Sustainability and environmental considerations are playing a more important role in energy procurement strategies today. The balance of consideration between the social, economic, and environmental factors has led to the term “Sustainable Purchasing”. Business are looking to “green” their supply chain through the principles of sustainable supply chain management. Today’s procurement decisions are increasingly based on factors other than the purchase price alone. Equal consideration should be given to the use cost (consumption), disposal cost (resource steward) and efficiency cost (supply chain).
Your sustainable purchasing policy can start with a modest effort to simply maintain a program covering material with a low cost per unit that are regularly used and replaced through the course of business. These materials may include at a minimum such items as paper (printing or copy), notebooks, notepads, envelopes, toner, binders, batteries…etc. These actions, in combination with energy sourcing procurement, can help reduce the environmental and air quality impacts of the materials for use in the daily operation and maintenance of your buildings alone. But the benefits extend far beyond just cost and environmental considerations. Sustainable purchasing can also lead to an extremely close relationship with suppliers, developing a collaborative approach to your sourcing needs. This collaboration can lead to improved operations and can also be a major source of innovation for the procurement function. Developing successful relationships and creating new ones through the process is another benefit of a sustainable procurement policy.
The success or failure of any sustainable procurement program lies in its implementation. One of the biggest challenges for sustainable procurement programs is quantifying its benefits. Incorporating realistic, detailed performance measures or goals for the short and long term, from the sustainable procurement programs initiation will quantify the effectiveness of a sustainable procurement program
At EnviroProfit, we can help:
1. Request environmental performance information from suppliers
The first challenge is to understand the larger system you’re in.
The second is to make the most of new relationships.
2. Draft an environmental and sustainable purchasing policy
The key is customization
3. Track purchasing and set long-term goals
Incorporating realistic, detailed performance measures or goals for the short and long term, including clear timetables, annual reviews, and employee accountability for their performance.
Links to some Environmentally Preferred and Sustainable Purchasing:
- EPA: (Comprehensive Procurement Guidelines)
- EPA: (Environmentally Preferred Purchasing Database)
- EPA: (Sustainable Materials Management Program)
An excellent example is energy procurement which represents a significant percentage of any operating budget. Alongside the need to reduce consumption, the procurement process should be carried out through a managed purchasing process by an experienced team of professionals to significantly reduce your costs. Large cost savings can be made through effective management, transparency, and sustainable practices that are repeatable for continued success.
The goals of any procurement process are to make smarter purchasing decisions through sustainable or repeatable actions. Some of the factors that enter into any effective procurement strategy include:
- Energy budgets
- Aggregation of supplier pricing by RFP (lowering supplier margins)
- Energy contract negotiations
- Arbitrage/hedging opportunities
- Market price risk
- New products and initiatives exposure
- Compliance issues
At EnviroProfit, we can help you manage your exposure to these factors and work with you to develop an effective and sustainable plan for your procurement needs in the following areas.
- Natural Gas
- Fuel Oil
- Renewable Energy Sources
Deregulated Energy Markets