An Introduction to Green Purchasing and Public Procurement

1. An Introduction to Green Purchasing and Public Procurement

2. Green Purchasing

3. What is “Green Purchasing”? Quality Cost Delivery ＋ Environment Balancing Q C D and E ＝ Green purchasing

4. Cope with Environmental Problems Focusing on “Input”: Green Purchasing Make the input green Reduce the output Reduce input Non-hazardous material Easy-to-recycle Energy saving Resource saving Waste Pollution Hazardous substances Carbon Dioxide Recycledmaterial Recycling

5. Green Purchasing • a.k.a “affirmative procurement” • Considering the quality, price and the environment • A way of purchasing which gives preference as far as practicable to those products & services which cause least harm to the environment • The purchase of items made with recovered materials. It encompasses environmentally preferable purchasing i.e. the purchase of products which are least harmful to the environment & human health • Taking into considerations of the quality, price & environment, the purchase of a product or service with the least environmental impact

6. Green Purchasing Environmental issues to consider: • Packaging • Recycled contents • Low energy • Longer life • Locally produced • Low pollution

7. Principles of Green Purchasing • Principle 1 – Consider whether a product is needed before purchasing it or not. • Principle 2 – Purchase a product considering the various environmental impacts over its life cycle - from extraction of raw materials to disposal. • Principle 3 – Select suppliers who make a conscious efforts to care for the environment. • Principle 4 – Collect environmental information on products and suppliers.

8. Complete the Circle of Recycling Use of recycled products Designing recyclable products Proactive sales of recycled products Green purchasing purchase of recycled products Discharge after sorting/collection →easily recyclable

9. Target fields of Green Purchasing Motorcar Hotel & Meeting Printing Office Supply Paper Products Services Distribution PC Printer Cleaning Parts and Materials Furniture Work wear Electricity Energy Banking Canteen Catering Food Construction Lighting Electric Appliance

10. PURCHASING CRITERIA

11. PURCHASING CRITERIA (2) • Green Purchasing Policies and Product Specifications • Include environmental considerations as a factor • Product Life Cycle • Emphasis on eliminating or reducing potential risks to health and environment

12. PURCHASING CRITERIA (3) • Comparison of Environmental Impact • Environmental impact to be given due consideration • Environmental Performance Information • Manufacturers and distributors to provide comprehensive, accurate and meaningful information for purchasing consideration

13. Greening Supply Chains

14. EMERGING CONCEPT OF GREEN SUPPLY CHAIN (GSC) • GSC screens suppliers for environmental performance, work with them on green design initiatives and provide training & information to build suppliers' environmental management capacity • GSC strengthens & builds greater support with suppliers for environmental initiatives • GSC – buyer requiring certain level of environmental responsibility in the business practice

15. LIFE CYCLE OF PRODUCT Product Design Pre-Manufacturing Manufacture Packaging for Distribution Use/Reuse & Maintenance Disposal Transportation

16. LIFE CYCLE OF PRODUCT (2) • There are emissions and consumptions of resources at every stage of product life • Life Cycle Assessment (LCA) – process used to evaluate the environmental impact at every stage of production of a product or service • Final goal: purchase products with the minimal negative environmental impacts

17. What is a ‘Green’ Product? A ‘Green’ Product: • Can be recycled • Have a recycled content • Be energy efficient • Emission reducing • Re-usable • Biodegradable • Organic

18. A TYPICAL SUPPLY CHAIN Coordinated system to move product from supplier to customer SUPPLIERS (Raw materials) MANUFACTURERS (Finished product) CONSUMERS DISTRIBUTORS RETAILERS

19. Greening Supply Chain & Green Purchasing Raw material supplier Eco-Products Eco-Material EMS Green Purchasing /Procurement Parts supplier Products Manufacturer End user To be competitive in the global market, all the businesses “must” enhance green manufacturing.

