Impact Sourcing Means Going All In

Funding

In sustainable purchasing, there is often talk of “market readiness” for sustainable products and services. The idea is that sometimes organizations or consumers wish to purchase a more environmentally, ethically, or socially sustainable option, but the market has not yet produced this option, or does not produce it at scale. In these cases, purchasers can leverage their collective power to help influence the market to develop in a sustainable direction, through advocacy, or even direct investment. When it comes to sustainable services, sometimes the commodity that needs developing is the available labour itself.

Help develop a market-ready young person in Uganda

A few weeks ago we posted about a new trend in sustainable procurement and global economic development called impact sourcing. Driven by initiatives from organizations such as the Rockefeller Foundation, “‘Impact sourcing’ is an inclusive employment practice through which companies intentionally connect high-potential, disadvantaged youth to available jobs.” The practice is taking off, with tech giants such as Microsoft beginning to capitalize on a win-win opportunity.

However, the jobs created when companies are practicing impact sourcing are only one half of the equation: these high-potential youth still need the education and training required to successfully perform at their jobs. Impact sourcing requires capacity-building. In order to develop this market of young and promising employees, we must find ways to invest in their education.

The African continent is a place where there is an abundance of high-potential youth who are desperately in need of sustainable employment. In many African countries, such as Uganda, education is prohibitively expensive for much of the population, and youth cannot access loans to defray the costs. As a result, even if jobs appear through impact sourcing employment creation, many prospective applicants would find themselves under-prepared to fill the positions.

So what can be done? Reeve believes in grassroots capacity-building, which is why we are helping to support a young and promising Ugandan student to fulfil her higher education dreams. Please check out Rosemary Nakasiita’s story here, and consider how you too might help push toward market readiness for impact sourcing.

Help Rosemary Nakasiita Get Her University Degree on Indiegogo

Introduction to Sustainable Purchasing Seminar – Nov. 2, Vancouver

Are you interested in sustainable purchasing but not sure where to start? Struggling with developing the business case? Wondering where to focus resources?

Acquire the knowledge and confidence to embrace sustainable purchasing practices in your organization by joining the BuySmart Network, a non-profit organization dedicated to advancing sustainability in BC and beyond, November 2nd for the Introduction to Sustainable Purchasing seminar. This half-day seminar will focus on the fundamentals of sustainable purchasing featuring practical insights and lessons learned from professionals in the field.

Designed for purchasing, sustainability and corporate responsibility staff in public, private and non-profit organizations, seminar topics will include:

  • How to integrate environmental, social and ethical factors in the procurement process
  • Key components of a sustainable purchasing tendering toolkit
  • What’s needed to overcome barriers and recognize the best opportunities for sustainable purchasing in you own organization

Tim Reeve, a Co-Founder of the BuySmart Network and President of Reeve Consulting with Coro Strandberg will lead the session, joined by guest speakers Tracey Husoy, Manager of Purchasing and Risk Management, Metro Vancouver

Event Details

  • When: November 2, 2012, 8:30 am – noon
  • Where: TIDES Canada, Hollyhock Room 304, 163 West Hastings St. Vancouver
  • Cost: $125 + HST
  • Register: www.buysmartintro.eventbrite.ca

Full details of the Introduction to Sustainable Purchasing seminar can be found in the event brochure [PDF].

For more information about the seminar, contact Bob Purdy by email at bpurdy@fraserbasin.bc.caor phone at (604) 488-5355.

 

GoodGuide.com for Sustainable Purchasing Programs

Good Guide

Our clients regularly ask us where they can find a list of green products or sustainable suppliers. While there is no silver-bullet-one-stop shopping list for ethical and sustainable options, there are an increasing number of online tools to help buyers evaluate the environmental and social attributes of products.

While these tools are user-friendly and convenient (often accessible from mobile devices) they’re only useful if they draw from credible data.

Recently at Reeve Consulting we’ve been investigating GoodGuide.com, an online database of information on the health, environmental and social impacts of over 100,000 consumer products.

While the GoodGuide is mainly targeted to consumer audiences, we see some value in this tool for corporate purchasers, and even more so for staff at large in organizations with a sustainable purchasing policy.

Where we see this tool could be particularly useful is for staff making smaller, un-tendered purchases. For example, an administrative employee buying office or cleaning supplies may find it useful to compare attributes of one product to another to determine which is greener or healthier.

