Environmental protection is not the work of an entire organisation but an entire planet. While it can certainly start with a single company, that company can encourage other businesses to do their part in protecting and conserving the world’s natural resources.Green procurement is how an organisation gets everything it needs to do business while making as little impact as possible on the environment. That means that all the suppliers and service providers that the organisation procures its needs from, will have to reduce their impact on the environment, as well.The more organisations get their suppliers, providers, partners and other stakeholders to place the same emphasis on environmental protection and conservation, the more global sustainability will be able to take huge steps forward.It is up to individual organisations in their respective ecosystems to do what they can to contribute, and green procurement is a great place to get started.Understanding the Benefits of Green ProcurementIt stands to reason that procurement should be a key focus area for an organisation’s sustainability efforts, as it has many areas that offer several opportunities for implementing sustainable practices. These practices can go a long way toward reducing a company’s environmental footprint which includes its carbon emissions.Altruistic aspirations aside, green procurement is also an integral part of a sound business strategy that benefits an organisation in several practical ways. One of the most popular is the way green procurement practices cut costs on energy, water, materials and maintenance.These practices also enable an organisation to save its own resources and reduce waste, as well as promote the health and safety of its teams.Green procurement and other sustainability initiatives can also greatly enhance a company’s brand reputation to encourage customer loyalty and advocacy. As the number of consumers who prefer brands from eco-friendly companies continues to rise, organisations need to find ways to drive and promote its own green practices to maintain its competitive edge.Integrating Sustainability into Procurement StrategiesGreen procurement becomes a corporate pipe dream without clear sustainability targets and goals, the former being science-based, time-bound, measurable and specific, and the latter being broad and aspirational, yet feasible.The process of setting these targets and goals may be broadly outlined as follows:Assess the current procurement processBase targets on scientific research (e.g. Science Based Targets initiative or SBTi)Set targets that would make a significant differenceEnsure targets are relevant to the organisationPrepare a definite timeline for reaching targets (e.g. 5 years, 10 years)Put progress tracking and assessment protocols in placeGreen procurement policies must likewise be put in place that are applicable to goods and services used for internal operations and for the company’s product and service offerings. A good policy lays the foundation for enhancing an organisation’s performance in financial and social as well as environmental terms.Because most green procurement policies are often made by public entities such as government agencies, it can be challenging for private companies to adopt a policy of its own.A company could, however, formulate its policy by basing it on the United Nations’ Voluntary Sustainability Standards. That policy could include, for example, environmental criteria as part of the company’s supplier selection process.Sustainable Supplier Evaluation and SelectionIn selecting suppliers and service providers as part of a green procurement policy, it can also be challenging to distinguish the earnestly eco-friendly from the greenwashed. It is possible, however, for a procurement team to vet potential and even current partners and suppliers by requesting the following:The supplier’s own sustainability targets, goals and policiesResults of the supplier’s sustainability initiativesOn-site inspection of the supplier’s facilities and processesThe supplier’s own or N-tier suppliers and supply chainCertifications and standards adopted by the supplierKeeping an eye out for these certifications and standards, such as LEED certifications for office interior design is one way to network and eventually collaborate with eco-friendly suppliers. It is equally important to ensure that the certifications of the supplier (and those of its own suppliers) are current.It is also a best practice to take as in-depth a look as possible into a potential supplier’s operations to better understand the potential environmental impact of working with (or procuring from) them.Product Life Cycle AssessmentAnalysing the environmental impact of the products and services procured is an integral part of green procurement, and that impact may be measured using a Life Cycle Assessment or LCA.Though applicable to services, LCAs are typically used for products and the materials used to make them. An LCA also covers the way the products are manufactured, packaged and distributed, as well as how they are used and eventually discarded or (ideally) recycled.And while LCAs may be customised according to a particular focus, such as a product’s