WWW.SUSTAINABLEPURCHASING.ORG Sam Hummel Director of

W W W. S U S TA I N A B L E P U R C H A S I N G . O R G
Sam Hummel
Director of Outreach & Operations
[email protected]
1
Agenda
1.  Brief SPLC background
2.  What is leadership in sustainable
purchasing, really?
3.  Steps for achieving leadership
4.  Q&A
2
“ Our acquisition of goods and
services creates a carbon footprint
nine times that of our buildings
and fleet, put together.”
Dan Tangherlini
(Former) Administrator
US General Services Administration
3
OVERFISHING
DEFORESTATION
DISCRIMINATION
SWEATSHOPS
Many impacts are more prevalent in supply chains, not just GHGs.
4
Who is SPLC?
5
SPLC Founders Circle
City of
Portland, OR
State of
California
City of San
Francisco, CA
State of
Michigan
Convened 2013
City of
Washington, DC
State of
Minnesota
U.S.
DEPARTMENT
of
AGRICULTURE
6
Launch Partners
7
Broad Coalition
Federal purchasers:
DOE, EPA, GSA, USDA, LBL, PNNL
State/local government purchasers:
Cities: Cleveland, Denver, Portland, San
Francisco, Santa Monica, Municipal Collaboration
for Sustainable Procurement, Sound Transit
Counties: Alameda, Arlington, King, Multnomah,
Snohomish
State/Province: California, CalRecycles, CDOT,
DC, Massachusetts, Michigan, Minnesota, Nova
Scotia, NERC
College and university purchasers:
American, Arizona State, Emory, George
Washington, Michigan State, Portland Community
College, Portland State University, Southern CT
State, UC Santa Barbara, UPenn, UT Austin,
Association for the Advancement of Sustainability
in Higher Education
Corporate purchasers
Accenture, Aflac, Allstate, Aramark, Belk, Best Buy,
Bloomberg, Caesars, CBRE, CH2M, Citi, Edelman,
EPRI, FedEx, Goodyear, Hilton, JCPenney,
Interface, Lockheed, Mahindra, Microsoft, Office
Depot, Pacific Gas & Electric, Sonoco, TD Bank
Environmental interest organizations:
CalRecycle, CEGESTI, Center for Environmental
Health, Ecoinstitut, ISEAL Alliance, MI DEQ, MN
PCA, Practice GreenHealth, Sustainable Methods
Institute, USGBC, US DOE, US EPA, World
Resources Institute, WWF
Today: ~130 members; > $200bn in spend
Social interest organizations:
Coalition of Immokalee Workers, CorpWatch, Equitable
Origin, Fair Trade USA, International Campaign for
Responsible Technology, International Labor Rights Forum,
Canadian Aboriginal and Minority Supplier Council, Social
Hotspots Database Project
Business associations:
American Sustainable Business Council, American
Chemistry Council, American Coatings Association, Business
and Institutional Furniture Manufacturers Association
(BIFMA), Consumer Specialty Products Association, Institute
of Supply Management
Suppliers
Accenture, Altenex, Apex Clean Energy, ASSA-ABLOY,
Biosynthetic Technologies, BuildingWise, CarbonNeutral Co,
Dell, Domtar, EcoLab, EcoVadis, Edelman, FedEx,
Goodyear, Kuhn Associates, iFixIt, Lockheed, MindClick,
Office Depot, PRé, RepRisk, Resource Recycling, SciQuest,
Sonoco, Sphere E, Thinkstep, TreeZero, Trucost, Venable
LLP, VitalMetrics, Waste Management
Product Certifiers/Standards Developers/Labelers:
Center for Resource Solutions, CIPS Sustainability Index,
Equitable Origin, Fair Trade USA, Forest Stewardship
Council, GreenCircle Certified, Green Seal, Roundtable on
Sustainable Biomaterials, SCS Global Services, Sustainable
Forestry Initiative, UL Environment, USDA, US EPA
Partners:
ANSI, BSR, ICLEI, NASPO (National Association of State
Procurement Officials), Product Stewardship Institute,
Responsible Purchasing Network, Sustainable Food Lab
8
Why is SPLC multi-sector?