What is the GoodGuide?
GoodGuide is an online platform that allows user’s to search specific products to find a rating based on health, environment and society measures attributed to the product or manufacturer. An overall rating for each product is provided, and user’s can drill down for specifics on health and sustainability features by clicking on a rating for more details.

Screen shot of Dawn ultra-concentrated dish soap on GoodGuide.com

Ratings are based on a scale of 1 to 10. A score of 10 means the product rates very well relative to other products in a category or other companies in an industrial sector.

Similar to the EnerGuide label on appliances, GoodGuide doesn’t approve or certify products as meeting specific sustainability standards, it only provides information that can be used to compare one product to another.

Highlights of the GoodGuide
A major strength of the GoodGuide is that it’s easy to use. Primarily, directed at the consumer market, with a mission to help consumers make purchasing decisions that reflect their preferences and values, the tool has been set-up with a user-friendly interface and colour-coded rating system. There’s also a GoodGuide’s smart phone app, which allows one to access the full product database from the shopping aisle by simply scanning product barcodes.

Mobile barcode look-up; Flickr / Lauren C.

Another benefit purchasers will find with GoodGuide is that it covers many more products than those qualifying for ecolabels. At the same time, if a searched product does feature an ecolabel, this information is shared in GoodGuide’s product description.

Regarding the data behind the ratings, GoodGuide conducts regular stakeholder consultation and relies on third-party experts to develop and continuously improve their rating and metrics system. Their executive team and advisors are leading academics in product lifecycle analysis and other related fields, which brings some added credibility to the tool. Further, GoodGuide clearly outlines their data quality control procedures and acknowledge where there are gaps in data and value judgments.

B CorporationAs an organization, GoodGuide is certified as a “for Benefit” Corporation by BCorporation, a recognized body which provides third-party verification of GoodGuide’s sustainability and transparency performance. It requires that GoodGuide meet a comprehensive set of transparent social and environmental performance standards. As a result, GoodGuide has made their metrics and ratings system publicly available, which provides legitimacy to their rating system for products.

Areas for consideration
Recognizing that the GoodGuide is a relatively new tool, we’re impressed by the large number of products that have been rated to date and the level of information we’re able to access. As the GoodGuide continues to develop, there are a couple areas where we feel the tool could be strengthened.

From early use with the tool we found that the transparency of raw data behind the ratings could be improved. While it appears you can take an extra step to contact GoodGuide and request detailed data for a given product, we’d prefer that the data be easily accessible, in real-time, while using the tool online.

Another area where we feel there’s some room for improvement is in GoodGuide’s social ratings. Currently the tool appears to take corporate social responsibility (CSR) performance for companies and apply it at the product-level. For example, a company’s support of local community groups could be recorded as a social impact of a product produced by that company, even if the two aren’t directly related.

We believe this approach could be improved, and that presenting the social impact of a product requires a look at the social impacts of the given product’s supply chain. We encourage GoodGuide to develop social supply chain criteria (similar to the Fair Trade model) rather than apply general company CSR performance to individual products.

No replacement for ecolabels, but a useful tool
Overall, companies and organizations with a sustainable purchasing program will find GoodGuide useful for initial product research and informing less formal purchasing decisions.

While use of the GoodGuide can’t replace consideration of ecolabel certifications for mandatory product specifications, it may facilitate initial product research and help engage more staff by making daily sustainable purchasing decisions easier.

Let us know in the comments section below if you’ve had a chance to use the GoodGuide. If so, what has your experience been? Where did you find it useful? What do you feel could be improved?

Cotton Supply Chain: organic & fair trade sustainability in the global market

2010 was a record-breaking year for cotton prices in global markets. In this post, Reeve Consulting presents an overview of recent market activity, considers the implications for working and environmental conditions in the supply chain and takes a look at how organic and fair-trade cotton sectors are fairing. We finish with a few suggestions for corporate and governmental purchasers looking to reduce brand risk and improve ethical and sustainable purchasing practices when it comes to cotton goods.


Flickr / kimberlykv

Cotton is the largest non-food crop in the world with over 24.3 million tonnes consumed worldwide annually. Did you know it’s also the largest employer? From farm workers to retail employees, an estimated 1 billion people are involved in the growing, processing and selling stages.