environmental or social effects, the ISO 14040 and 14044 standards used for them are uniform all over the world. This makes LCAs one of the go-to methods of sharing or verifying sustainability data for an organisation or for potential procurement partners.The four main stages of an LCA as set forth by ISO are:Setting the goals and scope of the LCAAnalysing the inventory or the material flows of the productAssessing and classifying the different kinds of impact made by the productInterpreting the LCA’s results and verifying the conclusions based on the previous stagesThe results of the LCA can guide an organisation towards procuring, as well as providing products or services with eco-friendly attributes and a smaller carbon footprint.Sustainable Packaging and LogisticsWhether a company produces or procures retail goods that need to be packaged, ensuring the sustainability of the packaging being used is a major consideration for green procurement.Discerning just how sustainable a certain packaging type really is also presents a challenge, as some types, such as paper bags, may actually cause more harm than good depending on the way they are manufactured.Ongoing efforts to replace conventional plastic packaging have resulted in several alternatives which include foregoing packaging altogether, as well as the following:Aluminium from recycled sourcesBioplastic made from wood chips, vegetable fat, corn starch or strawCorrugated cardboard made from recycled paperPaper pulp made from recycled newsprint or cardboardReusable packaging for raw materials or machine componentsStainless steelApart from material, packaging design also plays a key role in green procurement, as more streamlined designs can help save storage space and thereby contribute to more efficient logistics.There are many aspects of transport and logistics that may be improved in terms of sustainability, such as alternative fuels and fuel-efficient vehicles. Fleet management technology can also help organisations to maximise vehicle use by mapping out the most efficient routes, monitoring vehicle maintenance, and making sure each vehicle carries an optimal load.Green Contracting and Legal ConsiderationsIn working with transport and logistics companies or other suppliers, it will be necessary to review the contracts being used for sustainability clauses and other inclusions relevant to the green procurement goals of the organisation.It is just possible that the contracts of both the organisation and a potential supplier have yet to be updated to align with these goals or incorporate environmental regulations and standards.Examples of clauses an organisation might include in a green procurement contract include:Adherence to ESG and occupational health and safety standardsSetting Net Zero targetsRenewable energy requirementsReducing total final energy consumptionRecycling and resource recoverySupply chain transparencySuspension and termination rights for non-complianceConducting a thorough enquiry into potential suppliers and partners prior to contract signing is highly recommended. The organisation itself must conduct regular procurement audits to make sure that all procured goods and services comply with signed contracts, and to detect irregularities such as favouring certain suppliers.Collaboration with Suppliers and StakeholdersIt is no accident for “supplier” and “partner” to be used interchangeably, more so when it comes to green procurement. The success of an organisation’s green procurement policy arguably depends almost entirely on the sustainability policies of its suppliers and stakeholders, with whom the organisation must partner to reach its green procurement goals.Routine inspections for ensuring supplier compliance have become standard, industry observers note how collaborating with suppliers, rather than just checking up on them periodically, is a more effective means of reaching green procurement goals.By encouraging transparency and open communication between suppliers and the procurement team, both sides can develop more practical ways for making the entire process more sustainable. Collaboration goes beyond simple requests for audits and feedback to include actual discussion, planning and management, and even providing assistance.While the data from audits is essential in itself, it can also be used to identify suppliers who might need extra attention or be able to provide insights into areas that can be improved. This way, both sides actively participate in and benefit from a more streamlined and sustainable procurement process.Measurement and Reporting of Environmental ImpactGoal-setting and getting started on green procurement is all very well, but a company will remain in the dark as to progress and effectiveness without the relevant metrics. Regular tracking and reporting on key indicators also helps procurement teams to cut costs, drive growth, reduce waste, and optimise value.Unlike LCAs, there is no single global standard for measuring and reporting environmental impact. However, standards set by the Global Reporting Initiative or GRI are used by most of the biggest companies in more than 100 countries worldwide. GRI standards include sector-specific standards that take