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Thursday, July 31, 2014

New Group Aims for Sustainability in Procurement and Supply

Last week, I reported the imminent launch of the Sustainable Purchasing Leadership Council (SPLC), the Washington, D.C.-based group whose objectives include developing guidelines and benchmarks for sustainable procurement practices, as well as programs that recognize achievements in this area.

SPLC has scheduled a webinar on July 23, at 1 p.m. ET, as a launch event. (Registration for the webinar is at www.purchasingcouncil.org.) A founding summit is planned for Aug. 27 and 28, at the National Academy of Science in Washington, D.C., to discuss goals.

Credit: patpitchaya at FreeDigitalPhotos.net

Credit: patpitchaya at FreeDigitalPhotos.net

Interviews with an SPLC officer and a representative of a founding company bring the organization’s goals into focus. The SPLC may be the first group of its kind in procurement. If successful in developing criteria for sustainable purchasing, it would give companies, nonprofits, government agencies, and others an objective and credible means of qualifying the environmental, financial, and social effects of purchasing decisions throughout supply chains.

As such, it could lead to approved procedures and certificates that companies would use to assure their business partners and others that they are sourcing products and suppliers responsibly.

There are about 20 founding members. These include universities, cities (Washington, D.C., and San Francisco), states (California and Minnesota), nonprofits, and businesses — among them FedEx, Office Depot, and SciQuest.

The SPLC actually dates back to January 2012, when the Green Products Roundtable (GPR) started the group. The GPR is part of the Keystone Center, which develops stakeholder-based solutions to issues affecting energy, the environment, and health, says Sam Hummel, SPLC’s outreach director.

“The idea for an organization like SPLC has been around for at least a decade,” Hummel remarks. “It was part of an effort by government, higher education, vendors, suppliers, and manufacturers to address shared problems of eco-labels and a lack of clarity as to which were credible.”

Faced with the need for eco-friendly purchasing practices, procurement managers have found it difficult to assess sustainability claims, especially in long supply chains. Hence the development of SPLC, which Hummel says will allow procurement managers to “hack through the eco-label jungle” by providing “targeted, strategic, and cost-effective guidance on sustainable purchasing.”

GPR ran a pilot program with the Association for the Advancement of Sustainability in Higher Education that focused on development of guidelines and benchmarks. Results were positive, and GPR moved into the launch phase, hiring Hummel and an executive director, Jason Pearson.

A major goal of SPLC is to “dramatically simplify the process of managing and mitigating sustainable purchasing,” Hummel explains. SPLC will also recognize leadership in this area by citing companies for outstanding efforts and results.

An example of how the group might evolve is the U.S. Green Building Council (USGBC), which Hummel cites as a model for SPLC. Founded in 1993, the USGBC developed a green building lifecycle rating system, guidelines, and certificates — most notably the Leadership in Energy & Environmental Design (LEED) certification. They are voluntary, but architects and others use them to certify the environmental design and energy efficiency of homes and buildings.

“The building trades affect the environment,” Hummel says. “And it’s the same with procurement. So many transactions go through procurement that its role must be empowered and enabled when it comes to sustainability.”

He adds that chief procurement officers are enthusiastic about SPLC, which will be run by procurement professionals. “They want to identify risks and do so in ways that are cost-effective and consistent with their companies’ best practices.”

One SPLC founding member is SciQuest Inc., of Cary, N.C., a cloud-based spend-management company. Brian Daniels, vice president of spend analysis, says that part of SPLC’s focus will be identifying sustainable financial and social practices as well as environmental.

This means assuring that the operations and business practices of contractors throughout supply chains do not harm workers or are hazards to local communities. Also, the SPLC wants to ensure that they don’t reflect badly on purchasers doing business with them.

“There is a connection between sustainability and procurement,” Daniels remarks. “It’s not just manufacturing, it’s who we do business with.”

Purchasers typically evaluate their immediate suppliers, but there is a need to look further down supply chains. “Companies that embrace procurement as a strategic function get this, and see the impact on supply relationships,” he says.

 

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