Given the ubiquity of cotton, it’s significant that 2010 was an unprecedented year for the commodity in global markets. The price doubled in a year and broke the $1 (U.S.) per pound level for the first time in 15 years.

Globe and Mail / Bloomberg

Rising prices affects the entire supply chain

A number of factors have been attributed to the sudden price increase, a main one being poor weather conditions in top growing regions, including floods in Pakistan, a severe cold snap in China, crop-killing hailstorms in Texas and, more recently, flooding in Australia. Speculation has played a significant role, as well as export restrictions put in place by India (the second-largest cotton producer) to protect domestic supplies and prices.

Consequently, the clothing sector is feeling the squeeze of both increasing input costs and a weak consumer environment. According to media reports, the prices of jeans, t-shirts and other cotton apparel will likely increase 2 – 15% in 2011.

Clean Clothes Campaign

To avoid passing a price hike to consumers, clothing companies may reduce costs by mixing in less expensive, synthetic fibers or by decreasing pack sizes on smaller bulk products like socks. Of greater concern is that companies will move production to lower wage countries with lower duty tariffs and weaker environmental restrictions. As examples, consider how garment workers demanding a fair minimum wage are currently being treated in Cambodia and Bangladesh. Anticipating such tactics, the Ethical Trade Initiative released a statement in late-September urging retail buyers to factor in the cost of a living wage for workers in their price negotiations with garment suppliers.

Organic cotton prices are linked to conventional cotton prices

A recent edition of Engage, an e-newsletter published by the Organic Exchange, takes a close look at the organic cotton industry. The opening article suggests the extraordinary times experienced by conventional cotton have on the one hand created a beneficial seller’s market. At the same time these conditions have had a potentially damaging impact on the sector by leveling the price of organic and conventional cotton. As the Organic Exchange (OE) puts it:

“Farmers are seeing their carefully tended organic harvest end up in conventional supply chains. Organic cotton procurers are struggling to meet their usual premium commitments (which don’t make sense anymore) and on top of this the lag time for organic buyers to respond to the market is adding a further complication.”

The article concludes that if organic cotton is to be secure in a stable, appropriate value chain it needs protection from the dramatically changing commodity price. This could come in the form of working partnerships that deliver benefit to farmers as well as buyers.

This concept is further covered in a recent article in the World of Organic Agriculture – Statistics and Emerging Trends 2010 journal:

“The sector must address the protection of the farm and fiber business model to ensure farmers and those who work with them receive sufficient returns to maintain investment in farmer development and productivity.”

Protection from the commodity market rollercoaster

A number of programs have attempted to protect cotton from market conditions. Perhaps the best known is the fair trade movement.  We’ve written a number of posts on the Reeve Consulting blog about the new garment certification program unveiled in 2010 by Fair Trade USA. For the first time the full supply chain of a product, not just the agricultural inputs, can receive fair trade certification ensuring workers are paid a fair, living wage for their goods and services. While only a handful of brands have completed the certification process, recent reports indicate more companies are working with Fair Trade USA to acquire certification.

Flickr / kimberlykv

Another example can be found in the recent commitment by Anvil Knitwear to double the production of organic cotton in the U.S. Through the Texas Organic Cotton Marketing Cooperative, Anvil will pay a premium for organic cotton as well as purchase any cotton making a transition to organic at a price close to the premium. The hope is that having a guaranteed buyer will encourage conventional cotton farmers to switch to organic production.

Social Alterations, an online education lab for socially responsible fashion design, has also focused on this issue and recently shared a post outlining approaches undertaken by two other global commodities – coffee and cocoa – that have similarly attempted to address the volatility of global commodity prices.

Purchasing cotton responsibly: ethical and sustainable purchasing considerations

When it comes buying cotton goods, purchasing departments can reduce risk and improve supply chain practices by considering the following:

  • Making a formal commitment to specify and support sustainable forms of cotton in purchasing decisions (e.g. organic, fair trade, ethically sourced)
  • Considering the origins of cotton goods including. More specifically, the working and environmental conditions under which they were made
  • Investing in long-term relationships with suppliers and focusing on continued improvement

To learn more about how our clients and organizations are benefitting from these and other sustainable supply chain practices contact us.

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.