guidance for leadership in sustainable purchasing chapter 4: purchasing category guidance...

Guidance for Leadership in Sustainable PurchasingChapter 4: Purchasing Category GuidanceProcurement of Professional Services

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March 17, 2015

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Recording

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resource for public access.

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Chapter 2. Create the Program

Agenda

1. Context

1. Upcoming Pilot Program Education Sessions

2. Key Terms

3. Approach to Purchasing Guidance

2. Procurement of Professional Services

1. Impacts and Findings

2. Purchasing Recommendations

3. Further Exploration

West Coast Climate Forum &

Alameda County

3. Q&A + Discussion

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Education Sessions Schedule

All sessions take place from 11:00-12:30pm ET.

February 24: Creating a Sustainable Purchasing Program

March 5: Running a Sustainable Purchasing Program (Part 1 of 3) – Understanding and Launching Strategy Cycles

March 10: Running a Sustainable Purchasing Program (Part 2 of 3) – Spend Analysis

March 12: Running a Sustainable Purchasing Program (Part 3 of 3) – Planning Strategies, Implementing & Reporting

March 17: Professional Services

March 19: IT Hardware and Services

March 24: Transportation

March 26: Paper

April 1: Cleaning and Sanitizing Chemicals for Facilities Care

April 8: Landscaping and Grounds Maintenance

April 15: Electricity

April 22: Food

April 29: Construction and Renovation

May 6: Furnishings

https://attendee.gotowebinar.com/register/4435926151073461506









Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Key Terms

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.

Sustainable Purchasing Program (all-caps)

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Key Terms

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.

Strategy (capitalized)A specific area of focus for which a plan of action is being developed or has been developed.

Examples could include an organization’s “Electricity Strategy”, “Supplier Diversity Strategy”, “IT Strategy”, “Human Rights Strategy”, etc.

There are several types of Strategies an organization might prioritize for their Sustainable Purchasing Program:• A category Strategy• A Strategy focused on a specific aspect of the supply chain’s

environmental, social, and economic performance• A supplier-specific Strategy

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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.

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Key Terms

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.”

Boss, we’d like you to review and approve our Fuel Strategy Plan.

FuelStrategy

Plan

We got the green light! Now, we can implement our Fuel Strategy Plan!

Environmental, Social, and Economic Performance Environmental, Social, and Economic Consequences Positive or negative influences on the natural, social, and market systems on which life, communities, and commerce depend.

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Key Terms

Leadership in sustainable purchasing involves thinking expansively and holistically about these influences and identifying how to optimize them in order to advance a positive future.

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Worksheet handout available for download:www.sustainablepurchasing.org/performance

https://www.sustainablepurchasing.org/performance

https://www.sustainablepurchasing.org/performance

Program LeaderGeneric term for the person who leads an organization’s Sustainable Purchasing Program.

A wide range of professionals have been found to be serving the Program Leader role. In some organizations, the Program Leader is a Sustainable Purchasing Coordinator, in others it’s a sustainability staffer or someone in Environmental Health & Safety, and so on.

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Key Terms

Implementation TeamThe individuals that will implement the projects within a Strategy.

These could be the same as the Strategy Team, but often it will include staff with specific implementation expertise. (E.g., Print Shop Manager is on Strategy Team, but implementation responsibility is passed to Print Shop Foreman.)

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Key Terms

Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Approach to Purchasing Guidance

The Purchasing Category Guidance provides the following:

• clusters of significant environmental, social, and economic

impacts;

• best available actions to address the identified impacts;

• external and organizational benefits

• anticipated challenges

• metrics and indicators that teams can use

to track progress

• policy and specification language

and resources to assist in implementing

the proposed actions, and

• undecided issues

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Why use the Purchasing Category Guidance?

• Provides reliable information consistent with how a cross-functional team operates within the context of this guide.

• Can expedite the Strategy Planning process outlined in Chapter 3

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Organizational Considerations

Existing organizational priorities

e.g., strategic plan, guiding principles, regulations, policies, advancing brand leadership, existing reporting requirements, existing rating/certification requirements, improvements to business units, etc.

Cost e.g., initial cost, return on investment, total cost of ownership, etc.

Performance improvement potential

e.g., tons of CO2e reduced, gallons of water saved, improved indoor air quality, increased user satisfaction, etc.

Implementation logistics e.g., feasibility within an existing long-term contracts, opportunity to improve upon expiring contracts, scalability, transferability

Organizational risk tolerance e.g., taking a temporarily conservative approach to new initiatives due to unforeseen market volatility, brand management, etc.

Resource availability e.g. financial and human resources

Functional performance What are the functional performance needs for individual products and services procured by an organization? How does this relate to the opportunities available to purchase products with improved environmental, social, or economic performance?

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Types of Recommended Actions

Policy Recommendations Many categories recommend exploration of existing policies and finding ways to improve them. Institutionalizing this inquiry process could result in significant cost savings for the organization as well as a more strategic use of funds that are spent.

Operational Recommendations Sometimes the largest opportunities for mitigating the environmental, social, and economic impacts associated with purchasing require leveraging operational changes. Operational changes often provide benefits for seemingly unrelated purchasing categories.

Purchasing Recommendations How can the organization buy better?

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Approach to Purchasing GuidanceDETAILED 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.

