Download - The State of Sustainable Procurement
Sustainable Brands
June 2013
The State of Sustainable
Procurement
June 2013
Introduction to the Center
for Sustainable
Procurement
What is the CSP?
The Center for Sustainable Purchasing (CSP) is a BSR
initiative that helps procurement professionals make sound,
informed purchasing decisions that incorporate the best
available product-level sustainability information. We
achieve this by:
Conducting specific product-level pilot projects with participating
companies focused on making the business case and providing tools and
approaches to enable the procurement of more sustainable products
Producing research and content related to the sustainable procurement
of products, and sharing our findings widely with BSR’s member network to
enable other companies to incorporate sustainability into procurement
choices
Why was the CSP Developed?
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Companies
Industry Coalitions
Product Certifications & Standards
NGOs, Startups, Software, Investors
The CSP uses best available data and metrics to figure out HOW
purchasing managers can integrate them into purchasing decisions
How is the CSP Different?
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It is NOT competing with existing
initiatives like The Sustainability
Consortium, or Good Guide to
analyze the life cycles of products
It is NOT driving toward a product
sustainability standard nor aimed
at setting standards for
sustainable purchasing
It IS focused on complementing
these initiatives and others to help
procurement professionals to use
existing product sustainability
data and criteria in purchasing
decisions
It IS seeking to engage and work
collaboratively with companies on
a process for incorporating
sustainability into purchasing
decisions
What the CSP is NOT: What the CSP IS:
Year One Activities and Findings
• Involve the right players: a broad range of internal stakeholders
influence the design, specification, and use of purchased products and
services
• Fit the strategy to the nature of the category and supplier
relationships
– B2B vs. B2C
– Simple vs. Complex
– “Hotspots” in Production vs. Use. EOL
– Substitution vs. Strategic Engagement
• Establish a clear business case for purchasing more sustainable
products:
– Direct cost savings
– Reduced “total cost of ownership”
– “Indirect” value via support of a company’s sustainability objectives
• Start with what is measurable and scale up from there: achieving
total life cycle sustainability will take significant time and effort, making it
important to start simple and build momentum through early wins
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Green Products Roundtable Participants Green Products Roundtable Work Products
Guidance for
Identifying Credible Green Claims Guidance for FTC Green Guides
Framework for Prioritization Business Plan
Green Purchasing Lexicon
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BACKGROUND
William Kornegay
Senior Vice President – Supply Management
Hilton Worldwide
Sustainable Brands ‘13
San Diego - June 6, 2013
© 2013 Hilton Worldwide Confidential and Proprietary
Agenda
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• Responsibility / Sustainability for a Global Hospitality Company
• Driving and Managing Performance
• Sustainable Procurement: A Hilton Worldwide Perspective
• Why the Center for Sustainable Procurement?
© 2013 Hilton Worldwide Confidential and Proprietary 11
“Addressing the challenges and complexities
of responsibly managing the human and natural resources that are essential to our
business while providing our guests with great travel experiences”
Sustainability/Responsibility for a Global Hospitality Company
© 2013 Hilton Worldwide Confidential and Proprietary
• Managing Natural
Resources
(Energy, Carbon,
Waste, Water)
• Restoration and
Awareness
• Education and Life
Skills
• Workforce
Development and
Career Pathways
• Diversity and
Inclusion
• Global
Commerce
• Cultural
Experiences
• Local Economies
• Community
Hospitality
(Volunteering,
Hunger, Shelter &
Disaster)
• Human Rights
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Corporate Responsibility at Hilton Worldwide
© 2013 Hilton Worldwide Confidential and Proprietary 13
Over $147 million in
savings through
significant reductions in
carbon output (11%)
waste (23.3%)
energy use (9.7%)
water (7.5%)
Driving and Managing Performance: LightStayTM
© 2013 Hilton Worldwide Confidential and Proprietary 14
Sustainable Procurement: A Hilton Worldwide Perspective
• Hilton Supply Management, in
collaboration with DH Hospitality Group,
Inc., has developed a mattress recycling
program in coordination with the
installation of new Serta mattresses and
box springs.
• In support of the Hilton Worldwide
sustainability initiatives, the components
of the mattresses and box springs are
recycled into various products rather
than being diverted to a landfill.
• On average, 85% of the components can
be recycled, and the number of recycled
mattresses and box springs can be
tracked under the donations tab within
LightStayTM.
© 2013 Hilton Worldwide Confidential and Proprietary 15
Why the Center for Sustainable Procurement?
Hilton Worldwide partnered with BSR to launch the Center for Sustainable
Procurement to support research, surveys, metrics analyses and educational
guidelines and collaborative consulting projects that will help business
procurement managers integrate sustainability into their purchasing decisions.
© 2013 Hilton Worldwide Confidential and Proprietary 16
“Unless we do everything we can to nurture and support sustainability –
both people and planet – we won’t have a business to sustain. For Hilton
Worldwide, this is the truth we live by, and it is why we have chosen to
travel with purpose.”
