Sustainable procurement (also known as responsible/green procurement,
environmentally preferable purchasing or sustainable/responsible
purchasing) is the process by which environmental, social and ethical
considerations are taken into account when making a purchasing decision.
Contrary to the traditional parameters of price, quality, functionality and availability, sustainable procurement involves selecting products and services that have a positive, reduced effect on human health, the environment and society when compared to contending items that serve the same purpose.
One of the principles of responsible procurement is life-cycle costing. It is a procedure that establishes the total costs of purchasing a product or service, from “cradle to grave”, by asking questions relating to each stage of its total life cycle.
It considers the following:
Cost savings
When looking at items through their whole life span, products that are more expensive initially can produce savings when they are assessed throughout their life cycle. Potential procurement cost savings can be created through reduced consumption, longer term pay-back periods or by obtaining more efficient and durable products.
Reputation
Selecting sustainable goods and services from responsible suppliers will enhance the company reputation, increase customer loyalty and attract new customers. Association with a supplier with a poor environmental, social and ethical record can pose a significant reputational risk to a business.
Improved access to capital
Institutional investors and lenders are increasingly looking to a company’s social, environmental and governance performance. Hotels that practise responsible procurement are more likely to benefit from easier access to capital.
Tax breaks and credits
Businesses can take advantage of government financial incentives for investing energy-saving equipment. Many municipalities in Japan offer subsidies, including low-interest finance, for purchases of energy-efficient appliances while the US state of Pennsylvania offers small businesses energy-efficient grants for equipment that notably improves a company’s energy efficiency. In the UK, the Carbon Trust’s Enhance Capital Allowances scheme allows businesses to claim 100% first-year capital allowances on investments of qualifying energy-efficient equipment, from boilers to lighting and refrigeration systems.
Contrary to the traditional parameters of price, quality, functionality and availability, sustainable procurement involves selecting products and services that have a positive, reduced effect on human health, the environment and society when compared to contending items that serve the same purpose.
One of the principles of responsible procurement is life-cycle costing. It is a procedure that establishes the total costs of purchasing a product or service, from “cradle to grave”, by asking questions relating to each stage of its total life cycle.
It considers the following:
- is the purchase necessary at all;
- what products are made of;
- under what conditions they have been made;
- where do the product originate from;
- their packaging components;
- how they will be used; and
- how they will be disposed of.
In general, hospitality procurement companies should be considering life
cycle costs when making conclusions about what they acquire, whether buying
food for their restaurants, furniture for the property, amenities for the
spa or outsourcing laundry services. By doing so they will also be
helping to influence suppliers’ and consumers’ behaviour.
Benefits about sustainable procurement
Today, a property with a sustainable procurement policy will enjoy significant commercial, environmental and social benefits:
Cost savings
When looking at items through their whole life span, products that are more expensive initially can produce savings when they are assessed throughout their life cycle. Potential procurement cost savings can be created through reduced consumption, longer term pay-back periods or by obtaining more efficient and durable products.
Reputation
Selecting sustainable goods and services from responsible suppliers will enhance the company reputation, increase customer loyalty and attract new customers. Association with a supplier with a poor environmental, social and ethical record can pose a significant reputational risk to a business.
Improved access to capital
Institutional investors and lenders are increasingly looking to a company’s social, environmental and governance performance. Hotels that practise responsible procurement are more likely to benefit from easier access to capital.
Tax breaks and credits
Businesses can take advantage of government financial incentives for investing energy-saving equipment. Many municipalities in Japan offer subsidies, including low-interest finance, for purchases of energy-efficient appliances while the US state of Pennsylvania offers small businesses energy-efficient grants for equipment that notably improves a company’s energy efficiency. In the UK, the Carbon Trust’s Enhance Capital Allowances scheme allows businesses to claim 100% first-year capital allowances on investments of qualifying energy-efficient equipment, from boilers to lighting and refrigeration systems.
Promotes
innovation
It encourages suppliers to invest in developing sustainable products, technologies and processes.
It encourages suppliers to invest in developing sustainable products, technologies and processes.
Good
for staff engagement
By showing a genuine commitment to environmental and social issues, responsible procurement can play a contributing factor in attracting and retaining hotel staff as well as creating more highly motivated and productive employees.
By showing a genuine commitment to environmental and social issues, responsible procurement can play a contributing factor in attracting and retaining hotel staff as well as creating more highly motivated and productive employees.
Environmental
benefits
With key customers demanding sustainability improvements, suppliers can be encouraged to make their manufacturing processes and products environmentally friendly in terms of sourcing “green” raw materials, using less packaging, designing the products to be more energy efficient and consume less water, etc. To achieve this, hotels are active in engaging their suppliers so they know and understand their specific objectives.
With key customers demanding sustainability improvements, suppliers can be encouraged to make their manufacturing processes and products environmentally friendly in terms of sourcing “green” raw materials, using less packaging, designing the products to be more energy efficient and consume less water, etc. To achieve this, hotels are active in engaging their suppliers so they know and understand their specific objectives.
Social
benefits & local sourcing
Making decisions beyond the traditional economic parameters is a way of incorporating appropriate safeguards and checks to avoid abuses and inadvertent infringements on key social issues, such as labour and human rights and health and safety. By requiring more goods and services that are locally sourced, hotels can also support local job creation and other economic opportunities and build a strong relationship with the community.
Making decisions beyond the traditional economic parameters is a way of incorporating appropriate safeguards and checks to avoid abuses and inadvertent infringements on key social issues, such as labour and human rights and health and safety. By requiring more goods and services that are locally sourced, hotels can also support local job creation and other economic opportunities and build a strong relationship with the community.
About Hospro
HOSPRO|Hospitality Procurement prides itself on being a bit different.
Traditional values are sustained and a good reputation is something to
be proud of. Good business is building lasting relationships, helping us
to grow our assets together. With a background in international
hospitality and procurement services for some 30 years, our combination
of market knowledge and expertise ensures the best possible service for
our business relations. We support our clienteles with specific
recommendations and references to stay focused on the total process.
(Source: Greenhotelier.org)
(Source: Greenhotelier.org)
