Ethical Purchasing

December 9, 2009 In Ethical Purchasing, Ethical Supply Chain Management, Out and About, Reeve News

Ethical & sustainable purchasing around the dinner table

What happens when you bring some of the leading policy makers and practitioners in ethical and sustainable purchasing together over dinner? Lively and informative discussion on maintaining VANOC’s Ethical and Sustainable Purchasing (ESP) momentum, the influence of larger contracts vs. smaller ones, concerns of audit fatigue, as well as the importance of supplier engagement and looking inward at your own practices were all subjects discussed in a recent congregation of Vancouver-based thought leaders.

On November 30th Reeve Consulting hosted an Ethical and Sustainable Purchasing dinner with the goal of facilitating conversation between some of Vancouver’s movers and shakers and exploring the opportunities and challenges facing the ESP movement.

The wide range of guests included:
• Kai Alderson, Fasken Martineau
• Rory Carr, RC Products
• Harvey Chan, Mountain Equipment Co-op
• Daryl Doyle, SAP
• Councilor Geoff Meggs, City of Vancouver
• Monica Netupsky, VANOC licensing
• Melorin Pouladian, Lululemon
• Denise Taschereau , Fairware
• Tim Reeve, Reeve Consulting
• Kevin McCarty, Reeve Consulting
• Amanda Mungal, Reeve Consulting

Over dinner, the desire to ensure the momentum created by VANOC is maintained post-Vancouver 2010 was discussed. Small licensees, in particular, have been able to leverage the VANOC license to encourage factory compliance and there is concern that the once the Olympics is over the influence small companies have on their supply chains will dwindle.

Common challenges raised by purchasers were both lack of buying power relative to overall factory production and audit fatigue on behalf of factory owners. Rory stated that he heard reports of one factory that had to conduct nearly one audit a week to keep up with the demands of factory compliance. Harvey suggested one possibility for addressing audit fatigue is to place more emphasis on direct engagement with suppliers and less emphasis on using a particular audit. If a factory has passed a standard audit then accepting those results while directly engaging the factory owner may bring about a more fruitful outcome. These comments lead into deep conversation on ways to share factory audit information without losing competitive edge and better ways to directly engage suppliers.

Monica and Denise both suggested that educating consumers needs to be a high priority in furthering the ESP momentum fueled by VANOC. Rory suggested that combining this with some kind of positive recognition for companies that practice ESP rather than negative recognition might help consumers make more informed choices. Often consumers are made aware of the companies they shouldn’t buy from rather than the good ones they should buy from.

Melorin and Daryl recognized the significant opportunity for large companies to move beyond “greening” their retail product by “greening” their operations. Denise agreed, stating that in her work she often finds that “green” companies have put so many resources into their retail product that they have none left for internal operations and often turn to her when they realize their promotional items are in direct contrast to their own retail product.

Also, there was a good discussion of how purchasing organizations can contribute to human rights violations by putting unreasonable demands on their suppliers. For example, when a large order is needed immediately, then it may be that employees are required to work longer days that are in violation with international labour conventions. It was agreed that it is important for purchasing organizations to recognize their influence on factory labour conditions in order to help their suppliers comply with international labour standards.

The dinner wound down with everyone feeling energized and more connected. The Reeve Team really enjoyed hearing what our industry colleagues had to say and looks forward to another opportunity to continue these discussions.

June 15, 2009 In Ethical Purchasing

The Responsible Purchasing Network Releases their Annual Report: Responsible Purchasing Trends 2009

The Responsible Purchasing Network (RPN) recently published their annual Responsible Purchasing Trends 2009 report. This report summarizes socially responsible and environmentally sustainable purchasing practices and trends in 2008.

The RPN’s membership of 211 procurement and sustainability professionals was surveyed and 135 responded. Respondents included government agencies, educational institutions, non-profit organizations, religious congregations and corporations. Ninety-five percent of the respondents were from the United States and the remaining five percent were from Canada, Italy, Mexico and Spain.

It is interesting to note that the RPN’s membership more than doubled in 2008, and as result, responsible purchasing is on the rise! From January 2008 to January 2009 their membership grew from 97 to 211 members. Of the $53 billion dollars that is collectively spent annually by the 135 respondents, it is estimated that $4 – 10 billion of this was spent on socially and environmentally preferable goods and services in 2008.

Key Findings of the Responsible Purchasing Trends 2009 Report

The key findings of this survey are summarized in the Executive Summary of this report as follows:

Responsible Purchasing Policy & Criteria
Two out of three respondents have a responsible purchasing policy and two thirds of the rest say they expect to adopt one. Social and environmental concerns (e.g. energy efficiency, recycled content) are considered by many to be nearly as important as conventional procurement considerations such as cost, quality and supply.

