SC 411E

Green Purchasing
Session 2
Definitions and Practical
Aspects of Green Purchasing
Presented by: Dr. Tom McNAMARA

tom.mcnamara@rennes-sb.com
WHAT IS GREEN PURCHASING?

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Green Purchasing …

is … “a process whereby companies seek to procure goods,

services and works with a reduced environmental
impact throughout their life cycle when compared to
goods, services and works with the same primary
function that would otherwise be procured”

Green Purchasing can affect environmental impact:

 Directly – through improved environmental
performance of goods, services and works bought
 Indirectly – through using this market leverage to
encourage companies to invest in cleaner products and
services
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Green Purchasing (Sustainable Procurement)…

… means making sure that the products and

services your organisation buys achieve value for
money on a life cycle cost basis and generate
benefits not only for your organisation, but also
for the environment, society and the economy.
Sustainable procurement is used by both public
and private sector organisations to ensure that
their purchasing reflects broader goals linked to
resource efficiency, climate change, social
responsibility and economic resilience

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Green Purchasing (Sustainable Procurement)…

… is the process of making purchasing decisions

that meet an organization’s needs for goods and
services in a way that benefits not only the
organization but society as a whole, while
minimizing its impact on the environment. This is
achieved by ensuring that the working conditions
of its suppliers’ employees are decent, the
products or services purchased are sustainable,
where possible, and that socio-economic issues,
such as inequality and poverty, are addressed.

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 Green Purchasing (Sustainable Procurement)…
… is the adoption and integration of 
Corporate Social Responsibility (CSR) principles into your
procurement processes and decisions while also ensuring, they
meet the requirements  of your company and its stakeholders.

It integrates requirements, specifications and criteria that are

compatible with the protection of the environment and the
society. It is not simply about not using child labor or illegal
chemicals that can damage the environment and peoples’ health.

Commitment in sustainable procurement ensures values

which are core to the business are integrated through a
company’s supply chain into the life cycle of the company’s
products and services. 6
SO WHAT IS GREEN PURCHASING? (SUSTAINABLE PURCHASING)
(SUSTAINABLE PROCUREMENT)

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LET’S WATCH A VIDEO

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From the video …
- Sustainable Purchasing: A
holistic approach to sensible
purchasing
- It considers quality & price
- As well as social,
environmental & economic
impacts, and governance
requirements (the quadruple
bottom line)
- Every purchasing decision has
an impact
- Need to find « balance » when
making decisions
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- Need to critically analyze evey
aspects of purchasing decisions
in terms of quadruple bottom
line
- Take into account your Supply
Chain
- Look at the full Life Cycle Cost
(LCC)
- Small decisions can have a big
impact
- Standards are available
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Why is Green Purchasing Important?

Every product we buy has a huge range of

environmental impacts, across the product life-cycle

• Consumption of raw materials

Supply chain • Energy/water use, emissions and (toxic) waste
from industrial processing and transportation

• Energy/water consumption
Usage • Generation of waste and emissions
• Use of consumables (e.g. paper, ink)

• Generation of waste
Disposal • Toxic emissions
• Potential new raw material

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Impacts: Climate change/CO2 emissions
Impacts of our purchases:
Electricity used to power our buildings and
equipment
Fuel consumed by our vehicles or to heat our
buildings
Emissions from industrial processes and
transportation throughout supply chains

How can Green Purchasing help?

Require high energy efficiency standards for
buildings and products
Purchase green electricity
Shift to zero emission vehicles (and
encourage suppliers to do the same)

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Impacts: Air and water quality
Impacts of our purchases:
Pollution from vehicles owned by companies,
running our services or delivering our products
Use of chemical products (e.g. for cleaning)
containing toxic substances
Use of chemical based pesticides and fertiliser in
food production

How can Green Purchasing help?

Shift to zero emission vehicles (and
encourage suppliers to do the same)
Require cleaning services to be carried out
with ecolabel compliant products
Specifying organic in food and catering
contracts
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Impacts: Waste and resource use
Impacts of our purchases:
Disposal of electrical products at end of
life
Waste materials from construction and
demolition work
Packaging used in delivery of goods

How can Green Purchasing help?

