Sustainable Procurement (3)

How to implement your Responsible Procurement Policy

 

1. Create a responsible procurement policy
You will need a simple, clear policy statement easily understood by employees and suppliers alike  that explains your vision and objectives. Make sure it supports the property's overall sustainability objectives.
For example, you may list your criteria when considering potential suppliers from form of delivery and packaging to a supplier’s energy and water consumption initiatives and its recycling policy at the end of a product’s life.

2. Putting it into effect

• Make a list of all the products and services that your hotel purchases from outside the establishment—from agency staff to detergents, electricity to appliances, furniture to office equipment—and prioritise which areas you could be buying more sustainably. You could use your main corporate social responsibility (CSR) commitments as your guide: if your hotel is trying to reduce CO2 emissions, target those procurements that can help you achieve these goals (e.g. energy-efficient appliances, renewable energy).

• Identify the people and resources accountable for the implementation of your policy. You will need to allocate responsibilities for everything from updating standards to providing support material to coordinating supplier and staff training and evaluating suppliers’ performance over time.

• Invite key suppliers, staff and a wide base of stakeholders, perhaps local authorities responsible for waste disposal, to participate in the policy and planning stages. It will enhance your policy’s applicability, legitimacy and efficacy.

• Translate your sustainable procurement expectations into a clear set of guidelines or a Supplier Code of Conduct, setting out your minimum expectations with a requirement that suppliers confirm that they are in compliance. This may cover your expectations of suppliers on everything from labour and human rights to environmental protection and the conduct of its subcontractors and suppliers. Explain the policy and what you are aiming to achieve face to face with your suppliers and arrange briefing sessions and workshops.

• Set yourself measurable goals. As part of its sustainable procurement policy, an Indian Hotel Group sets its properties targets that include ensuring that 75% of each of its hotels’ purchasing on "ongoing consumables" (products with a low cost per unit that are regularly used and replaced, including paper, toner cartridges, folders and batteries) should contain the following: at least 10% post-consumer and/or 20% post-industrial material; at least 50% materials harvested or extracted and processed should be within 500 miles of the establishment; and at least 50% paper products and wood should be Forest Stewardship Council (FSC)-certified.

• Integrate your sustainability criteria into your purchasing and contracting procedures. Contract clauses can be used to include environmental or social considerations; for example, the requirement that goods be delivered outside peak traffic times or that suppliers take back packaging that comes with the product.

3. Selecting your products and services
Be clear with suppliers about the information you require about their goods and services in your request for proposal (RFP) or tender. You can choose to use a pre-qualification questionnaire (PPQ) to check your suppliers’ credentials before shortlisting interested suppliers.
You might want to consider the following:

• What are the impacts of the product or service you plan to purchase at the various stages of its life cycle?
• Does the supplier have its own environmental or social objectives and criteria, such as becoming a signatory of any Ethical Trading Initiative? Does it set environmental and social criteria for its suppliers/subcontractors?
• Are they compliant with environmental and social legislation?
• Does the supplier use a certified environmental management system (EMS), such as ISO 14001, to assess and monitor its environmental impacts and maintain legal compliance?
• Collect both qualitative data (e.g. via simple yes/no questionnaires) and quantitative data (on waste generation, energy consumption, etc). Then you can evaluate the information you have collected and determine which of the suppliers is performing well in relation to your standards.
• Keeping track of the real costs: areas to consider at various stages of a product or service’s life cycle

Raw materials

• Do any of the raw materials involve environmentally sensitive issues?
• If so, have appropriate measures been taken to minimise environmental problems?
• Do they damage the local environment when they are extracted?
• Does extraction require a high energy input?
• Are long distances involved in transporting raw materials or inefficient modes
• Method of transport of materials involved? (e.g. road or air versus train)
• Does the product contain any recycled or post-consumer waste?
• Were any exploitative practices such as child labour or poor rights/safety for workers involved?

Manufacture

• Does the manufacturer have an environmental policy and programme in place?
• Does the manufacturing process involve high energy input?
• Is current, energy-efficient equipment in use?
• If waste is produced, have efforts been made to reduce it?
• If the generation of liquid effluent is involved, is the supplier working to reduce this?
• Are solvents, glues, chemicals, varnishes, paints or other finishes (e.g. chrome) used that are toxic or pollute the air?
• Are any heavy metals released during manufacture?
• If refrigerants (e.g. CFCs, HCFCs, HCs) are used, are they the least environmentally damaging?
• Is waste or effluent recovered for re-use in the process or for recycling?
• Are any exploitative practices such as child labour or poor rights/safety for workers involved?
• Does the manufacturer offset the carbon emissions created during production?
• Does the product carry an ecolabel or other guarantee that it has been responsibly produced?