Responsible Purchasing in Practice
The majority of respondents say they “actually consider” social and environmental criteria in most of their purchasing. Sustainability standards and certifications (e.g. eco-labels) are widely recognized and used. Many respondents report actually considering social or environmental issues even when they do not have a policy that specifically requires it.

New Members Bring Great Potential
While all but 11 respondents to the 2008 survey already had a formal or informal responsible purchasing policy, 43 of the 2009 respondents reported lacking such a policy – though 28 of those plan to adopt one. This show there is great potential to shift far more spending in a responsible direction.

Measuring & Reporting Impact
Respondents report minimal use of calculators that measure social, environmental or cost benefits related to their responsible purchasing. Similarly, fewer than one in four claim to publish an annual report summarizing their responsible purchasing activities.

Forecasting Future Trends & Opportunities
Nearly all respondents expect to do more responsible purchasing in the next two years. Factors they claim would increase their responsible purchasing include: more competitive pricing and better selection of responsible goods and services, and more training and education in responsible purchasing.

How Does this Compare to our Trend Research?

Reeve Consulting continuously conducts best practices and trends research related to responsible purchasing. The key findings of the RPN Responsible Purchasing Trends 2009 report are very similar to what we are identifying in our research. We agree that responsible purchasing is a rapidly growing trend and has moved to the forefront for many organizations as a strategy to help improve operational efficiency and reduce environmental impacts.

As stated in the RPN report, sustainability standards and certifications (e.g. eco-labels) are widely recognized and used. We have found that many organizations are using eco-logos to overcome the common challenge of identifying “green” products and services. This has lead to a boom in the development of eco-labels across North America, which is presenting a new layer of complexity. With the rapid influx of eco-labels in the marketplace, many purchasers are finding it difficult to sort through them all and identify the more trustworthy labels.

We have also discovered there is significant demand for more training and education in relation to responsible purchasing. Many purchasers would like a formal, accredited training program they could turn to in order to gain the knowledge they need to advance responsible purchasing within their organizations.

The RPN trends report is an important contribution to the field of responsible purchasing and Reeve looks forward to seeing how these trends advance overtime. By identifying and monitoring trends we can better understand how to support and advance responsible purchasing. For example, we see Reeve playing an important role in helping to meet the current demand that exists for training and education across North America.

Download this report:
www.ResponsiblePurchasing.org

April 14, 2009 In Ethical Purchasing, Olympics

LOCOG’s Sustainable Procurement Code ofConduct: An Emerging Trend in the Olympic Games

Firms who wish to do business with the London 2012 Organizing Committee (LOCOG http://www.london-2012.co.uk/) will have to meet relatively strict performance standards as outlined in its ‘Sustainable Procurement Code of Conduct’.

Similar to Vancouver 2010’s ground breaking ‘Supplier Code of Conduct for Social and Environmental Compliance,’ LOCOG has set requirements based on the following 4 principles:

Responsible sourcing
Use of secondary materials
Minimising embodied impacts
Healthy materials

Under each of these principles, the Code lays out preferences related to sustainable product specifications. Examples include requesting that a given product hold a third party eco-certification (see http://ecolabelling.org/).

The Code will be used by internal buyers as well as prospective suppliers and licensees to guide the procurement process in a way that will help to ensure the sustainability of the 2012 Games and set precedence for future games.

The initial priority categories on which the Code will focus include:

branded products;
products sourced from overseas, and;
labour providers

Procurement’s approach to sustainable sourcing will be based on the following questions:

1. Where does it come from?

2. Who made it?

3. What is it made of?

4. What is it wrapped in?

5. What will happen to it after the Games?

The answers to these questions will help the organizing committee determine how it will source specific products and sources. A trend is emerging in the Olympic Games in terms of sustainable purchasing and it will be interesting to see if other Olympic organizing committees will integrate similar questions into their approach to sustainable sourcing.

Related to verification of compliance to the Code, no specific action will be required on the part of suppliers and licensees beyond reading and understanding the Code. However, once a contract has been awarded, LOCOG may use various methods to ensure practices are aligned with the requirements of the tendering process. Methods may include using ‘Supplier Ethical Data Exchange’ (https://www.sedex.org.uk) to disclose supply chain information as well as independent audits.

Thanks in large part to the work at VANOC, sustainable procurement has become an embedded component of the Games’ overall sustainability strategy. The LOCOG Code has definitely built upon this good work. VANOC, however, requires all
of its Licensees to be audited on a regular basis. LOCOG’s approach to verification seems somewhat less stringent. Reeve
Consulting will be interested to see how this all plays out and how it will influence other Olympic organizing committees in years to come.

