Presentation delivered in Dubai and various locations in the US, EU and Asia in 2010. Most of the points are still equally valid today. We'll be releasing updated versions delivered in 2011 - 2013 soon.
Green Sourcing Make Dollars and Sense
• What is Green Sourcing vs Green Washing?
• Why Going (and Staying) Green Makes Sense
– Corporate Responsibility
– Reduce Cost
– Reduce Risk (Cradle to Grave)
– Tax Benefits
How to Grow Green
Green Sourcing Tips for Outsourcing Professionals
Green Sourcing Tips for Outsourcing Providers
What is Green Sourcing
– Purchasing goods or services that have a reduced adverse impact on health and the
– Requirements in contractual relationships with suppliers to require goods, services,
policies and practices that reduce adverse environmental impacts or promote positive
– Acceptance of responsibility for the environmental consequences of actions and
– Corporate direction encouraging the consideration of environmental factors in decision
Incorporate standards that consider
– Suppliers with established environmental policies and programs embedded into their
products, programs and processes
– Whether materials can be reduced, recycled, returned, or reused
– Vendors who offer an Extended Product Responsibility (EPR) program
– IT commodities must be certified to meet sustainability standards where possible
– Physical building standard certifications (e.g., LEED certification)
Why Green Outsourcing Makes Dollars and Sense
Marketing Advantage / Competitive Differentiation
– Reduce Risk (Cradle to Grave)
– Tax Benefits
Green Retail Facts
• "63 million American consumers are eating organics."
"61.9% of Consumers say they use some type of environmentallyfriendly product."
"20% Price premium they are willing to pay for "clean, green
products over non-sustainable alternatives."
"59% of Retailers are saying that implementing a responsible and
green-oriented sourcing and procurement plan is a crucial element
"89% of Retailers see at least some value in green initiatives."
• Green Washing
– Disingenuously spinning products or services as environmentally friendly
– Beware of the “Green Sheen” (and new FTC rules)
• The “Six Sins of Greenwashing” (TerraChoice)
Sin of the Hidden Trade-Off: e.g. “Energy-efficient” electronics that contain hazardous materials.
Sin of No Proof: e.g. Shampoos claiming to be “certified organic,” but with no verifiable
Sin of Vagueness: e.g. Products claiming to be 100% natural when many naturally-occurring
substances are hazardous, like arsenic and formaldehyde
Sin of Irrelevance: e.g. Products claiming to be CFC-free, even though CFCs were banned 20
Sin of Fibbing: e.g. Products falsely claiming to be certified by an internationally recognized
environmental standard like EcoLogo, Energy Star or Green Seal.
Sin of Lesser of Two Evils: e.g. Organic cigarettes or “environmentally friendly” pesticides
IT Sustainability Standards
IT Sustainability Standards
EPA Energy Star Rated
Desktop and notebook (laptop) computers, integrated computer systems, desktop-derived servers and
workstations bearing the EPA ENERGY STAR logo are capable of entering a low-power state to reduce
significantly the energy it uses. Energy Star is the most widely recognized certification system
The Electronic Product Environmental Assessment Tool (EPEAT)
Products rated bronze, silver or gold under the EPEAT ratings. Ratings based on: Energy efficiency,
Design (product longevity/life extension/toxic materials/recyclability), Product take-back, Packaging, and
Overall environmental performance of the manufacturer
If Information Technology (IT) commodities do not meet sustainability standards, then further review is
required to ensure: the respective company has an environmental policy in place and an established
environmental program is operational, the use of energy-efficient components are embedded into the
manufacturing process, and the vendor’s procurement policy includes responsible purchasing from likeminded companies that offer sustainable products
ISO 14001 certification
ISO 14001:2004 gives the generic
requirements for an environmental
Whatever the organization's activity, the
requirements of an effective EMS are the
ISO 14001:2004 does not specify levels of
ISO has many other standards dealing
with specific environmental issues.
framework for a holistic, strategic
approach to the organization's
environmental policy, plans and actions.
Requires, a commitment to
compliance with applicable
environmental legislation, along with
a commitment to continual
improvement – for which the EMS
provides the framework.
ISO 14001 approval of Products
indicates that these issues
have been vetted:
• Design and functionality of the
• Extraction and processing of
• Manufacturing processes
• Packaging and distribution
• How the product is used
• Recycling, reuse and disposal
Black Book of Outsourcing 2009
Green Sourcing Tips for Buyers
Cultivate Support for Buying Green
Develop a “Cradle to Grave” View of your Lifecycle Supply Chains
Build the Business Case for Going Green (e.g., energy audit)
Identify Key Regulatory Drivers and Risk Mitigation Factors
Develop a Formal Green Sourcing Program and Market It
Build Green into Your
Goals and Objectives
Cost Models / Sensitivity Analyses
RFx (and vendor due diligence / reference checks)
Contracts, Schedules and Contract Management Programs
• Carefully manage power, water and other environmental costs in
• Measure and Manage Your Progress and Report the Results
Green Sourcing RFx Questions
Have you optimized the energy utilization of your data centers, and what steps would you take to
optimize the environmental efficiency of our operations?
How do your pricing methodologies and processes encourage the use of energy efficient strategies like
virtualization and cloud computing?
Do you have a Social and Environmental Corporate Responsibility Program?
Do you have an environmental management system (EMS)?
Do you consider environmental issues in the design process?
Do you provide any data on your company’s environmental impacts?
Are any toxic materials used in your operations or processes? If so, please identify.
Do you have energy efficient production technology?
Do you have facilities running on renewable energy?
What are your waste management strategies (i.e. recycling or landfill or composting)?
Do you incorporate any recycled material, particularly from post-consumer sources, in your production?
Are you Forest Stewardship Council (FSC) certified?
Are you Sustainable Forestry Initiative (SFI) certified?
Are you ISO 14001 certified?
Are your computers, and computers proposed for our operations, EPEAT Bronze, Silver or Gold?
Green Sourcing Tips for Providers
• Assess Your Green Strengths and Market Them
• Identify Green Marketing Opportunities, E.g.,
– Outsourcing to reduce carbon footprint, power, etc.
– Green outsourcing matters to customers
• Avoid Greenwashing
– “Don’t underestimate people’s intelligence or overestimate their interest”
• Factor environmental costs / benefits into pricing models (e.g.,
• Re-evaluate Supply Chain Models (e.g., JIT may be inefficient)
• Identify Tax and Grant Opportunities and Share the Benefits
• Monitor/Comply with REACH and Carbon Offset regulations
• Develop best practices for reducing environmental impacts
IT and Business Process Outsourcing Consulting
Integrated Business, Technology and Legal Services
Focus on Technology, Communications and Environment
Green Sourcing Group
Clients include 70% of the Fortune 100 and a majority of the Fortune
• Headquarters in Potomac, MD (outside of Washington, DC)
• 60 Consultants
• David Baumann