9
Share of US GDP by end-use consumption.
Education services
Health care
Housing
Financial services and insurance
Food services
Transportation services
Recreation services
Communications services
Personal care services
Hospitality services
Share of US GDP by end-use consumption.
11
Share of US GDP by end-use consumption.
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The largest professionally-managed demand signal driving the global economy.
Analysis by TRUTHstudio based on US Bureau of Economic Analysis 2011 Summary Use Annual I-O Table
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Fragmented demand signal…
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…emanating from silo-ed efforts…
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…causes confusion for suppliers, slowing market transformation.
16
Root Challenge
The lack of standardization in
how sustainable purchasing
is defined, guided, measured,
and rewarded.
17
What are SPLC members
doing to address this
challenge?
18
SPLC members are creating a
a multi-sector program
for guiding, measuring, and
recognizing leadership in
sustainable purchasing.
19
Program Development
!  Community of Practice (July 2013)
20
Program Development
Principles
Technical Advisory
Group (TAG)
1/3 Purchaser
1/3 Suppliers
1/3 Public Interest
Advocate
!  Principles (May 2014)
!  Community of Practice (July 2013)
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Program Development
Technical Advisory
Committee (TAC)
Technical Advisory Groups
Chemicals
Construction &
Renovation
Electricity
Food
IT Hardware &
Services
Professional
Services
Transportation
& Fuels
Wood &
Agrifiber
!  Category Guidance (Feb 2015)
!  Program Guidance (Feb 2015)
!  Principles (May 2014)
!  Community of Practice (July 2013)
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Program Development
16+ hours of training videos
!  Training (Feb-present 2015)
!  Category Guidance (Feb 2015)
!  Program Guidance (Feb 2015)
!  Principles (May 2014)
!  Community of Practice (July 2013)
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Program Development
Rating System (2016)
Benchmarking (2016)
Self-assessment (2016)
A few Purchaser
seats are still
available on
program
committees.
!  Training (Feb-present 2015)
!  Category Guidance (Feb 2015)
!  Program Guidance (Feb 2015)
!  Principles (May 2014)
!  Community of Practice (July 2013)
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Market Transformation
A
MARKET
CLARITY
Multi-sector
guidance enables
purchasers and
suppliers in any
sector to speak a
common
language.
B
COMPETITIVE
ADVANTAGE
C
Suppliers compete to
help purchasers
improve their
performance.
(“I can get you a point.”)
NEW
NORMAL
Market clarity and
competition results in
improved products and
services becoming
available for everyone
in the marketplace.
Rating System (2016)
Benchmarking (2016)
Self-assessment (2016)
Training (Feb-present 2015)
! 
! 
Category Guidance (Feb 2015)
! 
Program Guidance (Feb 2015)
! 
! 
Principles (May 2014)
Launch of Council (July 2013)
25
Agenda
1.  Brief SPLC background
2.  What is leadership in sustainable
purchasing, really?
3.  Steps for achieving leadership
4.  Q&A
26
+ IMPACT
27
Principles for Leadership in Sustainable Purchasing
Download the full Principles packet: www.sustainablepurchasing.org/principles (available to the public)
28
Understand > Commit > Results
PLAN
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Much easier than going
product-by-product
30
Think of it like “Strategic Sourcing”
Identify target
spend
Strategy
precedes
Create the
sourcing team
tactical
implementation
Develop
strategy and
communication
plan
Gathering
market
information
Etc…
31
Prioritization Example
5
Insight:
purchasing
categories
64%
of total
spending
83%
of estimated
impacts
Analyzing & prioritizing enables focus on best opportunities.
Helps avoid exhausting resources chasing the long tail.
32
Agenda
1.  Brief SPLC background
2.  What is leadership in sustainable
purchasing, really?
3.  Steps for achieving leadership
4.  Q&A
33
Guidance v1.0 Preview (53 pgs):
www.sustainablepurchasing.org/guidance
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Key Terms
Sustainable Purchasing
Program (noun, all-caps):
a sustainable purchasing
program that has all four
components the Council
considers essential for a
program to be capable of
achieving genuine
leadership.
Achieving genuine leadership
means taking meaningful
responsibility for all the
significant environmental,
social, and economic
consequences of the
organization’s purchasing.