Promote circular economy solutions
Require extended product lifetimes, and
guarantee of spare parts
Demand reduced or reusable packaging
Encourage the use of recycled materials in
construction
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Green Purchasing makes good business sense!
Studies show the following is possible:
• Revenue increase of 5% to 20%
• Cost reductions of 9% to 16%
• Increase in brand value between 15% to 30%

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Green Purchasing Considers

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 Principles of Green Purchasing
• Principle 1 – Consider whether a product is needed
before purchasing it or not.

• Principle 2 – Purchase a product considering the various

environmental impacts over its life cycle - from extraction
of raw materials to disposal.

• Principle 3 – Select suppliers who make a conscious

efforts to care for the environment.

• Principle 4 – Collect environmental information on products and

suppliers.
Established by Green Purchasing Network(GPN)

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 Key Concept of Green Purchasing
• Life Cycle Costing (LCC): This refers to the process of estimating
the ‘cradle-to-grave’ cost of procuring a good or service. LLC (or
Whole of Life Cost)is the cost to the organisation of acquiring the
product. It considers:
a. the initial purchase price of the goods and services
b. maintenance and operational costs
c. transition costs
d. licensing costs (where applicable)
e. the cost of additional features procured after the initial
procurement
f. consumable costs
g. disposal costs
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Key Concept of Green Purchasing

Life Cycle
Costing

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 Key Concept of Green Purchasing
The Circular Economy - European Commission Definition: “The value of products and
materials is maintained for as long possible. Waste and resource use are minimised,
and when a product reaches the end of its life it is used again to create further value.
This can bring major economic benefits, contributing to innovate, growth and job
creation.”

This includes:
• Moving from a linear approach to production and consumption towards
a circular approach where value is retained by closing product and
material loops.
• The smaller the loop the greater the environmental and economic benefit.
• Principles behind this high-level material use:
- retains value and embodied carbon longer (the smaller the loops the greater the
value retention) by closing material loops;
- the use of renewable energy; and
- the use of clean materials.
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 Benefits of Green Purchasing
• achieving value for money and a more efficient use of
resources
• generating financial savings through reduced waste disposal
(including reduced packaging to waste); reduced water use;
and reusing materials and products, thereby lowering the cost
of a product over its life cycle
• achieving positive publicity associated with the purchase and
use of products, services and suppliers with good
environmental and social responsibility records
• providing leadership to the community in demonstrating
social and environmental responsibility through the purchase
of sustainable products and services.
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DON’T WORRY. THERE IS HELP.

LABELS, STANDARDS AND REGULATIONS

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Relevant sources of law
• Treaty on the Functioning of the EU (TFEU)
• EU Procurement Directives: 2014/23/EU,
2014/24/EU and 2014/25/EU
• EU Remedies Directives 89/665/EEC and
92/13/EEC as amended by 2007/66/EC and
2014/23/EU
• EU sectoral legislation e.g. Clean Vehicles
Directive, Energy Efficiency Directive
• National implementing legislation
• Case law of Court of Justice of EU + national
courts
• WTO Government Procurement Agreement

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Ecolabels
Ecolabels are generally a good way to ascertain the
environmental claims and credentials of goods and
services. They can also be a useful tool to distinguish
between the environmental credentials of suppliers.

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MORE PRECISELY, THERE ARE ISO* STANDARDS

*INTERNATIONAL ORGANIZATION FOR STANDARDIZATION

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ISO 14001: Environmental management systems
ISO 14001 sets out the criteria for an environmental management
system that can be certified. It maps out a framework that a company or
organization can follow to set up an effective environmental
management system. It can:

Demonstrate compliance

Increase leadership involvement

Improve company reputation

Achieve strategic business aims

Provide a competitive and financial advantage

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 ISO 20400: Sustainable procurement
ISO 20400 provides guidelines for integrating sustainability into an
organization’s procurement processes. It can help organizations:

• Contribute positively to society and the economy by making sustainable

purchasing decisions and encouraging suppliers and other stakeholders to
do the same.
• Reduce their impact on the environment, tackle human rights issues and
manage supplier relations, while harmonizing long-term global costs and
improving purchasing performance, providing a competitive edge.
• Improve communication between contractors and all stakeholders and
promote mutually beneficial relationships.
• Harmonize the purchasing function by improving relationships with suppliers
and reducing risks in the supply chain, such as disruptions due to product
recall or supplier failure.
• Boost productivity, optimizing cost and stimulating innovation in the market.

