The strain that industrial production has put upon the environment, has initiated a growing public concern. This has given rise to what we now call green sourcing.
Green Procurement requires contracting companies, authorities or entities take environmental issues into account when tendering for goods or services. That is, procurement of products that have the lowest and safest impact on the environment and humans in terms of natural resources The goal is to reduce the impact of the procurement on human health and the environment. Basic examples include:
- energy efficient buildings
- environmentally friendly public transport
- recyclable paper
- organic food in canteens
- electric cars
- office equipment made of environmentally sustainable timber
- electricity stemming from renewable energy sources
- air conditioning systems complying with state-of-the-art environmental solutions
- energy efficient computers
In this context, there are some factors to consider when evaluating suppliers for environmental performance:
- What are the supplier’s environmental values and commitments? How are they stated, measured, and enforced?
- How does the company express its environmental values or commitment to employees, customers, and others?
- Does the supplier have an environmental management system?
- Who is accountable for environmental performance — environmental staff only or all employees?
- Is the company in compliance with all applicable federal, state, and local environmental laws?
- How willing is the supplier to understand and work to meet your company’s environmental specifications?
- What efforts has the supplier undertaken to design products with the environment in mind?
- What efforts have been made to efficiently use resources, materials, and energy, as well as recycle and prevent pollution, in the production and distribution of products?
- Does the supplier do anything to reclaim its products or packaging at the end of their useful lives, or encourage customers to recycle or reuse products?
Benefits from Green Purchasing
- Cost avoidance – e.g. Reduced spending towards pollution prevention, hazardous waste management etc.
- Easier compliance with environmental regulations
- Reduced liability and lower health, safety costs
- Improved worker and community health
- Improved brand, image and goodwill – positive media coverage etc.
Major companies, at their manufacturing locations have green sourcing policies and framework to ensure that their supply chain is also green.
All the major OEM’s are forced to look into their supply chains by their consumers due to the environmental exploitation by their procurement counterparts in Asian economies like china. Many companies like Nike have severed relationships with Asian companies which are not up to the standards in environmental regulations.
Green sourcing is the order of the day as consumer awareness has increased and preference towards more environment friendly products or green products have increased.
Going green means different things for different industries – the Chemical Industry focuses on ‘green chemistry’ which is a philosophy encouraging the design of products and processes that reduce or eliminate the use of hazardous substances.
Recently major electronics companies have been a target of environmental protection organizations.
Current Trends in Green Products and Green Sourcing
Many organizations start in a smaller way to make themselves green. The following is the observed sequence.
- Green Office equipment and stationary procurement.
- Increasing Energy efficiency
- Reducing carbon emissions and other emissions in non-core processes.
- Reduced use of packaging materials and recycling packaging materials.
- Use of reusable and non-disposable packaging materials.
Few organizations look into the core processes to reduce the impact of carbon emissions. These organizations reap the benefits of a new market – Green products.
Future Trends
As explained, some industries and companies such as the electronics companies are forced by the consumers to use green materials to make the core products.
But the green awareness has to go beyond the organizations to have a complete impact on the environment. The only way to do this is Green procurement. I.e. the OEM’s implementing sourcing policies that could enable their suppliers and the players throughout the supply chain to implement policies to make their suppliers implement higher energy efficient technologies, reduce overall emissions and use materials that are environment friendly and reduce the amount of waste that would be produced after the product’s life cycle.