Download this table as a handout at www.sustainablepurchasing.org/resources

https://www.sustainablepurchasing.org/resources

Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Professional Services Industries characterized by low capital intensity, high knowledge intensity and a professionalized workforce. Examples include legal, consulting, architectural, engineering, public relations, and financial firms. While organizations tend to find a low per dollar risk associated with professional services purchasing, high purchase volumes can make this one of the most important categories for organizations to address.

This guidance focuses on impacts or consequences associated with the use phase of professional services.

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Professional Services Defined

Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Professional Services Impacts

Understanding Part 1: Why should we care?

Environmental and social impacts from travel.

Regular travel from the provision of professional services results in a variety of environmental impacts. The impacts vary by the mode of transportation itself distance traveled, among other factors.Additionally, social and economic impacts directly affecting individual employees can result from regular or excessive job-related travel.

Environmental impacts from service deliverables development and transport.

Depending on the type of service deliverable, impacts from printing, packaging, and shipping can have negative environmental impacts.

Note: The impacts presented above represent a common cluster of impacts related to the procurement of services. Because of the variation in impacts associated with service providers (e.g. legal, public relations, or human resources provider impacts; local versus distant providers), the impacts appear in an order associated with the amount of control the purchasing organization holds in influencing the service provider’s environmental, social, and economic performance improvement.

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Professional Services Impacts

Understanding Part 2: What else should we know?

Social and economic benefits from the procurement of diverse suppliers.

An organization’s investment in small, minority-owned, veteran-owned, women-owned, service-disabled, and/or HUBZone suppliers and social enterprises.

Environmental impacts associated with the service provider’s facility.

• electricity use.• water consumption• impacts of building services • waste management.

Social impacts of the service provider’s workforce and organizational practices

• Health, safety and well-being of employees• Workforce diversity• Employee training and development • Employee engagement and satisfaction• Ethical behavior and compliance

Service provider’s supply chain impacts of ongoing purchasing.

• Embedded electricity. • Purchase of products (e.g., furniture, IT products, office supplies,

microwaves, etc.).

Service provider’s local community and economic investment.

• Sponsoring employee volunteering. • Pro bono or in-kind service• Philanthropic donations• Community

Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Purchasing RecommendationsAction and Results: What makes a difference?

Make organizational investments allowing for potential reduction in service provider travel.

For example, investing in high quality video and teleconferencing services will greatly enhance the ability to reduce the need for contractor travel. Work with potential and current service providers to invest in similar and compatible equipment to ensure this investment will improve the environmental, social, and economic impacts associated with contractor travel.

Design contract to incorporate a travel policy preferring the lowest environmental impact possible.

Incorporate considerations for local and long-distance travel, as well we overnight trips. *Consider this an opportunity to test improvements to the organization’s current travel policy for employees!*

Minimize impacts of service deliverables.

Look for providers who have the understanding of and capacity for how to provide the necessary deliverables with the least environmental, social, and economic impact possible.

Determine consistent screening criteria for service providers and encourage proliferation of that information in the market.

Seek out existing supplier analysis tools that address the organization’s preferred screening criteria and encourage potential service providers to report data into those data repositories.

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ChallengesThe following challenges exist when attempting to improve the environmental, social, and economic impact of professional services purchasing:

• Variations in significant impacts of service providers.• Lack of consistent scoring criteria for suppliers • Determining appropriate and consistent leadership criteria for

service providers across sectors• Service providers’ ability to claim the benefits of employee actions• Addressing emerging standards

Agenda

1. Context


2. Key Terms







Alameda County

3. Q&A + Discussion

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Emissions By Scope Type and Category

Supply Chain GHG Inventory Meta-AnalysisDraft Results; 3/10/15Funded by StopWaste

Emissions By Organization Type and Purchasing Category


Professional Services Types Contributing to GHG Impacts for Public Agencies


Research Question: Are there certain types of professional services that contribute to more to public agency climate impacts?

• Engineering and Architecture

• Employment Services • Management Consulting• Community Programs

(for public agencies only)

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Next Steps: Learning from Others

Alameda County is leading research to learn from other leading public agencies on the effectiveness of current efforts to procure more sustainable professional services.

Research Question: What are the most effective strategies in public agency contracting that reduce impacts of the service provider, both in contract delivery and overall climate impact of the service provider’s operations?

• Share results with the forthcoming Climate Friendly Purchasing toolkit, a project of the West Coast Climate Forum

• Incorporate learnings into Strategy Cycle for Alameda County

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Questions

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Education Sessions Schedule

All sessions take place from 11:00-12:30pm ET.

February 24: Creating a Sustainable Purchasing Program

March 5: Running a Sustainable Purchasing Program (Part 1 of 3) – Understanding and Launching Strategy Cycles

March 10: Running a Sustainable Purchasing Program (Part 2 of 3) – Spend Analysis

March 12: Running a Sustainable Purchasing Program (Part 3 of 3) – Planning Strategies, Implementing & Reporting

March 17: Professional Services

March 19: IT Hardware and Services

March 24: Transportation

March 26: Paper

April 1: Cleaning and Sanitizing Chemicals for Facilities Care

April 8: Landscaping and Grounds Maintenance

April 15: Electricity

April 22: Food

April 29: Construction and Renovation

May 6: Furnishings










www.sustainablepurchasing.org/summit

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Summit workshops will feature Guidance-based training, case study

presentations, and peer-to-peer dialogue.

guidance for leadership in sustainable purchasing chapter 4: purchasing category guidance...

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