an organisation’s context into consideration.The main metrics for assessing sustainability in green procurement measures include:Water, which includes water consumption and pollutionWaste, which includes hazardous and industrial wasteEnergy and Emissions, which are classified into Scope 1, 2 and 3, with 3 being the most difficult to monitor because it involves the entire supply chainOther metrics include efficiency in material use, noise pollution, chemical safety compliance and how many suppliers were audited using sustainability standards. Suppliers and stakeholders can also be included when sharing the results of tracking and reporting activities to encourage them in their sustainability efforts.Overcoming Challenges and Driving ChangeWhile many organisations are most sincere in pursuing a green procurement policy, they face formidable challenges that hinder their sustainability efforts not just in procurement but in the business operations as a whole.One of the most daunting of these roadblocks is how difficult it is to verify the sustainability practices of N-tier suppliers further down the supply chain. Where Tier 1 suppliers are relatively easy to vet, lower tier suppliers tend to have less sustainability protocols in place, and there is less chance of an organisation being able to collaborate with them to manage these difficulties.Other challenges involve the lack of internal resources and knowledge of green procurement practices, uncooperative suppliers, and the higher costs involved. These costs include spending on new systems or technology, although some companies regard this expenditure as an investment into sustainability and profitability down the road.Procurement teams also often need training to use the new technology which includes AI-driven procurement platforms, supplier data collection systems, and production and distribution applications.Case Studies: Success Stories in Green ProcurementAs more organisations choose to face the challenges of green procurement head on, there are some that have come to stand out. These companies are not only examples of sustainability, but of the business success that can be achieved when procurement prioritises the environment.Unilever has over 400 brands used by more than 2 billion people around the world, and its global supply chain covers millions of hectares of land with tens of millions of hectares of adjacent ecosystems.To ensure that its sourcing matches its sustainability goals, the company uses geospatial technology solutions to help them verify that they are sourcing deforestation-free material such as soybean and palm oil. Unilever also recognises their need to evolve from reactive, top-down responses into proactive and inclusive local interventions.IKEA developed its IWAY protocol more than 20 years ago to ensure responsible sourcing for everything that goes into producing its globally distributed home furniture line. Driving environmental protection and conservation is one of IWAY’s four focus areas and 10 principles which also include sustainable and circular management of water, waste and other resources.Greater Group also focuses on responsible materials sourcing as part of its award-winning design and build services, as seen, for example, in its work with premium Australian retailer, Dusk.Having been tasked to manage the manufacturing of the retailer’s store joinery and signage, Greater Group was responsible for finding the right factory partners. The Group also managed warehousing and logistics for more than 30 Dusk stores across the country.On top of procuring FSC-certified timber furniture, Greater Group likewise optimised container and delivery vehicle use through creative product design that enabled flat-packing for shipping.Unlocking Green Procurement PotentialAs the cumulative toll on the environment and the need for sustainable solutions continue to grow, green procurement can be expected to evolve as a viable business practice across industries worldwide.In developing and implementing green procurement policies, organisations will be able to empower not only their own teams but their network of partners and suppliers to do their part in conserving natural resources. Companies will also be able to enjoy other benefits such as cost efficiency, a stronger brand, and improved health and safety for their workforce.While green procurement is a challenge that necessitates the cooperation of everyone involved, the long-term benefits for the company, its suppliers and the environment will be well worth the effort.For organisations with far-sighted, ethical leadership willing to “play the long game”, prioritising the needs of the planet as well as the people will prove to be its most winning game plan, yet.Greater Group is a multi-disciplinary global retail design agency. We have been creating award-winning retail spaces, customer experiences and workplaces since 1989, utilising our combined expertise to deliver high-impact, high-return design, fit-out and manufacturing solutions and provide clients with one point of contact throughout.Contact us at contact@thegreatergroup.com to discuss how we can elevate your brand through innovative, future-proof retail design solutions.Share :
