If done right, sustainable purchasing has the potential to reduce unwanted environmental and social impacts on a massive scale. At the same time, it comes with a world of complexity of its own. Evolving impact assessments, internal buy-in, stakeholder relationships and public policies are all conspiring to play into buyers and sellers' decisions. This workshop walks through key principles of sustainable purchasing for anyone looking to stay up-to-date with current practices. It also introduces some of the main challenges and opportunities companies face in responding to and doing sustainable purchasing.

2. Moderator: Anastasia O’Rourke Sustainable Purchasing Leadership
Council @SPLCouncil
Panelists from: Shelton Group, Sustainable Purchasing Leadership
Council
Sustainable Purchasing: Reimagining
Principles and Practices for Mainstream
Adoption
#SB14sd

3. Introducing the
Sustainable Purchasing Leadership Council
Christina Macken
Director of Programs
christina@purchasingcouncil.org
For more information:

4. !4

5. Founders Circle
U.S.
DEPARTMENT
of
AGRICULTURE

6. Strategic Partners
!6

7. What is leadership?

8. Managers do things right.
Leaders do the right thing.

9. Opportunity for strategic leadership
!9
Analysis by TRUTHstudio based on US Bureau of Economic Analysis 2011 Summary Use Annual I-O Table

10. Opportunity: Institutional purchasers shape markets.
!10
$

11. Opportunity: Institutional purchasers shape markets.
!11

12. Opportunity: Institutional purchasers shape markets.
!12
• demand transparency into the upstream and
downstream impacts of goods and services.
• incorporate sustainability criteria into
purchasing decisions at a scale that can shift
markets.
• drive down the cost of sustainable products
and services so that everyone can afford them.
• ensure that end-users understand, like and
adopt new products and services.
Purchasing organizations are uniquely positioned to:

13. Challenge: Lack of coordination.
!13
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14. Challenge: Lack of coordination.
!14

15. Root Challenge
!15
The lack of standardization in
how sustainable purchasing is
defined, guided, measured,
and rewarded.

16. !16
A blue sky idea.

17. !17
Source: Wikimedia Commons (Creative Commons Attribution-Share Alike 2.0 Generic license. Attribution: Simon Johnston)
A big tent.

18. !18
Solution: Build a community of collaboration.

19. !19
Solution: Send coordinated market signals.

20. To support and recognize
purchasing leadership that
accelerates the transition
to a prosperous and
sustainable future.
Mission

21. A collaborative space where a
community of purpose convenes
to define, pursue, and promote
sustainability leadership in
institutional procurement.
Structure

22. !22

23. !23

24. SPLC Programs

25. Environmental Impacts
Increase these…
• biodiversity preservation
• climate adaptation
• resource optimization
• soil health stewardship
Decrease these…
• acidification
• desertification
• eutrophication
• freshwater pollution
• greenhouse gas emissions
• habitat depletion
• human health impacts
• land use change
• marine pollution
• ozone depletion
• radiation pollution
• resource depletion
• smog
• waste
• water consumption

26. Social Impacts
Increase these…
• anti-discrimination
• community engagement
• diversity/equal opportunity
• employee engagement
• equal remuneration
• fair trade
• freedom of association
• grievance & remedy processes
• human rights
• indigenous rights
• occupational health & safety
• right to collective bargaining
• sustainable compensation
• training and education
• worker rights
Decrease these…
• child labor
• forced/compulsory labor
• human trafficking
• sourcing from conflict
zones

27. Economic Impacts
Increase these…
• fair dealings
• innovation research /
investment
• open competition
• transparency of information
• use of diverse suppliers
• use of HUB zones
• use of local suppliers
Decrease these…
• conflicts of interest
• corruption (bribery, extortion…)
• dividing territories
• dumping
• exclusive dealing
• misleading market claims
• monopoly (seller collusion)
• monopsony(buyer collusion)
• patent misuse
• price fixing
• product tying
• refusal to deal

28. Group Exercise
Consider and answer the following questions
in small groups:
!
Which impacts described is your company
addressing and measuring impacts?

29. Group Reflection
!
!
What can SPLC do to better engage your
community and help brands position
yourselves as leaders along ESE impacts?

30. !
!
THANK YOU!
Q&A

31. +
Goals for today
■ Learn about purchasing
■ Key market trends in B2B
■ Identify challenges and opportunities for collaboration
■ Learn about SPLC & other initiatives
■ Make new connections

32. +
Today’s Session
■ Welcome and Introductions
■ Purchasing Briefing: Anastasia O’Rourke
■ Icebreaker Exercise
■ Sustainability is Personal: Suzanne Shelton
■ Exercise: The Role of Branding in Institutional Purchasing
■ Break
■ Suppliers engagement of Purchasers: Anastasia O’Rourke
■ Exercise: Supplier Engagement
■ Introducing the SPLC: Christina Macken
■ Exercise: Prioritizing Impacts
■ Group Reflection: Engaging Brands into SPLC

33. +
The customer is always right:
A briefing on Purchasing and
Procurement
Dr. Anastasia O’Rourke
Chair Elect, Sustainable Purchasing Leadership Council
Sustainable Brands Workshop, June 2 2014

