Green procurement is the purchase of environmentally friendly products and services, the selection of contractors and the setting of environmental requirements in a contract.
B. Main Features
Green procurement steams from pollution prevention principles and activities. Also known as green or environmental purchasing, green procurement compares price, technology, quality and the environmental impact of the product, service or contract. Green procurement policies are applicable to all organisations, regardless of size. Green procurement programs may be as simple as purchasing renewable energy or recycled office paper or more involved such as setting environmental requirements for suppliers and contractors.
"Green" products or services utilise fewer resources, are designed to last longer and minimise their impact on the environment from cradle to grave. In addition, "green" products and services have less of an impact on human health and may have higher safety standards. Whilst some "green" products or services may have a greater upfront expense, they save money over the life of the product or service.
Before a green procurement program can be implemented, current purchasing practices and policies must be reviewed and assessed. A life cycle assessment of the environmental impacts of products or services is required and a set of environmental criteria against which purchase and contract decisions are made has to be developed. The outcome is a regularly reviewed green purchasing policy that is integrated into other organisational plans, programs, policies. A green purchasing policy includes date-stamped priorities and targets, the assignment of responsibilities and accountability and a communication and promotion plan.
Green procurement policies and programs can reduce expenditure and waste; increase resource efficiency; and influence production, markets, prices, available services and organisational behaviour. They can also assist countries in meeting multi-lateral requirements such as the Kyoto Protocol and Rotterdam Convention. International Standards Organisation and other bodies have established guidelines for green procurement programs.
Obstacles to implementing a green procurement program include: lack of readily available environmental friendly products; expensive or zero environmental alternatives; inaccurate studies; lack of organisational support; and inaccurate or unsupported environmental claims by manufacturers and suppliers.
Legislation, organisational policies, directives, environmental management systems or multi-lateral agreements often require organisations to implement a green procurement program.
C. Case Studies and Examples
Fujitsu Japan has a green procurement policy that selects materials; parts; products; and production equipment based on price; environmental impact; quality; and delivery. Environmental considerations include: avoidance of toxic substance during production and disposal; resource and energy conservation; recyclablity; and ease of disassembly for processing and disposal.
Ikea, a furniture and household goods retailer, has implemented a code of conduct for its 2,000 suppliers. The code of conduct focuses on environmental impact and working conditions. An external body verifies information submitted by suppliers. If suppliers do not meet the code, they are requested to remedy the situation and if suppliers continually breach the code, they can be removed from Ikea's suppliers list.
The code includes a list of supplier musts (waste and emission reductions, handling, storage and disposal of hazardous chemicals, recycling, etc) and must nots (use of chemical compounds and substances banned or restricted by Ikea and source of wood).
3. Japan Travel Bureau
Japan Travel Bureau (JTB), a Japanese Travel Agency, implemented an ISO 14001 accredited Environmental Management System (EMS) in 1999. The EMS required the development of a green purchasing policy, which covers office supplies and sales kits.
D. Target Sectors / Stakeholders
Governments, decision makers, suppliers, purchasers and industry are the main stakeholders of a green procurement program. Senior management and purchasing staff support is essential to implement and ensure the on-going success of a green procurement program. Suppliers need to be advised of and included in the establishment of a green procurement program. This will help maintain healthy working relationships and avoid legal implications. Further, suppliers may be able to provide additional product information.
Other stakeholders include all organisational employees since they often request products or services, the community, standard organisation and organisational institutions.
E. Scale of Operation
Implementation of green procurement is best done on the business scale.