Environmental protection is not the work of an entire organisation but an entire planet. While it can certainly start with a single company, that company can encourage other businesses to do their part in protecting and conserving the world’s natural resources.Green procurement is how an organisation gets everything it needs to do business while making as little impact as possible on the environment. That means that all the suppliers and service providers that the organisation procures its needs from, will have to reduce their impact on the environment, as well.The more organisations get their suppliers, providers, partners and other stakeholders to place the same emphasis on environmental protection and conservation, the more global sustainability will be able to take huge steps forward.It is up to individual organisations in their respective ecosystems to do what they can to contribute, and green procurement is a great place to get started.Understanding the Benefits of Green ProcurementIt stands to reason that procurement should be a key focus area for an organisation’s sustainability efforts, as it has many areas that offer several opportunities for implementing sustainable practices. These practices can go a long way toward reducing a company’s environmental footprint which includes its carbon emissions.Altruistic aspirations aside, green procurement is also an integral part of a sound business strategy that benefits an organisation in several practical ways. One of the most popular is the way green procurement practices cut costs on energy, water, materials and maintenance.These practices also enable an organisation to save its own resources and reduce waste, as well as promote the health and safety of its teams.Green procurement and other sustainability initiatives can also greatly enhance a company’s brand reputation to encourage customer loyalty and advocacy. As the number of consumers who prefer brands from eco-friendly companies continues to rise, organisations need to find ways to drive and promote its own green practices to maintain its competitive edge.Integrating Sustainability into Procurement StrategiesGreen procurement becomes a corporate pipe dream without clear sustainability targets and goals, the former being science-based, time-bound, measurable and specific, and the latter being broad and aspirational, yet feasible.The process of setting these targets and goals may be broadly outlined as follows:Assess the current procurement processBase targets on scientific research (e.g. Science Based Targets initiative or SBTi)Set targets that would make a significant differenceEnsure targets are relevant to the organisationPrepare a definite timeline for reaching targets (e.g. 5 years, 10 years)Put progress tracking and assessment protocols in placeGreen procurement policies must likewise be put in place that are applicable to goods and services used for internal operations and for the company’s product and service offerings. A good policy lays the foundation for enhancing an organisation’s performance in financial and social as well as environmental terms.Because most green procurement policies are often made by public entities such as government agencies, it can be challenging for private companies to adopt a policy of its own.A company could, however, formulate its policy by basing it on the United Nations’ Voluntary Sustainability Standards. That policy could include, for example, environmental criteria as part of the company’s supplier selection process.Sustainable Supplier Evaluation and SelectionIn selecting suppliers and service providers as part of a green procurement policy, it can also be challenging to distinguish the earnestly eco-friendly from the greenwashed. It is possible, however, for a procurement team to vet potential and even current partners and suppliers by requesting the following:The supplier’s own sustainability targets, goals and policiesResults of the supplier’s sustainability initiativesOn-site inspection of the supplier’s facilities and processesThe supplier’s own or N-tier suppliers and supply chainCertifications and standards adopted by the supplierKeeping an eye out for these certifications and standards, such as LEED certifications for office interior design is one way to network and eventually collaborate with eco-friendly suppliers. It is equally important to ensure that the certifications of the supplier (and those of its own suppliers) are current.It is also a best practice to take as in-depth a look as possible into a potential supplier’s operations to better understand the potential environmental impact of working with (or procuring from) them.Product Life Cycle AssessmentAnalysing the environmental impact of the products and services procured is an integral part of green procurement, and that impact may be measured using a Life Cycle Assessment or LCA.Though applicable to services, LCAs are typically used for products and the materials used to make them. An LCA also covers the way the products are manufactured, packaged and distributed, as well as how they are used and eventually discarded or (ideally) recycled.And while LCAs may be customised according to a particular focus, such as a product’s