34. Opportunity: US Spending in 2012
2012 US Spending:
Source: Sustainable Purchasing Leadership Council, based on BEA Statistics

35. +
Source: Sustainable Purchasing Leadership Council, based on BEA Statistics

36. +
Health care
Housing
Financial services and insurance
Food services
Transportation services
Recreation services
Education services
Communications services
Personal care services
Hospitality services

39. ± 100 million US jobs
70% of US employment
± 4 billion Mt CO2e
10% of global GHG

40. +
Who exactly is the “buyer”?
■ The owner of the budget: Identifies the need
■ The professional purchaser: Executes the purchase
■ The influencers: Policy makers and others who have a say
■ Operations: Uses/disposes the product or service once delivered
■ Direct Spend
■ Indirect Spend

41. +
Typical Procurement Cycle
Requirem
ents
Developm
ent
Assess
Market
Invite
Supplier
Offers
Select
Supplier
Agree to
Terms
Manage
Contract
Define need

42. +
Common procurement methods
■ Request for Quotation (RFQ)
■ Invitation for Bid (IFB)
■ Multi-Step Competitive Sealed Bid
■ Request for Proposal (RFP)
■ Request for Information (RFI)
■ Sole source contracts
■ Cooperative agreements

43. +
Some recent trends in procurement
■ E-procurement platforms
■ P-cards and de-centralized approaches
■ Group/ Collaborative Purchasing
■ Total cost of ownership/Life Cycle Costing/ Whole of life/ Total value
for money.
■ Spend Analysis
■ Strategic Sourcing
■ Sustainable Purchasing: incorporating sustainability into the
procurement cycle

44. +Interventions
Require
ments
Develop
ment
Assess
Market
Invite
Supplier
Offers
Select
Supplier
Agree to
Terms
Manage
Contract
Define need
Find innovations;
remanufactured/2nd
hand; re-use existing;
servicize; don’t buy
Develop Sustainability
requirements for
products, services and/
or suppliers
Set-Asides
Policies
Targets
Risk Assessment
Spend Analysis
Find alternatives; build
capacity; signal
demand
Clearly communicate
sustainability criteria
& points
Evaluate sustainability
performance
Include measurable
sustainability terms
Assess sustainability
performance, gather
data
Measure &
Communicate Results,
Give Recognition
Report to Goals

45. +
Where is sustainability being emphasized by
national governments?
On-going contract management
0.05
Auditing and improving supplier performance
0.06
Awarding of contracts
0.11
Contract clauses
0.13
Evaluation of bids/proposals
0.13
Technical specifications
0.19
Supplier pre-qualification
0.07
Supplier development/ Pre-contract engagement
0.08
Needs definition
0.15
Other
0.03
Q: In what stages of the procurement cycle is your national government currently emphasizing SPP/GPP considerations?
SOURCE: UNEP 2012: Global Review of Sustainable Public Procurement

46. +
Exercise
1. How is purchasing is organized in your organization?
2. How many tier-1 suppliers would you estimate your organization
has?
3. What do you wish you knew about purchasing?
4. Does your organization do any sustainable purchasing today?

47. +
Engagement Strategies:
Suppliers engaging purchasers

48. +
Final Purchasing Decisions
(Source: UNEP Global Review of Sustainable Public
Purchasing, 2013)
Dominant Awarding Rules: National Governments
Purchasing

49. +
What’s a (sustainable product) to do?
➢ Researched on over 1000 purchasing policies and guidance
documents:
• Some set requirements
• Some set leadership points
• Many on the receiving end suspect that they’re not being
fully implemented
➢ So what to do:
• If you’re ahead of the curve; but your messaging is getting
lost in the mix?
• How to differentiate as a purchaser when you and your
competitors all work with the same suppliers?

50. +
Looking into this further
➢ Recently spoke to 12 large organizations:
• Purchasers: what they see works, what they’d like to see more of
• Suppliers: what strategies they take to differentiate and win
• Both: when and how to successfully engage

51. +
A range of strategies are being taken
➢ Offer innovative solutions that truly solves the customer need
!
➢ Meet price requirements and then differentiate
!
➢ Educate your buyers & your own sales team
!
➢ Improve your marketing, tell your story, explain the benefits, validate
your claims
!
➢ Co-Create, Adopt and Advocate Leadership Standards
!
➢ Partner and Network with credible organizations

52. +
Some nuance to this
➢ Product cycles: length & size of contract changes when/how often you
interact/how close is the relationship
!
➢ Sector sensitivities:
• Some are spending a lot of time answering questions, others virtually
nothing
• Some can rely on ecolabels/others can’t
!
➢ Products/Services: different types of contracts and interaction
!
➢ Large enterprise contracts: trickier, cover many thousands of SKUs Harder
to differentiate here: need to use recognizable symbols

53. +
What’s not really working
➢ Adding to the confusion by making spurious &
undocumented claims
!
➢ Being too focused on the technical detail in
communications, remember: there is a person on the
other end
!
➢ Not answering customer questions on sustainability/
not answering them well
!
➢ Charging a premium that makes it hard for the buyer
to argue for

54. REIMAGINE
REDESIGN
REGENERATE
#SB14sd