Sustainable Green Procurement

Willem Siahaya
Indonesian Procurement Professional Association
Comments: The paper is like a lecture note. It is not a case study nor an
academic research.
1. The paper covers vaguely the issue and I am not sure it intends to
provide a global common practice or a specific country case. The
author should state clearly the scope of this paper: Sustainable
procurement in Malaysia or global sustainable public procurement.
2. Many statements do not have any explanation. Many items (cited in the
paper without explanation for example, items in the Policy section).
3. The References section has a list of publication without being referred
in the text. So, the REF section should be deleted.
4. The title should have either sustainable or green as these two words
mean the same in the field of public procurement.
The author should revise the paper for inclusion in the IPPC7 Proceedings.
Submission deadeline is May 31. With this deadline, I hope the author is
able to make major revision. If not, he just make minor revision. If he
wants to keep the REFERENCES section, he has to refere those
publications in the text.

Abstract
New trends of procurement require embedment of sustainability
principles in the way the entire procurement process is executed. The
need to improve organizational efficiency, reduce waste, overcome
supply chain risk, and achieve competitive position has made
companies to start considering environmental issues as part of state

consideration and responsibility. An analysis was performed to rank

the challenges and benefits of sustainable green procurement, while
reducing harmful emissions and waste generation was identified as
the main benefit. Sustainable procurement is an emergent concept
that

can

improve

procurement

practices

and

enhance

the

sustainability performance of the industry, construction, logistics,

and goods transportation. Procurement organizations are more
seriously involved in designing and implementing sustainable green
procurement policies, focusing on how environmental issues can be
integrated in the procurement activities.
This paper seeks to review the concept of sustainable green
procurement on the practical implications and identify ways that
would guide future green procurement management.
Keywords
Sustainable procurement, green procurement, environmental, supply
chain, ethical practices.
Introduction
Sustainable procurement is an emergent concept that can improve
procurement practices and enhance the sustainability performance.
Sustainable procurement involves a higher degree of collaboration
and engagement between all parties in a supply chain. This is where
an organization examines a product movement along the supply
chain and assesses the environmental credentials.

Green procurement is the activities with the intentions of having the

environmentally friendly products and services the selection of
partners, and the setting of environmental requirements. In addition,
it aims to build perceptions of procurement professionals on the
benefits of using sustainable green procurement in doing business. It
is concluded that the leadership and commitment of the organization
are the key to fully establish sustainable green procurement.
Environmental issues are becoming more important in managing any
business. The rise in greenhouse emissions and pollution of the
environments by the companies has precipitated the need for
organization

to

realign

their

procurement

activities.

Green

procurement places emphasis on respect for environmental factors as

an ethical requirement. Investors, business partners, employees,
governments and most of all customers are demanding both
profitable performance and ethical conduct from companies.
Green procurement steams from pollution prevention principles and
activities.

Green

procurement

policies

are

applicable

to

all

organizations, regardless of size. Its programs may be as simple as

procuring renewable energy, recycled office paper or more involved
such as setting environmental requirements for all procurement
people involved.
Green products or services utilize fewer resources, and are designed
to last longer and minimize their impacts on the environment from
cradle to grave. Green products and services have less of an impact
on human health and may have higher safety standards. Whilst some

green products or services may have a greater upfront expense; they

save money over the life of the product or service.
Before a green procurement program can be implemented, current
procurement practices and policies must be reviewed and assessed.
It requires the life-cycle of the environmental impacts of products or
services

and

set

of

environmental

criteria

against

which

procurement decisions. The outcome is a regularly reviewed policy

that is integrated into organizational programs and policies. Green
procurement policies and programs can reduce expenditure, and
increase and influence the efficieny of production, markets, prices,
available services and organizational behavior. The obstacles to
implementing a green procurement program include lack of readily
available

environmental

friendly

products,

expensive

or

zero

environmental alternatives, and lack of organizational support.

Policy
The policy for sustainable green procurement should be carefully
evaluated and the results are important to improve the approaches in
regards to the costs and benefits. The organization should have
sufficient special knowledge to new effective methods when assessing
procurement for sustainable green procurement implementation. The
mployees should be equipped with the competencies of designing and
managing contracts by trainings of after sales service and human
resources to perform functional and environmental to be able to have
the end product and verify contract performance.