35
Chapter 2:
Creating a Program
Chapter 3:
Running a Program
36
Chapter 4: Category Guidance
•  Key Impacts
Categories in Guidance v1.0
•  Credible Actions
•  Benefits
•  Metrics
•  Resources
What’s unique about SPLC’s
category guidance?
1)  Developed through multistakeholder consensus
process
2)  Includes social,
environmental and
economic impacts
3)  Purchasers in many
sectors are using the
same guidance, creating
a consistent demand
signal for suppliers
37
Step 1: Understand
Sustainability Spend Analysis
38
Spend Analysis
“Sustainability-related” Spend Analysis
pairs conventional spend analysis data with related information
about the environmental, social, and economic performance of
products and suppliers, such as:
•  suppliers’ size and diversity
•  estimated GHG emissions associated with certain services
•  products known to have a high risk of human rights abuses
In order to answer:
•  What is the cumulative effect of our purchasing?
•  What areas of purchasing offer the greatest room for
improvement?
Purchase
History Data
Sustainability
Data
Consequences
of Purchases
39
Spend Analysis
Two Main Types
Type
Purchasing Category Analysis
Supplier Analysis
Focus
What are we buying?
From whom are we buying?
Purpose
Identify product and service categories within
the organization’s purchasing that present
significant environmental, social, and economic
performance risks.
Identify whether the overall make-up of the
organization’s supply base reflects its values,
and whether individual suppliers present
significant environmental, social, and
economic performance risks.
Analytical
Questions
• 
• 
• 
Benefit
What are the most significant cumulative
impacts across all of the organization’s
purchasing?
Which categories are contributing more to
those cumulative impacts?
Where in the supply chain are the impacts
originating?
Enables Strategy Planning to focus on the
categories that present the greatest opportunity
to improve the overall performance of the
organization’s purchasing.
• 
• 
• 
Do we have the right mix of small,
medium, and diverse suppliers?
Are our biggest dollar suppliers
sustainability leaders or laggards in their
categories?
Do any of our suppliers present an outsized sustainability risk for us?
Enables Strategy Planning to focus on
aspects of the organization’s supplier
selection processes that present the greatest
opportunity to improve the supply base’s
overall performance.
40
Step 1: Understand
Two Main Types
Type
Purchasing Category Analysis
Supplier Analysis
Focus
What are we buying?
From whom are we buying?
General
Method
Pair purchase history data with information
about the estimated environmental, social, and
economic risks associated with the product
and service categories in which the
organization buys.
Pair purchase history data with information
about supplier characteristics and
supplier performance history from an
environmental, social, and economic
perspective.
When
to Use
When the aspect of environmental, social, and
economic performance being evaluated is
associated with the quantity and characteristics
of the products or services purchased.
When the aspect of environmental, social,
and economic performance being evaluated
is associated with characteristics of a
supplier or the supply base, as a whole.
Data
Source
Examples
Economic Input/Output Lifecycle Assessment
databases; process lifecycle assessments;
sector analyses; country of origin analyses;
standards, labels and certifications; expert
knowledge; information provided by the
supplier
Data reported publicly or directly by
suppliers; audit or third-party verified data;
standards and certifications; regulatory
compliance data
41
Example: Category Analysis (GHGs)
Analysis
performed for the
City of London
42
Example: Supplier Spend Analysis
43
Spend Analysis Resources
•  SPLC handouts:
Spend analysis tool providers
•  Meta-analysis of 80 public sector
GHG spend analyses (WCCF)
•  SPLC Spend Analysis SOW
template (in progress)
•  Guidance v1.0, Chapter 3
SPLC Information Series
Title
Purchasing Category Spend Analysis Tool Providers
No.
2015-001
Rev.
Feb 04 2015
Pages 6
© 2015 SPLC. All rights reserved.
SPLC Information Series
Title
Supplier Spend Analysis Tool Providers
No.
2015-002
Rev.
Feb 04 2015
Pages 8
© 2015 SPLC. All rights reserved.