20. GSC and the 5 Rs • Reduce • Reuse (Replace) • Recycle • Refuse (Reject, Return) • Repair (Refine)

21. SUPPLIER AWARENESS AND TRAINING • Buyer can use purchasing power to create demand & this demand will in turn push supplier to produce a green product • This could spur manufacturer to • Use ‘green’ materials • Design for the environment and use the resources with efficiency

22. ISSUES IN GREEN SUPPLY CHAIN • Financial Cost • Smaller suppliers have financial constraint and may not devote the necessary resources • Essential for consumer to consider overall benefits • Awareness amongst consumers • Liabilities and Responsibilities • Supplier must comply to the laws and regulations • Example: Computer manufacturer increase offerings to meet the Green Star standard for energy efficiency

23. ISSUES IN GREEN SUPPLY CHAIN(2) • Documentation • To meet environmental criteria, consumer can demand supplier to meet standards in operation and practise • Formal environmental management system (EMS) or other certification such as International Organisation for Standardisation (ISO) to validate supplier’s compliance

24. ISSUES IN GREEN SUPPLY CHAIN(3) • Transparency versus Confidentiality • Supplier should be transparent in providing information for customer’s decision making • However, lack of protection for innovation & intellectual property challenge the confidentiality of the information

25. ISSUES IN GREEN SUPPLY CHAIN(4) • Cooperation and Long-Term Business Relationships • Supplier’s effort in addressing the environmental issue can result in: • Cost reduction for consumer • Greater operational efficiency • Enhanced value for consumer • Advantage of cooperation between supplier and consumer: • Strengthen customer-supplier relationship • Shared savings and benefits

26. Green Purchasing changes a corporation Encouraging environmentally conscious management and product development through the market Eco-design Green Purchasing Consumer Corporation Green market Green Product Governments and corporations are large scaled-consumer Environmentally conscious management Establish a sustainable society GPN

27. Green Public Procurement

28. Green Public Procurement • Europe: • Public purchasing: 1 trillion EURO/year • Over 14% of GDP • US: • Federal government spends $500 billion/year • State/local governments spends $400 billion/year • Japan: • National government spending: \14 trillion/year • Local governments spending: \44 trillion/year • Totally 17.6% of GDP • UN: $3 billion/year–value of business opportunities linked to UN direct/indirect spending: $30 billion

29. EU Green Purchasing Activities • Commission Interpretative Communication (2001) on the Community law applicable to public procurement and the possibilities for integrating environmental considerations into public procurement • New Public Procurement Directives (March 2004) • clarify possibilities for integrating environmental considerations at different stages of a public procurement procedure • Handbook on Environmental Public Procurement: Buying green! (August 2004) • Methodology and and best practice examples • General legal principles; • Transparency, Non-discrimination, Link with subject matter of contract, mutual recognition of equivalent products /specifications/production methods/labels

30. EU Green Purchasing Activities -2 • European Green Procurement Database • Covers more than 100 product and service groups • Provides key environmental aspects, and existing Eco-labels for the product groups • http://europa.eu.int/comm/environment/green_purchasing/cfm/fo/greenpurchasing/ • Status on green public procurement in EU; • Percentage of administrations that include environmental criteria for more than 50 % of their purchases (study in 2003) • Average in EU: 19% • Sweden: 50%, Denmark: 40%, Germany: 30%, Austria: 28%, UK: 23%

31. US-EPA Green Purchasing Activities • Energy Star program (1992) • Comprehensive Procurement Guidelines (1995) • Promote purchasing recycled products • CPG Supplier Database • Farm Bill (2004) • Encourage purchase of bio-based products • Environmentally Preferable Purchasing(EPP) program • Based on “Executive Order 13101” (1998) which requires all the procurement officials to give preference to environmentally preferable products and services • EPP Database: Cover 53 products and service groups and link to various information sources • contract language, specifications, and policies • Environmental standards and guidelines • vendor lists of product brands • Product focused EPP Guides, web-based training guide, Case studies, Pilot projects, role model of EPA

32. JAPAN Green Purchasing Activities • Green Purchasing Network (GPN) • Founded in 1996 • 2,800 members (2,200 companies, 300 governments, 300 NGOs) • 15 Purchasing Guidelines, Product DB(12,000 products registered), Hotel DB, Award, Training/Seminar, etc. • Government - Green Purchasing Law • Action Plan for Greening Government Operations (1994) • Green Purchasing Law enacted in 2000 • All the national institutions must draw up annual purchasing policy, implement, and report results. • 201 items are designated with criteria • Eco Mark Program • Since 1989 by Japan Environment Association (JEA) • 5,000 certified products within 45 categories

33. Green Public Procurement in Japan Action Plan for Greening Government Operations (1994) - Encourage all national administrations to buy greener products Green Purchasing Law (2000) • Enacted as one of six laws for establishing a recycling-based society • Oblige all the national ministries/agencies to draw up green procurement policy annually, to practice it, and to report the result to Environmental Minister. • Oblige local authorities to endeavor to draw up annual policy and to practice it.

