Sourcing Green Suppliers

29/11/2010

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Organisations are becoming increasingly more aware of their environmental responsibilities, not only in terms of regulatory requirements, but because of moral obligation too. However, as great as decreasing your organisation’s own environmental impact is, have you considered your supply chain?


Introduction

A functioning ‘Green Supply Chain’ has environmental consideration for all aspects; from material sourcing, to product design, manufacture, distribution, delivery and end-of-life disposal. By establishing your own Green Supply Chain, it enables your organisation to gain access to key markets, differentiate yourselves from the competition, improve your products, processes and quality, as well as reduce environmental risks and costs.

Business benefits

From a consumer point of view, there is a greater demand for environmentally friendly, ethically sourced products and services. As well as this need directly from consumers, client organisations may exert similar pressures. Going green has never made more sense.

By boasting environmental credentials, your organisation can use this as selling point. If you are in a market where a product or service you provide is difficult to differentiate from your competitors, going green can be that difference. By going further than simply having an environmental policy, it can put you in the driving seat for many public sector tenders where sustainable practice is seen as a major bonus.

Establishing your commitment to being green can protect your organisation from the effects of any future environmental legislation. It also makes your organisation more attractive to investors and lenders, because you are deemed lower risk.

By working with like-minded green suppliers, they are in a position to offer you up-to-date advice on the latest efficient technology and equipment, saving you money and reducing your environmental impact. Even better news is that the Carbon Trust offers SMEs interest free loans for energy efficient equipment. Likewise, there are many Local Authority grants available for a similar purpose.

Carbon Trust Loans

Green Supply Chain examples

An example of a Green Supply Chain is IBM’s ‘Smarter Planet’ initiative. Any changes to supply chain of their size will improve efficiency and reduce environmental impact on a large scale. The domino effect of enforcing requirements throughout a Green Supply Chain will help partners become greener, more efficient and improve their contribution to their communities.

IBM’s ‘Smarter Planet’ initiative

FT article on responsible sourcing

ISO 14001 certification

Market research company Mori found that almost 80% of consumers believe companies need to back up their ethical claims with proof. The environmental management standard ISO 14001 is popular because it is recognised worldwide as proof of company reducing its environmental impacts. It’s also often a pre-requisite to join supply chains. A recent study showed that companies certified to the standard are 40% more likely to assess their supplier’s environmental credentials, with 50% likely to require that their suppliers undertake specific environmental practices. Therefore, by choosing ISO 14001 certified suppliers, the longer reaching your eco-friendly ambitions in the supply chain.

Editing your Environmental Policy

If you’re making the effort to source in a more sustainable way by establishing a Green Supply Chain, make sure you update your environmental policy to suit. It is, after all, important to ensure that everyone knows the organisation’s stance when it comes to procurement. Under a Supply Chain sub-heading, examples of what you can include in your policy are:

  • Creation of a ‘Green Questionnaire’ to evaluate potential suppliers
  • Commitment to consider suppliers with green credentials (e.g. awards,¬† schemes or ISO 14001 certification)
  • Commitment to using environmentally friendly printers¬† (recycled paper and eco-friendly inks)
  • Insist cleaning companies use environmentally friendly cleaning products
  • Encourage environmentally friendly communication (e.g. use of email and PDFs instead of invoice letters)