Transport and delivery

• Will the product have to travel a long distance from the manufacturer/supplier to the property?
• Is the most efficient mode of transport being used over this distance?
• Are any hazards created during transport?
• Have efforts been made to minimise packaging?
• Will the supplier collect used packaging to re-use/recycle?

Use

• Does the product have a good energy efficiency rating?
• Does it minimise water consumption?
• Does it have a negative effect on indoor air quality?
• Will replacement parts have to travel a long distance?
• Will it give long service before it needs replacing?

End of life

• Does the product pose a threat to the environment at the end of its useful life?
• Are there any special requirements for safe disposal that you doubt can be properly met?
• Can you re-use all, most, or some of the material or components?
• Can you recycle all, most, or some of the material or components?
• Is it possible to return the product to the supplier for recycling or reuse?

4. Engaging with and helping your suppliers
Agree realistic targets or key performance indicators (KPIs) with suppliers to help you evaluate suppliers. Evaluate suppliers’ progress with respect to targets and inform them as to whether expectations are being met. There should be clear and structured action plans for non-compliance; use "probation periods" to allow suppliers time to address issues and implement plans of action. Hospro also makes regular site visits to key suppliers to ensure compliance with its code of conduct and that procedures work in reality, as well as using face-to-face meetings to communicate relevant social and environmental concerns with suppliers.
Engage with underperforming suppliers to help them improve their sustainability performance via workshops and/or forums on key issues, such as water and waste management or energy efficiency, or by face-to-face meetings to discuss how improvements can be made. If it is done well, it can result in product, service and process innovations that will benefit both partners.
To maintain momentum and support for your programme, acknowledge sustainability improvements by suppliers. For example:

• Introduce supplier recognition and reward programmes;
• Make the best performers your preferred choice when contracting;
• Offer them long-term contracts;
• Organise special events to showcase your best performing suppliers.

5. Monitoring progress
You should monitor your suppliers’ performance against the various indicators agreed, including KPIs, paper evidence of supplier claims, third-party verification, or via an external audit. Meet up regularly with suppliers to assess progress and anticipate potential problems, and encourage and communicate feedback to and from suppliers. Finally, report on the progress of your sustainable procurement policy. If you are doing this publicly through a sustainability report or within your annual report, remember to communicate the result to your suppliers first.

The hospitality industry constantly yearns for innovation, with each hotel brand and independent operator seeking ways in which they can differentiate themselves to gain their own unique space in a very crowded marketplace. However, 'out of the box' thinking must always be balanced with economic pragmatism. Ultimately, hotels, as a real estate asset class, are challenging. Any investment risk must be justified by the requisite financial rewards.

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)

Sustainable Procurement (2)

Following up on last week's blog where I wrote about the benefits, this time we'll have a look at the Principles of Sustainable Procurement.

There are some basic criteria to consider:

Quality

Always opt for the highest quality you can afford, whether for FF&E, OS&E, OE, uniforms or other goods; have them maintained at a regular basis or repaired when necessary. In general this is more cost effective than replacement and certainly reduces the use of materials and waste.

Energy efficiency

Choose "responsible/green" lighting, heating and air-conditioning and other appliances, which may cost a bit more initially but will produce savings in the long term due to lower operating costs.

Hazardous materials

Avoid products containing toxic substances. Today there are plenty alternatives to opt for non-harmful products, including non-toxic, water-based, hypoallergenic and biodegradable cleaning products, zero VOC paints and chemical-free amenities.

Natural and organic

Whenever possible, choose (local) certified organic food & drink products and linen/cotton fabrics.

Recycled or recyclable

Purchase products made from recycled or reclaimed materials (100% recycled content carpet) and/or those that can be recycled or reused at the end of their working lives (cradle to cradle or upcycling).

Avoid disposable products

Today there is plenty choice of biodegradable disposables or products that can be recycled, they add to the accumulation of landfill so choose an alternative with a useful lifespan.