Sustainable green procurement initiatives appear to be instrumental

for improving supply chain performance by setting standards,
building skills, saving cost, and improving customer and vendor
relationships.
The policy of sustainable green procurement application consists of:
1. Compliance to all relevant regulatory compliance requirements.
2. Procuring minimum of hazardous or toxic substances {Which
country set this requirement? Minimum is too vague.

Be

specific).
3. Procuring extended product life of recycled content.
4. Encouragement of lesser consumption of resources like energy,
water and other natural resources.
5. Extended producer responsibility of environmental. (What do you
mean?)
6. Recyclable packaging.
7. Certification for environment products.

Program
The following are the steps in implementing sustainable green
procurement program:
1. Establish organizational support to change the policy and
procedure in order to be successful in implementing this
program. Thus, the managements full support to this initative is

required. Making procuring decisions must be involved in the

implementation process.
2. Implement self-evaluation to evaluate the present procurement
practices.

This process will clarify what is procured and to

provide a baseline, in order to measure future success and to

focus on the development of sustainable green procurement
goals.

3. Set goals policy on on specific priorities and targets.

4. Develop strategy to identify and implement changes, both short
and long-term, identify suitable products and services, and
evaluate the environmental performance of vendors.
5. Run a pilot project to provide practical experience in procuring
green products and services, by applying green procurement
principles to a specific product or service. Pilot projects can be
used to generate more detailed guidance on procurement
practices.
6. Assign the accountability plus a well designed communications
plan addressing employees, customers, investors, vendors, and
the public.
7. Sustain all business practices. It is important that a systematic
review of the sustainable green procurement program be carried
out, in order to establish whether the scheme is meeting the goals
and objectives.

The following are the sustainable green procurement program

components:
1. Request for proposal is the component used during the vendor
selection process to understand potential vendors sustainability
focus as part of the selection process.
2. Inclusion
component

of

environmental

used

during

provision

the

vendor

in

contracts

selection

is

process

the
to

communicate to vendors the commitment to collaboratively

improving sustainability in the supply chain.
3. Annual assessment is the component used once a vendor has
been

selected

environmental

and
metric

onboarded
data

from

to

obtain

supply

base

quantitative
to

monitor

the

vendor

improvements.
4. Business

review

is

the

component

used

in

management process to engage vendors in discussions about

sustainability program that are currently implemented.
Technology
Some of the technologies that have helped in sustainable green
procurement are:
1.

e-Procurement systems
Good procurement processes rely on information exchange and
the e-procurement or procure-to-pay platforms are the best bet to
ensure the right information is available at the right time. Eprocurement process effectively drives users to request any items
7

or services from catalogs and ensures the catalogs are always

updated with green ratings and product component information.
2.

e-Sourcing
Companies, during the evaluation of vendors of any key
commodity, are progressively engaging in developing information
to identify and investigate vendors by using green technologies to
benefit the environment.

3. Contract management
The use of contract management solution helps to implement
mandatory eco-friendly clauses during the authoring of the
contract and tracks the milestones attached to such an
agreement. Code of conduct focuses on environmental impact of
the materials the vendors provide and on working conditions.
Goals
Environmentally preferable procurement is the selection of products
and services that have a lesser or reduced impact on the
environment over the life-cycle of the products or services when
compared with competing products or services serving the same
purpose.
The environmental performance goals include:
1.

The reduction of greenhouse gas emissions and air contaminants;

improved energy and water efficiency.

2.

Reduced waste and support of reuse and recycling.

3.

The use of renewable resources.

4.

Reduced hazardous waste.

5.

Reduced toxic and hazardous substances.

The green option is utilized whenever the product or service is

comparable in quality, availability and price.
Environmentally preferable procurement involves the selection of
goods and services that positively impact or have less harmful
consequences

for

the

environment

than

traditional

products.

Sustainable green procurement is dedicated to helping customers

meeting their procurement goals by providing environmentally
preferable procurement contracts. Sustainability program initiates
green procurement program, which is managed by the organization,
to

begin

working

collaboratively

with

vendor

base

to

build

sustainability within supply chain, stimulating innovation and

market development of demand for environmentally preferred goods
and

services,

and

encouraging

and

supporting

emerging

environmental technologies.
Implementation
Environmentally responsible or sustainable green procurement is the
selection of products and services that minimize environmental
impacts. It requires company to carry out an assessment of the
environmental consequences of a product and consider the costs of
securing

raw

materials,

manufacturing,

transporting,

storing,

handling, using, and disposing of the product. Sustainable green

procurement is rooted in the principle of pollution prevention which

strives to reduce risks to human health.
Green products are generally produced in a manner that consumes
fewer natural resources or uses them more sustainably, as with
sustainable

forestry.

