Using an Environmentally Responsible Procurement Toolkit
by Chris Duggan and Tim Reeve
For several decades now, “environmental considerations” have been turning up in the weighted or desirable evaluation criteria associated with proposal evaluations. It has not been unusual to see 5% to 10% of a total score based on this aspect of the product or project. Regrettably, it has also not been unusual to see a serious lack of objectivity in determining how these weightings are set and the scores are awarded.
Choosing Among Shades of Green
The days of getting full points just for having an “organizational environmental policy” are over. Purchasers want to better understand environmental sustainability, and how they can factor into the supplier-selection process the environmental impacts of different products or services.
A fairly simple “Environmentally Responsible Procurement Toolkit” is one way that can help purchasers choose more objectively from among competing products and services that all make “green” claims.
The Toolkit is a mechanism that purchasers can use to assess and rate product or service options in a quantitative way, using standardized information that is provided by suppliers. It is based on a Life-Cycle Costing model that assesses the various impacts of products or services during their production, use and disposal.
New Focus on an Old Problem
Economic Life-Cycle Costing (LCC) goes back to the 1950s and 1960s. It’s a method of determining the cumulative total cost of a good or service through all phases of its existence, from inception and production, to practical use, to disposal and investment recovery.
More recently, LCC has been adapted to help account for the environmental impacts associated with the choices we make in buying products and services – this is environmental LCC.
We can use economic and environmental LCC together to better understand – and measure – the balance between financial and sustainability-related procurement considerations.
What Does the Toolkit Measure?
The output of the Toolkit is an overall score and rating of the basic environmental impacts of products and services, as well as the supplier organization that produces them. With this information, purchasers will be able to compare the relative impacts of each supplier’s proposed product or service (as well as the supplier organization itself) with those of all the other suppliers’ proposals.
The Toolkit rates environmental performance over each of three phases of the product or service life cycle: production, use and disposal. Within that, the Toolkit assesses environmental impacts associated with emissions, chemicals and waste.
How Does the Toolkit Work?
The application of the Toolkit consists of four basic steps for the purchaser:
Step 1: Assess and scope the need for a product or service. This is a functional needs assessment that forces the purchaser to think more ‘environmentally’ about the requirement.
Step 2: Identify the environmental categories related to the product or service (i.e., emissions, chemicals or waste) to consider in the evaluation.
Step 3: Identify related environmental questions to include in the tender or RFP documents. These will require responses from the suppliers and provide input data that can be used for comparisons in the next step.
Step 4: Based on those responses, assess the anticipated relative environmental impacts throughout the life cycle of the product or service. This information allows the purchaser to assess environmental impacts in a quantitative way.
How Do Purchasers Use the Results?
Once a purchaser has completed the four steps, it incorporates the results into its proposal evaluation process.
Remember that the Toolkit establishes the relative environmental impacts of product or service choices. So, rather than inserting an absolute score in the evaluation matrix, the purchaser scores each proposal relative to the other proposals. For example, if the purchaser is evaluating multiple proposals, it would give the most points (say, 10 out of 10) to the product or service and supplier organization with the least negative environmental impact.
As long as the purchaser establishes the scoring methodology in its evaluation handbook prior to the start of the evaluation process, it is reasonable to expect that the results will be fairer and more objective than they have been in the past.
Tim Reeve is President of Reeve Consulting and co-founder of Sustainability Purchasing Network (www.buysmartbc.com). He can be reached in Vancouver, B.C. at (604) 763-6829 or email@example.com.
© Chris Duggan is former CEO of NECI and Publisher and Procurement Editor of The Legal Edge.