Purchasing Category Analysis
Tool Providers
The tables in this document describe the sustainability-related capabilities of several spend
Supplier
Analysis Tool Providers
analysis tool providers, as reported by the tool providers. The tables are provided as a jumping
off point for purchasers looking for tools or services to assist them with conducting a spend
The tables
in this document
the sustainability-related
capabilities
of several
spend
analysis.
Additionaldescribe
tool providers
interested in being included
in these
tables
should send their
analysis tool
providers,
as reported by the tool providers. The tables are provided as a jumping
information
to [email protected].
off point for purchasers looking for tools or services to assist them with conducting a spend
analysis. Additional tool providers interested in being included in these tables should send their
Sustainability-related Purchasing Category Analysis
informationAbout
to [email protected].
Focus
“What are we buying?”
About Sustainability-related Supplier Analysis
Purpose
Identify product and service categories within the organization’s purchasing that present
significant environmental, social, and economic performance risks.
Focus
“From whom are we buying?”
Analytical
• What
the most
significant
impacts
across
of the its
organization’s
Identify whether
theare
overall
make-up
of thecumulative
organization’s
supply
baseall
reflects
values, and
Questions
purchasing?
whether individual
suppliers present significant environmental, social, and economic
• Which
performance
risks. categories are contributing more to those cumulative impacts?
• Where in the supply chain are the impacts originating?
Analytical
• Do we have the right mix of small, medium, and diverse suppliers?
Enablesdollar
Strategy
Planning
to focus on
the categories
thatinpresent
the greatest opportunity
Questions Benefit
• Are our biggest
suppliers
sustainability
leaders
or laggards
their categories?
to improve the overall performance of the organization’s purchasing.
• Do any of our suppliers present an out-sized sustainability risk for us?
Purpose
Benefit
General Method
Pair purchase history data with information about the estimated environmental, social, and
Enables Strategy Planning to focus on aspects of the organization’s supplier selection
economic risks associated with the product and service categories in which the organization
processes that present the greatest opportunity to improve the supply base’s overall
buys.
performance.
When to Use
When the aspect of environmental, social, and economic performance being evaluated is
General Method
Pair purchase history data with information about supplier characteristics and supplier
associated with the quantity and characteristics of the products or services purchased.
performance history from an environmental, social, and economic perspective.
Data Source
Input/Output Lifecycle Assessment databases; process lifecycle assessments; sector
When to Use
When the aspect of environmental, social, and economic performance being evaluated is
Examples
analyses; country of origin analyses; standards, labels and certifications; expert knowledge;
associated with characteristics of a supplier or the supply base, as a whole.
information provided by the supplier
Data Source
Data reported publicly or directly by suppliers; audit or third-party verified data; standards and
Examples
certifications; regulatory compliance data
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Step 2: Commit
Prioritizing Actions
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Purpose is to get to net positive ASAP
Net Positive
Purchasing ENHANCES longterm health and vitality of the
community, economy and planet.
Time
Purchasing DETERIORATES the
long-term health and vitality of
the community, economy and
planet.
Net Negative
46
Which of these paths is better?
Net Positive
Acme
Nova
Time
Acme Corp.
Nova Inc.
Net Negative
47
Impacts are cumulative! Prioritization matters.
Net Positive
Acme
Nova
Time
Acme Corp.
Nova Inc.
Net Negative
48
What about acting on low-priority areas?
SPLC’s emphasis on prioritization IS INTENDED to:
• 
Motivate early action on areas of greater consequence, both because of
their magnitude and the cumulative effect of neglecting action on them.
• 
Call attention to the fact that while “every bit counts”, some bits count a lot
more than others.
• 
Clarify that action taken exclusively on lower priority areas does not
constitute ‘leadership’ in sustainable purchasing.
SPLC’s emphasis on prioritization IS NOT INTENDED to preclude
taking action on lower priority areas.
• 
There are many cases where it will be synergistic to tackle lower priority
areas alongside higher priority areas, or, where a lower priority area can
be addressed without slowing action on higher priority areas.
• 
Getting to net positive will ultimately require addressing smaller impacts.
49
Two Stages of Prioritization
50
Strategy Cycles
Strategy Cycles provide a flexible process for a
group of key stakeholders collaborate to:
• 
understand opportunities for improvement;
• 
prioritize strategies for addressing them;
• 
commit to specific strategic actions;
• 
implement those actions; and
• 
measure the results over time.