Christopher J. Nassetta
President and Chief Executive Officer, Hilton Worldwide
Sustainable Public Purchasing Worldwide: Key findings from the UNEP State of Sustainable Public Procurement Report
Dr. Anastasia O’Rourke
Principal: DEKRA Sustainability & Performance Excellence www.dekra.de/en/consulting
The State of Sustainable Public Procurement
Seite 18 © 2012 DEKRA
Major purchasers of goods and services in the US
US Federal State and Local Spending 2011:
2,576Bn
Governments are responsible for between
15-20% of GDP in OECD countries
(OECD, 2002 & 2011)
The State of Sustainable Public Procurement
Extensive research undertaken into ‘SPP’ and ‘GPP’ by national governments Conducted for UNEP in 2012, published May 2013
Literature & Desktop Review
Expert Interviews
(20)
Country Case
Studies Chile; EU
India; Japan
Slovenia; USA
Global Survey
110: Nat. Gov. 163: Stakeholders
Investigate: Sustainable/green public procurement worldwide
Europe 31%
Nth America 15%
Sth. America 16%
Asia Pacific
17%
Africa 21%
The State of Sustainable Public Procurement
At least 56 countries have adopted SPP/GPP policies
From our survey, we identified:
•43 countries now have national public
institutions that have adopted SPP/GPP policy
measures
Through additional research we found:
•13 countries also have adopted a national
SPP/GPP policy; and
•Several more countries are currently developing
and/or adopting SPP/GPP policies.
The State of Sustainable Public Procurement
Not all national SPP/GPP policies take the same form
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Q: What national policies & regulations currently include provisions for SPP/GPP
(National Government respondents only, each country counted once)
The State of Sustainable Public Procurement
Different agencies are leading & supporting the effort
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Q What government institutions are playing a leading or important role in the implementation of SPP/GPP in your country?
The State of Sustainable Public Procurement
Action plans, legal reviews, market assessments & training
Q: Have any of the following SPP/GPP activities been undertaken by the national government?
1. Action plans created
2. Legal reviews
3. Legal framework improved to allow inclusion of sustainability criteria
4. Best practices documented
5. Training/capacity-building
6. ‘Value for money’ criteria adopted, not only lowest price
7. Prioritization exercise
8. SPP/GPP committee in operation
9. LCA for key product categories
10. Spend analysis
11. Market readiness analysis
12. Identification of key sustainability impacts
13. Whole of life/ Life cycle costing adopted
14. Implementation for “quick win” categories
The State of Sustainable Public Procurement
Seite 24 © 2012 DEKRA Q: To what extent are the following product or service groups are currently covered by a SPP/GPP policy or guideline in your
country?
Many product-category guidelines are being produced
The State of Sustainable Public Procurement
“Priority” environmental & social issues get considered
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Priority Environmental AspectsQ17 If there are priori ty environm ental aspects covered by SPP/GPP pol icy, what are they?
59
44
37
31
2825 24
16
35
31
22
Energy CO2 and
methane
emissions
Waste to
landfill
Water Hazardous
substances
Materials Local
environment
Biodiversity Emissions to
water
Other natural
resources
Other air
emissions
Q: If there are priority environmental aspects covered by SPP/GPP policy, what are they?
The State of Sustainable Public Procurement
Implementation is about more than adding specifications
Q: In what stages of the procurement cycle is your national government currently emphasizing SPP/GPP considerations?
The State of Sustainable Public Procurement
There are many perceived obstacles
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Q: Which of the following form a barrier to
SPP/GPP in your country?
More expensive
Confusing definitions
Insufficient supply
Quality concerns
The State of Sustainable Public Procurement
Yet growth in SPP/GPP is forecast
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More than
today 50%
Same as
today 14%
Less than
today 2%
Substantially more
than today 34%
Q: Do you expect your national governments to increase SPP/GPP activities I the next five years?
The State of Sustainable Public Procurement
There are several implications for suppliers
• Expect to see more requirements from customers, showing up
in more places
• Keep an eye on product-category guidelines & participate in their
creation
• The trend is towards 3rd party verification, so substantiate claims
carefully
• Link sustainability performance to product performance
• Demonstrate sustainability benefits of products/services,
preferably with numbers
• Educate your customers; address cost, quality and supply issues
• There is an urgent need for international coordination. Two new
venues to note:
Sustainable Purchasing Council www.purchasingcouncil.org
UNEP Sustainable Public Purchasing Initiative
The State of Sustainable Public Procurement
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For your reference
UNEP State of Sustainable Public Procurement 2012 Executive Summary and Full Report:
• www.unep.fr/scp/procurement/docsres/
My contact details:
• Ph. +1 203 215 1575
• New Haven, CT, USA
Acknowledgments:
• Dr. Charlotte Leire, Lund University, Sweden (co-author)
• Trevor Bowden, Big Room Inc, Canada (co-author)
• Farid Yaker & Carlos Enmanuel DTIE UNEP, France
• Over 300 interviewees, SPP expert reviewers & survey participants
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Introducing the…
SUSTAINABLE
PURCHASING
COUNCIL
Mission
To support and recognize organizations
in taking responsibility for the consequences
of their goods and services spending.
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BEFORE (early 1990’s)a AFTER (early 2010’s)
Market fragmented by inconsistent guidelines LEED provides all stakeholders with common language
No shared training program for green building LEED AP makes training accessible to everyone
Can’t differentiate credible from greenwash LEED defines credible standards and eco-labels
Leadership recognition based on marketing Leadership recognition based on performance
Shared challenges solved project by project Shared challenges addressed through LEED versioning
Benchmarking data is difficult to find LEED data enables sophisticated benchmarking
Creativity consumed reinventing the wheel Creativity focused on innovation
ROI demonstrated on case by case basis ROI of LEED approach consistently documented
Green building is expensive Building LEED-certified adds negligible cost
“A common standard is impossible.” ➔ A common standard is widely embraced and used.
“Green building will always be niche.” ➔ Green building is becoming the norm.*
* Green building is estimated at 44% of non-residential new construction in 2012.
ANALOGY USGBC/LEED
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RATING SYSTEM
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FRAMEWORK
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