environmental or social effects, the ISO 14040 and 14044 standards used for them are uniform all over the world. This makes LCAs one of the go-to methods of sharing or verifying sustainability data for an organisation or for potential procurement partners.The four main stages of an LCA as set forth by ISO are:Setting the goals and scope of the LCAAnalysing the inventory or the material flows of the productAssessing and classifying the different kinds of impact made by the productInterpreting the LCA’s results and verifying the conclusions based on the previous stagesThe results of the LCA can guide an organisation towards procuring, as well as providing products or services with eco-friendly attributes and a smaller carbon footprint.Sustainable Packaging and LogisticsWhether a company produces or procures retail goods that need to be packaged, ensuring the sustainability of the packaging being used is a major consideration for green procurement.Discerning just how sustainable a certain packaging type really is also presents a challenge, as some types, such as paper bags, may actually cause more harm than good depending on the way they are manufactured.Ongoing efforts to replace conventional plastic packaging have resulted in several alternatives which include foregoing packaging altogether, as well as the following:Aluminium from recycled sourcesBioplastic made from wood chips, vegetable fat, corn starch or strawCorrugated cardboard made from recycled paperPaper pulp made from recycled newsprint or cardboardReusable packaging for raw materials or machine componentsStainless steelApart from material, packaging design also plays a key role in green procurement, as more streamlined designs can help save storage space and thereby contribute to more efficient logistics.There are many aspects of transport and logistics that may be improved in terms of sustainability, such as alternative fuels and fuel-efficient vehicles. Fleet management technology can also help organisations to maximise vehicle use by mapping out the most efficient routes, monitoring vehicle maintenance, and making sure each vehicle carries an optimal load.Green Contracting and Legal ConsiderationsIn working with transport and logistics companies or other suppliers, it will be necessary to review the contracts being used for sustainability clauses and other inclusions relevant to the green procurement goals of the organisation.It is just possible that the contracts of both the organisation and a potential supplier have yet to be updated to align with these goals or incorporate environmental regulations and standards.Examples of clauses an organisation might include in a green procurement contract include:Adherence to ESG and occupational health and safety standardsSetting Net Zero targetsRenewable energy requirementsReducing total final energy consumptionRecycling and resource recoverySupply chain transparencySuspension and termination rights for non-complianceConducting a thorough enquiry into potential suppliers and partners prior to contract signing is highly recommended. The organisation itself must conduct regular procurement audits to make sure that all procured goods and services comply with signed contracts, and to detect irregularities such as favouring certain suppliers.Collaboration with Suppliers and StakeholdersIt is no accident for “supplier” and “partner” to be used interchangeably, more so when it comes to green procurement. The success of an organisation’s green procurement policy arguably depends almost entirely on the sustainability policies of its suppliers and stakeholders, with whom the organisation must partner to reach its green procurement goals.Routine inspections for ensuring supplier compliance have become standard, industry observers note how collaborating with suppliers, rather than just checking up on them periodically, is a more effective means of reaching green procurement goals.By encouraging transparency and open communication between suppliers and the procurement team, both sides can develop more practical ways for making the entire process more sustainable. Collaboration goes beyond simple requests for audits and feedback to include actual discussion, planning and management, and even providing assistance.While the data from audits is essential in itself, it can also be used to identify suppliers who might need extra attention or be able to provide insights into areas that can be improved. This way, both sides actively participate in and benefit from a more streamlined and sustainable procurement process.Measurement and Reporting of Environmental ImpactGoal-setting and getting started on green procurement is all very well, but a company will remain in the dark as to progress and effectiveness without the relevant metrics. Regular tracking and reporting on key indicators also helps procurement teams to cut costs, drive growth, reduce waste, and optimise value.Unlike LCAs, there is no single global standard for measuring and reporting environmental impact. However, standards set by the Global Reporting Initiative or GRI are used by most of the biggest companies in more than 100 countries worldwide. GRI standards include sector-specific standards that take