For more information and to review the LOCOG Code, please go to:
http://www.london2012.com/news/archive/2008-11/london-2012-publishes-sustainable-sourcing-code.php

For moreinformation and to review the VANOC Code, please go to:http://www.vancouver2010.com/dl/00/55/84/-/55842/prop=data/3o3aaq/55842.pdf

April 6, 2009 In Ethical Purchasing, Out and About

Reeve Consulting ‘Out and About’: World Conference on Sport and the Environment

On March 30^th Reeve Consulting attended the World Conference on Sport and Environment which is organized every two years by the International Olympic Committee and the United Nations Environment Programme. The conference is designed to encourage strong social responsibility and reduce the impacts that sports events can have on the environment, particularly the Olympics.

This year the theme of the conference was ‘Innovation and Inspiration: Harnessing the Power of Sport for Change’. Reeve would like to note a few interesting points from the delegates of the conference:

Thomas Van Dyck, Senior Vice President – Financial Consultant, Senior Consulting Group RBC Wealth Management – SRI Wealth Management Group, USA delivered a compelling opening plenary presentation speaking to the critical importance of ethical and sustainable purchasing as a market mechanism to scale up a green and sustainability oriented economy.

Ann Duffy, Corporate Sustainability Officer, Vancouver 2010, and David Stubbs, Head of Environment and Sustainable Development, London Organising Committee of the Olympic Games and Paralympic Games (LOCOG 2012) highlighted how purchasing is a central tenant of their overall strategies to advance zero waste, carbon neutral commitments and other sustainability priorities. Reeve worked closely with Vancouver 2010 on the development of their Buy Smart program and was happy to see this program being profiled in Ann’s presentation.

Hon. Gordon Campbell, Premier of the Province of British Columbia, was impressive as he highlighted the importance of investing in a green economy and that we need to act now on the issue of climate change. He painted an optimistic vision of how we can capitalize on investments in green technologies and infrastructure to build a stronger and more productive economy in BC and beyond. Reeve Consulting shares this vision and it’s great to hear the premier of BC showing leadership on an international platform.

The conference was a great opportunity to network with likeminded firms, organizations and individuals. A couple of our observations from the conference include:

sport management professionals and other major event representatives at the conference are clearly hungry for details on sustainable purchasing
many we spoke with were looking for more tangible examples of actual program implementation / challenges and success
many sessions were struggling to get started and finished on time as there was a thirst for networking and folks were keen to continue conversations outside of the sessions
some question periods were quite limited, which in some cases, stifled some potentially interesting discussions
hopefully day two will begin really start to unpeel the implementation onion and move from discussion of plans and management systems to actual results

March 30, 2009 In Ethical Purchasing, Out and About, Sustainable Products

Reeve ‘Out and About’: The Sustainable Sport and Event Toolkit Workshop

Reeve participated this past Sunday, March 29th, in the Sustainable Sport and Event Toolkit (SSET) Workshop organized by the Vancouver Organizing Committee for the 2010 Winter Olympic and Paralympic Games (VANOC) and the International Academy of Sport Science and Technology (AISTS) as a pre-conference activity to the 8^th World Conference on Sport and the Environment in Vancouver.

As a legacy of the 2010 Games, VANOC has been working with AISTS, the International Olympic Committee and other global sport organizations to create an easy-to-use web-based toolkit designed to help sport event organizers manage their footprint. This workshop was organized to provide understanding of the toolkit’s resources and website, and listen to first-hand stories from athletes and sport organizations currently involved in testing the toolkit.

The toolkit has eight chapters that will guide the user in creating sustainable sport and event strategies. Chapter 5 focuses on how to involve the community and engage in Ethical and Sustainable Purchasing to support sustainable sport event commitments. An innovative feature of the toolkit is the web-based SSET Wiki, which is an interactive platform that allows users of the toolkit to login and share best practices, ideas, statistics, stories and general comments and feedback. The SSET Wiki also provides resources and tools that are linked directly to goals and objectives in the toolkit.

The workshop presented a wealth of information on how Ethical and Sustainable Purchasing can be leveraged by sports organizations to meet their overall sustainability commitments. For example, VANOC shared some success stories of their Buy Smart Program, which was designed, with support from Reeve Consulting, to ensure that sustainability, ethical choices and Aboriginal participation are taken into account within procurement and licensing activities. London 2012, Speed Skating Canada, and the International Cycling Union also recognized the role of Ethical and Sustainable Purchasing in achieving sustainability objectives of sporting events.

Reeve sees the SSET as an important step in ensuring the sustainability of future large-scale games and is excited to support the enhancement of this tool through the interactive wiki web platform. The SSET will help to embed Ethical and Sustainable Purchasing in future games and Reeve Consulting looks forward to participating in the application of this innovative toolkit.

March 6, 2008 In Ethical Purchasing, Olympics

Stakeholders Key to Ethical Purchasing Policy for Global Games

The recent negative publicity around Beijing 2008’s licensed merchandise is evidence that issues of Ethical and Sustainable Purchasing is on the rise as a key strategic issue in the Olympic movement. Organising and bid committees are waking up to this reality and, as a result, are making strong commitments to ethical and sustainable purchasing.

