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

http://www.apparelcoalition.org/

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


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


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.


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.


“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

[email protected]

mailto:[email protected]


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)


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%


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.


Not all national SPP/GPP policies take the same form


Q: What national policies & regulations currently include provisions for SPP/GPP

(National Government respondents only, each country counted once)


Different agencies are leading & supporting the effort


Q What government institutions are playing a leading or important role in the implementation of SPP/GPP in your country?


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


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


“Priority” environmental & social issues get considered


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?


Implementation is about more than adding specifications

Q: In what stages of the procurement cycle is your national government currently emphasizing SPP/GPP considerations?


There are many perceived obstacles


Q: Which of the following form a barrier to

SPP/GPP in your country?

More expensive

Confusing definitions

Insufficient supply

Quality concerns


Yet growth in SPP/GPP is forecast


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?


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

http://www.purchasingcouncil.org



For your reference

UNEP State of Sustainable Public Procurement 2012 Executive Summary and Full Report:

• www.unep.fr/scp/procurement/docsres/

My contact details:

• [email protected]

• 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

http://www.unep.fr/scp/procurement/docsres/



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


RATING SYSTEM


FRAMEWORK