What Is a Green Procurement Policy? A Guide for Businesses

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GREEN PROCUREMENT POLICY

A green procurement or green purchasing policy (GPP) is put in place to guide businesses when acquiring materials, supplies and services and selecting such products based on their impact on the environment and human health. GPPs can apply to both products bought to run the business internally (Ex. office supplies and equipment) as well as for producing the goods and services of the business itself (Ex. materials used in business products).

Green purchases are those that have a low environmental impact and are more sustainable in terms of the materials they’re made from and the sourcing and manufacturing practices that make them. Green procurement also considers the immediate and future impacts of purchases through their consumption and eventual end-of-life stage. Green procurement policies embody the triple bottom line (TBL), a business framework for improving performance in all three areas – environmental, social, and financial.

GREEN PROCUREMENT BENEFITS

Resource and Operational Efficiency

Buying sustainable products and purchasing from green suppliers and vendors promotes resource efficiency. Often GPPs instruct businesses to purchase products that consume less resources such as energy efficient light bulbs or low-flow faucets. Further, purchasing from a supplier who offers products with eco-friendly packaging or no packaging at all reduces your waste stream. These improvements in efficiency translate into cost savings for your business and resource conservation at large which is a win all the way around.

Having a GPP in place also improves operational efficiency as it provides your team with clear guidance on which green products to look for across all areas of your business. Providing detailed information on your GPP requirements and product standards makes it easy for your business to make credible green purchases quickly and confidently.

Improved Employee Health and Safety

Green procurement also serves your employees health, safety and overall well being. For example, buying certified eco-friendly cleaners to use in your workplace avoids the caustic and often toxic chemicals used in many conventional store-bought products.

The food items you provide in the break room vending machine can also be included in your GPP. Buying locally-made, organic and sustainable food options are usually healthier and can make your employees feel better and be more productive.

Employee Engagement

Launching a GPP will keep employees aware of both the sustainable products and habits they should be using but also the company’s larger sustainability mission. Raising employee awareness of and engagement in green purchasing can help build a green work culture and inspire employees to adopt such practices into their personal lives.

Innovation

Procuring sustainably means evaluating your current products and practices in an innovative way. Sometimes choosing the eco-friendly option for products and suppliers may require you to rethink and redesign the way you operate. These brands are manufacturing their shoes from recycled and biodegradable materials and sourcing sustainably while still achieving the durability and comfort that shoe lovers expect.

As a best practice, invite all ideas to the table from across all levels and departments in your business and be open to new ways of greening your products, practices, and habits. You never know what creative solutions you may come up with.

Green Market Support

Continuing to buy truly eco-friendly products and support other sustainable businesses helps build the green market that is taking hold in economies worldwide. There are more eco-friendly products on the market today than ever before. However, having a GPP in place can help your team choose only the products that meet high standards and certifications thus combatting the rampant greenwashing that exists today.

Mitigated Risks

A GPP can help you adhere to corporate regulations and avoid the risk of malpractice from using harmful products or partnering with unethical providers. You will also maintain public trust and avoid lawsuits and legal action. Such was the case for these chocolate industry giants that now face child labor allegations.

Improved Public Image

Abiding by a green procurement policy looks good in the public sphere in which more customers are preferring businesses that are socially responsible and good environmental stewards. Having a GPP allows you to be transparent with your customers, employees and other stakeholders on the products you buy, the providers you support and your purchasing habits. Launching a GPP is another way to reflect your commitment to sustainability and the well being of communities and the environment.

Increased Profitability

Green procurement can drive higher profits in various ways. Along with the customer attraction and loyalty that comes from having a greener reputation, green purchasing yields cost savings in the form of energy efficiency and reduced waste. While some green products can be more expensive, many are associated with rebate programs such as those offered by ENERGY STAR. As mentioned before, a GPP simplifies the green purchasing process. The time originally spent navigating a market overwhelmed with so many product options can now be used towards other important areas of your business.