Setting goals related to sustainability is an increasing norm among Organising and Bid Committees. Procurement is seen as a leverage point through which such goals can be realized, and damaging PR issues can be avoided. The wider Olympic family, such as Olympic sponsors as well as both the International and National Olympic Committees, are also seeing the importance of sustainable procurement to their strategy and PR programs.

Vancouver 2010’s has made and continues to make considerable efforts through setting a new benchmark in ethical and sustainable purchasing within the Olympic movement. London 2012 is monitoring these initiatives and also intending to meet its sustainability goals, in part, through procurement. A recent article in the Financial Times cites Mayor Ken Livingstone as committing to hold its Olympic suppliers to ethical criteria. The Tokyo 2016 Bid Committee has also included a commitment to sustainable procurement in its bid.

Another positive trend that is emerging is organising committees and their stakeholders are taking a collaborative approach to these initiatives. This is evidenced through the increased dialogue between NGO stakeholders and the various committees. VANOC has engaged its stakeholders throughout the development of its Buy Smart program. London is continually engaged with its stakeholders on everything from developing its sustainability plan to venue construction to procurement.

The Olympic movement is moving into new territory as it strives to align with the greater community’s expectations around and commitment to sustainability and ethical and sustainable procurement will serve to raise the level of play. Furthermore, those efforts that are based on collaborative approaches and stakeholder engagement will only ensure greater success.

For more information on VANOC’s sustainability initiatives, please go to: http://www.vancouver2010.com/en/Sustainability

For more information on London 2012, please go to: http://www.london2012.com/plans/sustainability/index.php

The recent article in the Financial Times can be found at: http://www.ft.com/cms/s/0/bb32aa56-d82d-11dc-98f7-0000779fd2ac.html

February 6, 2008 In Ethical Purchasing, Sustainable Products

Do You Really Know What You Are Buying? The Perils of GreenWashing…

Although many organisations recognize ethical and sustainable purchasing as a key strategic issue, barriers to action still exist. One example is a lack of awareness or understanding what constitutes an ethically or environmentally preferable product or ‘green’ product. Many products can claim to be “all natural”, “environmentally friendly” or even “fair trade”, but without certification to back these claims, it is difficult to know what, exactly, you are buying. A recent report from Terra Choice Marketing, “The Six Sins of Greenwashing” highlight six specific, and not so uncommon practices, of companies providing misleading product information:

1) The Sin of the Hidden Trade-off

This sin is characterised by using one environmental attribute to suggest that a product is “green”. The report cites that often claims are made based on a narrow set of green criteria and do not necessarily take into account a complete environmental analysis that looks at a product’s full lifecycle. A case in point is a recent article (see below) from Queens Journal on a “carbon-positive” wine company. Plantatree wine promises to plant a conifer sapling for every bottle sold in an attempt to offset the CO₂ emitted from an average Canadian. While a laudable initiative, the article points out that it may be more beneficial to offset the emissions caused from the production process for making the wine itself.

2) The Sin of No Proof

Pretty self-explanatory, ‘the sin of no proof’ occurs when product make unsubstantiated claims about their green attributes. Products sometimes make claims to be energy-efficient or not tested on animals, to name a few examples, but provide no backup information or certification as proof.

3) Sin of Irrelevance

Products will sometimes promote themselves as being distinctively green when in reality, they are acting in compliance with local laws and regulations. Terra Choice uses “CFCs” as an example. These substances have been legally banned for 30 years, therefore all products are CFC-free. Those touting themselves as such are misleading the public into believing they are in some way more progressive than they really are.

4) Sin of Vagueness

The sin of vagueness is characterized by claims that are ambiguous or meaningless. One common example is products that print the Mobius loop (recycling symbol) without a qualifying statement that tells consumer exactly what, and how much, of the product is made from recycled content.

5) Sin of Lesser of Two Evils

Organic cigarettes or environmentally preferable herbicides are examples of products guilty of ‘the sin of lesser of two evils’. Although such products may indeed offer favourable environmental attributes, the products, themselves, pose greater negative impact to the environment and human health.

6) Sin of Fibbing

Again, this is pretty self-explanatory. Simply put, some products will lie outright about their environmental qualifications. Although this is least common among the sins, it can occur. How do you avoid these sinful products? The recommended approach is to first look for eco certifications standardized by bodies that issue guidelines for making environmental claims. As an example, ISO 14024 sets guidelines or standards for third party Eco-labelling organizations to follow and ensures that environmental information is presented accurately. Furthermore, the report suggests that consumers remain aware of the six sins and attempt to evaluate products accordingly.

Although this report focused on greenwashing, the same may occur with ethical claims as well. Therefore, look for fair trade certifications for added assurance these products meet the standards you expect.