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 worlds 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
Denmark Denmark Canada Canada Germany Germany Italy Italy Switzerland Switzerland United States United States Netherlands Netherlands 25% 20% 19% 17% 15% 14% 13% 10%
0
Source: OECD

Japan Japan
5 10

15

20

25

30

Percent

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 worlds 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 worlds 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 groups Buy-It-Green network exchange information and experiences, join forces, and make joint green purchases

www.iclei.org

U.S. EPA

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

www.epa.gov

Spreading the Movement

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

Japans 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