an organisation’s context into consideration.The main metrics for assessing sustainability in green procurement measures include:Water, which includes water consumption and pollutionWaste, which includes hazardous and industrial wasteEnergy and Emissions, which are classified into Scope 1, 2 and 3, with 3 being the most difficult to monitor because it involves the entire supply chainOther metrics include efficiency in material use, noise pollution, chemical safety compliance and how many suppliers were audited using sustainability standards. Suppliers and stakeholders can also be included when sharing the results of tracking and reporting activities to encourage them in their sustainability efforts.Overcoming Challenges and Driving ChangeWhile many organisations are most sincere in pursuing a green procurement policy, they face formidable challenges that hinder their sustainability efforts not just in procurement but in the business operations as a whole.One of the most daunting of these roadblocks is how difficult it is to verify the sustainability practices of N-tier suppliers further down the supply chain. Where Tier 1 suppliers are relatively easy to vet, lower tier suppliers tend to have less sustainability protocols in place, and there is less chance of an organisation being able to collaborate with them to manage these difficulties.Other challenges involve the lack of internal resources and knowledge of green procurement practices, uncooperative suppliers, and the higher costs involved. These costs include spending on new systems or technology, although some companies regard this expenditure as an investment into sustainability and profitability down the road.Procurement teams also often need training to use the new technology which includes AI-driven procurement platforms, supplier data collection systems, and production and distribution applications.Case Studies: Success Stories in Green ProcurementAs more organisations choose to face the challenges of green procurement head on, there are some that have come to stand out. These companies are not only examples of sustainability, but of the business success that can be achieved when procurement prioritises the environment.Unilever has over 400 brands used by more than 2 billion people around the world, and its global supply chain covers millions of hectares of land with tens of millions of hectares of adjacent ecosystems.To ensure that its sourcing matches its sustainability goals, the company uses geospatial technology solutions to help them verify that they are sourcing deforestation-free material such as soybean and palm oil. Unilever also recognises their need to evolve from reactive, top-down responses into proactive and inclusive local interventions.IKEA developed its IWAY protocol more than 20 years ago to ensure responsible sourcing for everything that goes into producing its globally distributed home furniture line. Driving environmental protection and conservation is one of IWAY’s four focus areas and 10 principles which also include sustainable and circular management of water, waste and other resources.Greater Group also focuses on responsible materials sourcing as part of its award-winning design and build services, as seen, for example, in its work with premium Australian retailer, Dusk.Having been tasked to manage the manufacturing of the retailer’s store joinery and signage, Greater Group was responsible for finding the right factory partners. The Group also managed warehousing and logistics for more than 30 Dusk stores across the country.On top of procuring FSC-certified timber furniture, Greater Group likewise optimised container and delivery vehicle use through creative product design that enabled flat-packing for shipping.Unlocking Green Procurement PotentialAs the cumulative toll on the environment and the need for sustainable solutions continue to grow, green procurement can be expected to evolve as a viable business practice across industries worldwide.In developing and implementing green procurement policies, organisations will be able to empower not only their own teams but their network of partners and suppliers to do their part in conserving natural resources. Companies will also be able to enjoy other benefits such as cost efficiency, a stronger brand, and improved health and safety for their workforce.While green procurement is a challenge that necessitates the cooperation of everyone involved, the long-term benefits for the company, its suppliers and the environment will be well worth the effort.For organisations with far-sighted, ethical leadership willing to “play the long game”, prioritising the needs of the planet as well as the people will prove to be its most winning game plan, yet.Greater Group is a multi-disciplinary global retail design agency. We have been creating award-winning retail spaces, customer experiences and workplaces since 1989, utilising our combined expertise to deliver high-impact, high-return design, fit-out and manufacturing solutions and provide clients with one point of contact throughout.Contact us at contact@thegreatergroup.com to discuss how we can elevate your brand through innovative, future-proof retail design solutions.Share :