They

may

involve

less

energy

in

their

manufacture and may consume less energy when being used, and
they generally contain fewer hazardous or toxic materials. Green
products are also generally designed with the intention of reducing
the amount of waste created and may contain recycled material in
using less packaging.
Green procurement can offer cost savings. In particular, procure
green usually involves products that are easily recycled, last longer or
produce less waste. Moreover, green products generally involve fewer
toxic or hazardous materials, reducing associated expenses such as
permit fees and toxic materials handling.
Organizations often require a green procurement program as part of
their environmental management systems. Regulations increasingly
require

the

adoption

of

green

procurement

practices.

Green

procurement has benefits for health and safety, both of workplaces

and of the wider community. Organizations that practice green
procurement will be recognized as good governance.
Implications
Sustainable green procurement should consider the environmental,
social and economic consequences of design non-renewable material
use, manufacture and production methods, logistics, delivery,
10

operations, maintenance, recycling options, disposal, and vendor

capabilities to address consequences throughout the supply chain.
The

social

and

economic

concerns

underlying

sustainable

procurement are already clear even within the procurement and

supply chain management activities, focusing on user friendliness,
quality, efficiency, vendor offer evaluation, and vendor selection
process.
The general implications of sustainable green procurement are:
1. Emphasis on development and operation of environmental
procurement policies across all business partners. Policy of which
Environmental procurement is a key element. A performance
evaluation report is required to show how the business has
performed in the related aspects. Key performance measures
reduction in wastes, reduction in emissions, new products
developed but which can be recycled.
2. Increasing

intervention

of

the

government

in

ensuring

minimization of the impact of business activities on the

environment through environmental regulations.
3. Increased need to create stakeholder awareness on the issues of
sustainability procurement practices.
4. Increasing need to use costing approaches that accommodate
environment related activities and costs.
5. Process flow analysis especially at product design and evaluation.

11

Benefits
Green procurementis not just the process of buying goods and
services that are environmentally friendly, but also a way of providing
a sustainable process that ensures the continuity of supply chain.
This includes choosing the vendors who provide materials that are
less harmful to human and society. Procurement needs to consider
both the environmental aspects, potential social impacts, and also
carefully evaluate the life-cycle assessment of goods and services in
order to decide upon possible dumping and recycling alternatives for
each component. Sustainable green procurement processes are also
synonymous with frugality by ensuring accurate inventory quantities
and reduction of waste.
The benefits of sustainable green procurement are:
1. Increase

business

sustainable

goods

and

services

from

responsible vendors, enhance reputation, increase customer

loyalty, and attract new customers.
2. Improve reputation management with vendor or country with a
poor environmental, social and ethical record.
3. Improve access to capital investors and lenders look to a
countrys social, environmental and governance performance.
Conclusion
This paper with the topic of sustainable green procurement focuses
on its meaning, organizational benefits, and practical implications for

12

procurement process to give deeper understanding and appreciation

of the concept, policy, and decision-making.

Sustainable green procurement gives a higher priority to materials

with lower environmental impact to expand the market of green
products, promotes the development of environmentally friendly
products, and raises environmental awareness among vendors and
others who are involved in the supply chain.
The paper concludes that companys product re-usability contributes
greatly

to

sustainable

green

procurement

practices

in

the

organization at a great extent. Therefore, all related parties should

consider sustainable green procurement and ethical practices in the
perspective of countries in the future. More empirical sustainable
green procurement practices to such related practices as green
industry, green logistics, green transportation, green warehousing
among others also need to be considered urgent.
Literature
Preuss L. 2007. Sustainability Initiatives. Business Strategy and the
Environment 16(5): 354-365.
Tarantini M, Loprieno AD, Porta PL. 2011. A life-cycle approach to
Green Public Procurement 36(5): 2473-2482.
Meehan J, Bryde D. 2011. Sustainable Procurement Practice.
Business Stratergy and the Environment 20(May): 94-106.
Willem Siahaya 2012. Procurement Management, Academic Business
Government, Environmental Procurement 77-138
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Environmentally Responsible Procurement, CSA Z766-95

Global Environmental, Health and Safety (EH&S) Policy
https://www.researchgate.net/publication/236691908

may

ws

14

2016