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 Slide 13.30

ISO 20400

SUSTAINABLE PROCUREMENT

Procurement is a powerful instrument for

organisations wishing to behave in a responsible
way and contribute to sustainable development
and to the achievements of the United Nations
Sustainable Development Goals ……………..
LETS FIND OUT MORE ABOUT HOW ISO
20400 WORKS

HERE IS A SHORT VIDEO

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 Green Purchasing / Sustainable Procurement

Implementing a Green / Sustainable purchasing

programme can appear intimidating

Don’t worry. We will look at some basic implementation

concepts in the next session

However, there are some simple things that a purchasing

manager can do to go ‘Green’, with immediate benefits
to be had
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 Some ‘quick wins’ in sustainable procurement
• Purchase paper with 100 per cent recycled content
• Purchase supplies, furniture and fittings that include
recycled content and that can be recycled at the end of
their life
• Avoid purchasing goods made from single use plastics
• Check that cleaning contracts align with waste reduction
goals
• Introduce low waste or waste free meetings and events:
– Reuse plastic name tags from previous events (ask attendees
to return them after the event)
– Arrange for food collection services (such as Ozharvest) for
excess catering
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Best practice: what buyers can do to improve
labour conditions
• Avoid putting undue pressure on suppliers that might
impact workers, e.g. changing an order at the last minute
or shortening lead times could mean that workers are
forced to do overtime.
• Insist that suppliers comply with the Ethical Trading
Initiative (ETI) base code - a code of labour practice
• Give reasonable time scales for suppliers to address areas
of non-compliance and provide support to help them
improve (education and training).
• Help your major suppliers to share good practice. Develop
benchmarking groups to exchange ideas about how to
overcome specific issues in their region or industry.
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 Sustainability challenges for
procurement
◙ Sympathetic specifications

◙ Keeping abreast of laws, regulations and guidance

◙ Understanding sustainability issues and risk

◙ Effective working with stakeholders

◙ Implement life cycle costing

◙ Putting in place effective contract management

THANK YOU FOR YOUR ATTENTION

I WILL BE HAPPY TO ANSWER YOUR

QUESTIONS

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Sources

• https://stillmed.olympic.org/media/Document%20Library/OlympicOrg/IOC
/What-We-Do/celebrate-olympic-games/Sustainability/Olympic-Games-Gu
ide-on-Sustainable-Sourcing-2019.pdf
• https://www.environment.gov.au/system/files/resources/7b8df2bd-3bb9-
49cc-b417-5f2eb6e0ce37/files/sustainable-procurement-guide.pdf

• https://ec.europa.eu/environment/gpp/index_en.htm
• https://sppregions.eu/fileadmin/user_upload/Resources/Market_Engagem
ent_Best_Practice_Report.pdf

• https://sppregions.eu/fileadmin/user_upload/Life_Cycle_Costing_SoA_Rep
ort.pdf

• https://www.ungm.org/Areas/Public/Downloads/BFABW_Final_web.pdf
• https://sustainable-procurement.org/sustainable-public-procurement/
• Baily, P., Farmer, D., Crocker, B., Jessop, D., & Jones, D. (2015). Procurement
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SUSTAINABLE PROCUREMENT CAN BE FOUND IN BOTH
MANUFACTURING AND SERVICE COMPANIES

PLEASE WATCH A VIDEO ABOUT SUSTAINABLE

PROCUREMENT AT KPMG AND ANSWER THE QUESTIONS
– PLEASE BE PREPARED TO DISCUSS YOUR WORK

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1) Christina Vasili believes that sustainable
procurement is important to KPMG. Why?

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2) KPMG’s sustainable procurement programme focuses on
three key pillars. What are they?

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3) How will KPMG’s sustainable procurement programme
impact their suppliers?

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4) What are some of the benefits that KPMG hopes to derive
from its sustainable procurement programme?

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5) According to Ian Roe, what will the future look like? How will
this impact businesses? How will this impact KPMG’s
relationship with its suppliers?

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6) According to Guy Stallard, where we see a living wage, what
also do we see?

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