Choose Fairtrade products

These certified items, including tea, coffee and chocolate, promote sustainable development by ensuring poorer producers around the world receive a fair price for their products, enabling them to trade their way out of poverty.

Consider all costs associated with your purchase

To assess the full environmental and social impacts of a product or service purchased, you should consider its cost over its entire life cycle, from "cradle" to "grave", from raw material extraction through to manufacture, distribution, use, repair and maintenance, and disposal or recycling. This is called life-cycle costing (LCC).

As part of any sustainable procurement policy, ask suppliers about the impacts associated at each life-cycle stage. Working out the LCC will help you assess on paying out an initial higher cost for a product or service that can be offset by lower ongoing efficiency savings over its lifespan. In the hospitality industry, LCC can be applied to almost everything from led lighting to more complex purchases, such as outsourcing housekeeping services and technical maintenance.

The LCC approach can be put into practice in the procurement process in a number of ways. Today it is not so difficult to calculate the savings on water and energy use, waste disposal or outsourcing a particular service.

Software or online tools are also readily available to help you work out life-cycle costs, e.g. a calculator offered by the EU Energy Star energy-efficiency programme and a tool developed by the Swedish Environmental Management Council.

Ecolabels and certifications schemes

An easy way to source sustainable products and services is to opt for those that carry an ecolabel or are certified by a third-party environmental, social or ethical scheme.

There are hundreds of ecolabels and certification schemes worldwide with some focusing on one environmental aspect only, such as energy efficiency or sustainable-wood harvesting (Forest Stewardship Council). Also on the protection of natural resources or habitats (Rainforest Alliance) or ethical impact (Fairtrade), while others consider the life-cycle impacts of a product or service. The International Organization for Standardization (ISO) describes several types of environmental labelling with only ISO Type I labels certifying that a product or service meets strict standards based on life-cycle assessment.

Online databases help you identify relevant standards for specific products or services, from food and drink, construction materials and cleaning products to appliances, paper or toiletries. There are fewer recognised certification standards for social issues, but the most popular include Fairtrade, health & safety standards and international labour standards.

Gradual implementation

Think of sustainable procurement as incremental and set priorities according to your resources; don’t be over ambitious. The best thing to do is start working with a small group of products and services from sustainable sources, such as recycled paper, non-toxic cleaners, energy-efficient led-lighting and fish. The environmental and social impacts of these items are well known and sustainable alternatives are readily available. Once you have created your policy, remember to communicate it to as many people as possible, including your staff, suppliers and other stakeholders to help raise awareness of your objectives, gain support and keep up momentum.

Keep in mind that sustainable procurement is a hugely complex process, particularly in the hospitality sector where you are dealing with so many different suppliers and governmental organizations providing so many different products and services. It really poses a steep learning curve for hoteliers, which is why it should be about making small, progressive steps.

For existing properties on their first step to sustainability, one of the first things I always recommend is making their paper stream greener. You should constantly be asking whether a purchase is needed in the first place. Any waste is a net loss on the balance sheet.

Establish availability and cost of "green" alternatives

There are alternative sustainable products (energy-efficient TVs, water-saving washing machines, etc.) and services (eco carpet cleaning) on the market. Make sure these will meet your sustainability requirements and, if there are extra costs involved, can these be justified?

Gather background information

Nowadays, with the internet available, it is much easier to find the information needed to set criteria for particular products and services. it will help you straightforward to express what you want technically from a supplier! For help with technical specifications, you could refer to the criteria of a reputable certification scheme. The majority of suppliers is more than willing to help to reach all the requirements for sustainable operations in your property.

Staff training

Training and transparency is very important to give staff the knowledge and understanding of sustainability matters and is key to embedding responsible procurement across the property.

Supplier improvement

Consider accepting suppliers with poor current sustainability performance if they are committed to embarking on systematic, collaborative improvement processes. The goal is long-term mutual success and partnership.

Be aware of green washing

Look for evidence that the product or service you procure is genuinely "responsible or sustainable".

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)

Sustainable Procurement (1)

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:

• 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.

Purchasing decisions can have significant environmental and social impacts, particularly for the tourism and hospitality sectors, which often find themselves under pressure to import large numbers of goods, including food, from distant countries to cater for guests’ demands.

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.

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.

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.

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.

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)