GREEN PROCUREMENT IN THE PUBLIC SECTOR

The entities who most notably use green procurement policies reside in the public sector – universities, government agencies, and other public institutions. Many institutional GPPs are built upon larger federal policies. For example, the U.S. Department of Agriculture (USDA) developed their Green Purchasing Affirmative Procurement Program (GPAPP) from legislation such as the Energy Policy Act, the Resource Conservation and Recovery Act, and the Farm Security and Rural Investment Act.

GREEN PROCUREMENT IN THE PRIVATE SECTOR

Establishing and enforcing sustainability standards across the entire private sector can be difficult as the sector includes a vast variety of businesses, non-profits and NGOs. Businesses wanting to develop a GPP can use the Voluntary Sustainability Standards (VSS) concept developed by the U.N. Forum on Sustainability Standards (UNFSS). VSS are stakeholder-derived rules and guidelines for developing and implementing sustainable policies and practices.

The buying of goods and services can account for 50% or more of a company’s expenses. Therefore, the adoption of a GPP alone can have a major impact on your business and its position as a sustainability leader. GPPs can also lead to partnerships that benefit and improve the image of all companies involved. Johnson & Johnson, a multinational holding company, has a sustainable procurement program that promises to not only ensure compliance of social and environmental standards from their suppliers but also dedicate resources to engage with their partners and support them on their journey towards sustainability. As you design your GPP, reflect on your current suppliers and offer to share your sustainable business strategies with them. This could require or inspire them to adopt some of the same policies into their own operations.

WHAT A GREEN PROCUREMENT POLICY SHOULD INCLUDE

Overview

This includes the reasoning behind the new policy and an outline of the goals and strategies it entails. Also include your sustainability mission statement and explain how the policy coincides with the company’s short and long-term sustainability goals. Displaying upper management support for the policy and perhaps personal remarks from these individuals will add to the credibility of your green procurement policy.

Table of Contents

The table of contents should be broken down into easy-to-navigate categories either organized by business area (Ex. Transportation) or green initiative (Ex. Energy efficiency).

Example:

1. 1. 1. Office
      - Paper
      - Electronics
      - Furniture
    2. Cafeteria
      - Food
      - Plates, cups and cutlery
      - Kitchenware
      - Cleaners
      - Cleaning Equipment
    3. Outdoors
      - Lawn care
      - Pesticides and fertilizers
      - Irrigation

Here’s an example of a real green purchasing policy from Babson College in Massachusetts.

Green Procurement Policy Principles

Understand the impact your business purchases have on your community, the environment, and your profits.
Commit to developing a plan of action to address negative externalities and find solutions.
Measure and track GPP progress and its effects at all parts of the value chain.
Be transparent with your stakeholders on the motives, goals, and strategies behind your GPP.

Best Practices

Source locally from credible and certified businesses
Choose certified eco-friendly products made from 100% biodegradable, compostable, or post-consumer content and those that do not include caustic or toxic chemicals. Note: When buying biodegradable products, ensure that there is a facility that can collect these items as biodegradable materials require special processing.
Choose ethical products that support quality working conditions, worker health and safety, and community prosperity. Look for fair trade labels and other ethical certifications.
Avoid plastic products whenever possible as many plastics are non-recyclable and can break down into microplastics that threaten wildlife and human health.
Choose efficient products that conserve natural resources and limit waste.
Think ahead and have a plan for how to manage the disposal of products.

EXECUTIVE SUMMARY

A green procurement policy is a powerful tool for ensuring your business makes purchasing decisions that are environmentally sound and socially responsible. While procurement policies surrounding sustainability have traditionally only existed for public institutions, the private sector is beginning to implement GPPs and address the growing demand for greener businesses.

GPPs bring a wealth of benefits such as resource and operational efficiency, improved employee health and safety, risk mitigation, enhanced company image, and increased profitability. With the combined efforts from the public and private sectors, green procurement can become a normative practice and support the growth of green markets and economies worldwide.

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