Market News

 March 16, 2007
The Business Case for Sustainability Purchasing

 Vancouver, Canada (GLOBE-Net) - The BC-based Sustainability Purchasing Network's "Guide to the Business Case and Benefits of Sustainability Purchasing," provides an analysis of the financial, management, environmental & socio-economic benefits of sustainability purchasing for business owners and purchasing managers.

Sustainability purchasing is a management process used to acquire goods and services ("products") in a way that gives preference to suppliers that generate positive social and environmental outcomes. Sustainable purchasing favours suppliers that integrate sustainability considerations into product selection so that impacts on society and the environment are minimized throughout the full life cycle of the product. Sustainability purchasing entails looking at what products are made of, where they have come from, who has made them, how they will be ultimately disposed -- even considering whether the purchase needs to be made at all.

Organizations practice sustainability purchasing in order to: align their values with their purchasing decisions; improve product and service quality; increase resource productivity; reduce risk; enhance financial performance and competitiveness; and foster a sustainability marketplace -- that is, to create incentives in the marketplace that help sustainability-oriented suppliers increase their business opportunities.

Organizations that adopt sustainability purchasing programs can realize financial, managerial, environmental and socio-economic benefits. Details of each are provided in the Guide along with examples of success stories.

For example, The University of British Columbia retrofitted old lighting systems with energy efficient lighting in a number of campus buildings and installed heat recovery systems in two classrooms. These initiatives saved the university $2.2 million CDN annually in reduced energy costs.

Wal-Mart found it could save $2.4 million USD a year in shipping costs by eliminating excessive packaging on Kid Connection, their private-label line of toys, not to mention 3,800 trees and one million barrels of oil. Many other organizations have also benefited from sustainable purchasing decisions.

The Guide was produced to help organizations understand the triple bottom line benefits (financial, social and environmental) and costs of sustainability purchasing. As with any new business decision, cost-benefit information can help support decision-making at the board, executive, departmental and end-user levels. The information in the Guide can help those along the entire continuum of sustainability purchasing -- from organizations who are just starting out in the process, to those with comprehensive policies and programs in place, and those in-between.

In the report, the Network outlines the business case benefits and costs for sustainability purchasing and identifies important process considerations that impact the business case, such as the cost of designing and managing a sustainability purchasing program and the benefits of using "total cost of ownership" or life cycle assessment processes in purchasing.

As the Network indicates, sustainability purchasing is a component of corporate responsibility. Organizations committed to reducing their negative environmental and social impacts and to improving social conditions typically adopt sustainability purchasing programs to extend these values into the supply chain. Thus, it is worthwhile to consider the business case benefits of CSR in order to better understand the context of the sustainable purchasing business case.

The Guide can be downloaded here.

The Sustainability Purchasing Network is a learning resource for corporate, not-for-profit, academic, government, public sector, labour, and co-operative organizations in their sustainability purchasing efforts.

The Network is advised by a multi-stakeholder Steering Committee comprised of representatives from the following local organizations: BC Hydro, Bell Canada, Business Alliance for Local Living Economies (BALLE BC), City of Vancouver, Fraser Basin Council, The Greater Vancouver Regional District, Hemlock Printers Ltd., Mills Basics, Public Works and Government Services Canada, and Vancity Credit Union.