planet

Purchasing for People and the Planet Lisa Mastny

State of the World 2004

Purchasing for People and the Planet Overview: 1. Greening Institutional Procurement 2. Pioneers in Green Purchasing 3. Pressures and Drivers 4. Overcoming Obstacles 5. Identifying Green Products 6. Spreading the Movement

Purchasing for People and the Planet • Nearly every purchase an organization makes has hidden costs for the environment and for the world’s people • Many products - require huge inputs of water, wood, energy, metals, and other resources that are not always renewable - contain toxic chemicals that endanger our health

Greening Institutional Procurement • When purchasing is highly centralized, as in large institutions, a single decision made by one or a handful of buyers can influence the products used by hundreds or even thousands of individuals • The buying activities of institutional purchasers have far greater consequences for the planet than the daily choices of most household consumers

Greening Institutional Procurement By incorporating environmental concerns into all stages of their procurements, institutions can use their significant purchasing power to be powerful agents for environmental change

Greening Institutional Procurement • Governments spend billions of dollars on purchases of everything from office supplies to vehicles Government Spending as Share of GDP in Selected Countries, 1998 25%

Denmark Denmark Canada Canada Germany Germany Italy Italy Switzerland Switzerland United States United States Netherlands Netherlands

20% 19% 17% 15% 14% 13% 10%

Japan Japan 0 Source: OECD

5

10

15

Percent

20

25

30

Greening Institutional Procurement • Other large institutions also have significant purchasing power – corporations – universities – religious institutions – international institutions such as the United Nations and World Bank • They all require vast amounts of goods and services to run their operations

Greening Institutional Procurement Rising institutional demand can play a key role in building larger markets for greener goods and services, making environmentally preferable purchases more affordable for everyone

Greening Institutional Procurement • Institutions can make use of their systematic approach to purchasing • In addition to requirements for quantity, price, function, or safety in purchasing contracts with suppliers, institutional buyers can also establish environmental criteria – – – –

recycled content energy efficiency less packaging use of sustainably managed resources

Pioneers in Green Purchasing • Several advantages to green purchasing at the corporate level – improved profitability from increased water and energy efficiency, waste reduction – healthier and safer work environments (fewer toxic chemicals from cleaning agents, paints, pesticides, etc.) – better public image

Examples of Green Purchasing in Selected Companies Starbucks

- since 2001, has given supplier preference to coffee farmers who meet certain environmental and social standards; in 2002, 28% of paper fiber used was post-consumer and 49% contained unbleached fiber

Federal Express - in 2004, introduced hybrid electric vehicles into its delivery fleet; the FedEx OptiFleet E700 will decrease particulate emissions by 96% and reduce smog-causing emissions by 65%

Examples of Green Purchasing in Selected Companies Canon - gives priority in its global purchasing to nearly 4,600 company-approved green office supplies

IKEA - gives preference to wood from forests that are either certified as being sustainably managed or in transition to these standards

Pioneers in Green Purchasing • Several countries have strict national laws or policies requiring government agencies to buy green -

Austria Canada Denmark Germany Japan United Kingdom United States

Pioneers in Green Purchasing Government green purchasing can be particularly effective in pushing markets where public buying accounts for a significant share of overall demand (e.g., computer equipment)

Pioneers in Green Purchasing • U.S. government is the world’s single largest computer purchaser (1 million machines annually) • In 1993, federal agencies were required to buy only computer equipment that met efficiency requirements of Energy Star program • Today, largely due to this increased demand, Energy Star standards are now met by - 95% of all monitors - 80% of all computers - 99% of printers sold in North America

Pressures and Drivers: Governments Governments can exert pressure to promote green purchasing with • rebates, tax breaks, and other economic incentives to encourage consumers to buy green • laws and regulations (for energy efficiency, recyclability, waste disposal, etc.) to influence the way manufacturers design and make their products

Pressures and Drivers: Individual Consumers • Many consumers chose to buy green at the household level • About 63 million U.S. adults (30% of households in the country) do some form of environmentally or socially conscious buying • Concerned individuals are participating in boycotts and other direct actions to pressure companies into shifting their buying practices – many feel this is a more effective tool for change than lobbying for regulatory action, which could take years

Pressures and Drivers: Individual Consumers • In the mid-1990s, Rainforest Action Network launched a campaign to pressure Home Depot, the world’s largest home improvement retailer, to change its buying practices • In 1999, the company announced they would phase out endangered wood products and favor products certified as coming from sustainably managed forests • Ripple effect: these policy shifts have raised the overall standard for the timber industry

Overcoming Obstacles • Green purchasing initiatives must overcome several barriers – complex legal framework surrounding procurement – weak enforcement – political challenges – finding affordable product alternatives – convincing employees to recognize the benefits of adopting more environmentally sound practices

Overcoming Obstacles • Tools to help green purchasing: – establishing an explicit written policy or law – setting strict targets – implementing a system of accountability – monitoring and recording activity

Identifying Green Products • An additional challenge lies in identifying green products • To make sound decisions, there is a need to evaluate the environmental performance of products • Several tools are being developed to help both manufacturers and consumers

Identifying Green Products Life Cycle Assessment - methodology for identifying and quantifying the inputs, outputs, and potential environmental impacts of a given product or service throughout its lifecycle (from raw materials to disposal)

Ecolabels - seals of approval used to indicate that a product has met specified criteria for environmental soundness during one or more stages of its lifecycle

Spreading the Movement • A number of organizations and networks are spreading the movement by – publishing information on green purchasing – collecting success stories – publicizing trends – partnering directly with industry leaders and government officials – rallying the grassroots to boycott or otherwise pressure manufacturers – promoting public debate and generating media interest

Spreading the Movement International Council for Local Environmental Initiatives - members of the European group’s Buy-It-Green network exchange information and experiences, join forces, and make joint green purchases

www.iclei.org

U.S. EPA

www.epa.gov

- Environmentally Preferable Purchasing program offers support an information in such areas as construction, office products, cleaning products, cafeteria procurement, and electronics

Spreading the Movement Center for a New American Dream - helps institutions incorporate environmental considerations into their purchasing decisions www.newdream.org

Japan’s Green Purchasing Network - holds countrywide seminars and exhibitions on green purchasing, and publishes purchasing guidelines and environmental data books, www.gpn.jp

Spreading the Movement International Hotels Environment Initiative - sponsors a web-based tool to help hotels improve their environmental performance www.ihei.org

Talloires Plan - 10-point action plan that encourages universities to establish policies and practices of resource conservation, recycling, waste reduction, etc.

Spreading the Movement • Must also boost green purchases in the developing world • By doing so, international organizations stimulate local green markets, and clean up their own acts in the face of mounting criticism about the environmental impacts of their activities

Spreading the Movement • Green purchasing is not the only way to minimize the problems associated with excessive consumption • Institutions will also need to find ways to meet their needs without buying new products, such as

- eliminating unnecessary purchases - extending the lives of existing products - diverting used goods from being sent to landfills

Spreading the Movement • Green purchasing is an important step to achieving a more sustainable world • As individuals, we need to pressure the organizations we work for, and rely on, to join us in building such a world

About the Author

Lisa Mastny is a Senior Editor at the Worldwatch Institute

More information on

State of the World 2004 at www.worldwatch.org