34. Concerns about Environmental Issues in Japan No concerns Having stronger concerns than ever Having less concerns than ever １１％ １２％ ４％ Having concerns recently (not having concerns before) Having concerns as ever ３０％ ４２％ Year ２００２

35. Do You Prefer to Buy Eco-Products? Not motivated by environmental aspects Buying only eco-products ６％ １％ Taking into account environmental aspect to some extent as well as other aspects Preferring eco-products as much as possible ４３％ ５１％ Year ２００1

36. Green Purchasing in Business Sector Already implemented No plan 18% 57% 25% Consider to introduce 2,524 respondents (large sized companies) Survey by MoE Japan in 2005

37. Green Public Procurement • All the central government ministries practice green purchasing • 100% the 47 prefectural governments and 12 designated cities are engaged in green purchasing • 68% of 700 cities systematically implement green purchasing • Particularly advanced areas : papers, office supplies, office furniture, OA & IT equipments, motorcars, uniforms, and electric appliances Survey by MoE Japan in 2005

38. Products Areas Japanese GPP Findings from survey by GPN in 2002

39. Market Impact of Green Purchasing Sales of lower emission and fuel efficient vehicles rapidly increased after enforcement of Green Purchasing Law ☆☆☆ (U-LEV) ☆☆ (LEV) ☆ (T-LEV) FY2000 Second half FY2001 First half FY2001 Second half FY2002 First half FY2002 Second half Surveyed by MoE, Japan

40. Eco-Products Exhibition in Tokyo More than 400 companies, Exceeds 120,000 visitors

41. Green Purchasing Network • Founded in February 1996 to promote green purchasing in Japan by the initiative of the Environment Agency • The mission of GPN • to promote the concept and practices of green purchasing • to provide guidelines and information necessary for practicing green purchasing. • Since then GPN has taken a leading role in promoting green purchasing in Japan.

42. More About GPN • Independent non-profit organization • 2,860 members (Jan. 2006) • 2,261 corporations • 317 governments • 282 NGOs, NPOs • Executive Committee • 39 members Business Government NGO One of the largest environmental organizations in Japan

43. Activities of GPN • Conferences, Seminars, Exhibitions • “Green Purchasing Award” • Training Course • Case study on success stories • Newsletter, Website • Promotion pamphlet, posters • Regional Networks • Annual Surveys • Principles of Green Purchasing • Purchasing Guidelines • Products Database • Hotel Database • Information Plaza

44. Green Purchasing Guidelines for 15 Products and Service Areas Products • Printing and Copying Paper • Copiers, Printers, Facsimiles • Personal Computers • Stationery and Office Supplies • Office Furniture • Motor Vehicles • Refrigerators • Washing Machines • TV Sets • Air Conditioners • Toilet and Tissue Paper • Lighting Equipment • Uniforms and Work Wear Services • Offset Printing Service • Hotels and Inns Suppliers Evaluation Checklist

45. GPN Purchasing Guidelines Personal Computers 1) Minimal power consumption during operation and standby mode (fulfilling requirements for “low energy consumption rate” as stipulated in the Law Concerning the Rational Use of Energy, and the International Energy Star program) 2) Capacity for upgrading and expanding functions in order to make long-term use feasible, and full maintenance service provided by the manufacturer 3) Designed to facilitate recycling and re-use of component parts 4) The manufacturer promotes the re-use of its own product after initial sale and usage, and endeavors to increase the recycling ratio of materials that cannot be re-used 5) Made with a large amount of recycled material 6) Does not contain lead, mercury, cadmium, hexavalent chromium compounds, or specific bromine-based flame-retardants (PBB, PBDE), to the utmost extent possible 7) When packaged with an in-house user manual, the manual is made and printed with consideration for the environment [Information Requirements] Use of PVCs (for the chassis of the PC, display, and keyboard)

46. GPN Products and Service Database GPN Database 13 products area where purchasing guidelines exist Green Purchasing Information Plaza Various products and services not listed in GPN database Eco-Challenge Hotel Database

47. About GPN Database Product Environmental Performance Database • More than 12,000 products registered • About 600 companies participating • 300,000 page-views monthly • Currently Japanese language only Product Categories • Printing and Copying Paper • Copiers, Printers, Facsimiles • Personal Computers • Stationery and Office Supplies • Office Furniture • Motor Vehicles • Refrigerators • Washing Machines • TV Sets • Air Conditioners • Toilet and Tissue Paper • Lighting Equipment • Uniforms and Work Wear

48. Thank you!