51
Key Terms
Strategy Plan (capitalized)
A planning document that describes, in detail, the projects/activities
that make up an organization’s Strategy in a given area of focus.
In this cycle, we’re
going to develop a
strategy for managing
the consequences of
our fuel purchasing.
We’ll call it our “Fuel
Strategy.”
Fuel
Strategy
Plan
Boss, we’d like you to
review and approve our
Fuel Strategy Plan.
We got the green light!
Now, we can implement
our Fuel Strategy Plan!
52
Example: Alameda County Paper Strategy
1)  Analyzed current paper
purchasing
2) Analyzed cost of switching
to 100% PCR
17%
increase7
53
Example: Alameda County Paper Strategy
3) Put together a Paper Strategy Plan
Strategy
How We Did It
Efficiency
Set printer/copier default to duplex
Process Change
Implemented e-signature, electronic file storage,
and other technology solutions
Behavior Change
Competition and norming efforts to engage
employees in efforts
Supplier
Engagement
Business practices E-Procurement
Product Substitution
Switch to exclusively 100% PCR paper
Combining Projects
Reduce paper use to offset cost increase of 100%
PCR paper
54
Example: Alameda County Paper Strategy
4) Delivered OUTSTANDING RESULTS
Saving $100,000 per year
Cut emissions = 86 cars per year
2009 Spend
19% Savings7
55
Types of Solution Strategies
Download this table as a handout at
www.sustainablepurchasing.org/resources
DETAILED GUIDANCE
SOLUTION STRATEGIES TO CONSIDER
Strategy
Description
Example
Efficiency
Reduced impact through reduced use
Implementing a Purchase-to-Pay IT system reduces impacts associated with
printing and transporting paper documents.
Process change
Design the impact out of a process
Air pollution from medical waste incineration is reduced by switching to reusable
surgical tools that are steam sterilized.
Behavior change
Implement programs to shift attitudes and
practices
Voluntary “green office” competitions reduce energy and material consumption,
while increasing recycling.
Combining Projects
Combine multiple projects into a single
positive ROI project
An energy efficiency project is combined with a solar project. Energy savings
offset the solar costs for a good overall ROI.
Supplier engagement &
accountability
Engage suppliers and hold accountable for
a specific impact
Some universities require apparel manufacturers to permit independent audits of
factory conditions and provide retribution-free grievance and remedy processes.
Product substitution
Choose a different product with lower ESE
impacts
Chemical costs and workers compensation insurance premiums reduced by
switching to green cleaning products.
Supplier substitution
Choose a supplier with lower ESE impacts
Making evidence of bribery or extortion automatic grounds for suspension of
business with a supplier.
Servicizing
Convert a product acquisition to a long-term
service relationship
Instead of owning copiers, establish a pay-per-copy service relationship so that
the price of each copy reflects the true cost.
In-source
In-source a function to better reduce
impacts
Hiring LEED expertise in-house to optimize and streamline green building across
all of org’s construction and renovations.
Out-source
Outsource when an external party can
better reduce impacts
Contract out utility bill management to firms that leverage energy market expertise
to cut energy and carbon costs.
Offsetting
Pay for an impact reduction to offset
impacts elsewhere
Buying carbon offsets; paying to put land in permanent conservation to offset
development of other land.
56
Agenda
1.  Brief SPLC background
2.  What is leadership in sustainable
purchasing, really?
3.  Steps for achieving leadership
4.  Q&A
57
Question and Answer
SPLC Update
Newsletter
www.sustainablepurchasing.org/update
58
Programs
•  Professional Development – Training, Webinars, CEUs
•  Professional Networking – Online Collaboration Platform, Events
•  Guidance & Tools – Principles v1.0, Guidance for Leadership in
Sustainable Purchasing v1.0, Category Guidance, Resources
•  Convenings – Annual Summit, Workshops, Peer discussion groups
•  Solution Matching – SPLC Connect, Sponsorship, Supplier directory
•  Leadership Recognition Programs – Awards, Rating System
•  Outreach – Speaking and Connecting
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