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Guidance for Leadership in Sustainable Purchasing
Chapter 4: Purchasing Category Guidance
Procurement of Professional Services
March 17, 2015
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Recording
This session is being recorded and will be posted as a
resource for public access.
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Chapter 2. Create the Program
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
6
Education Sessions Schedule
February 24:
Creating a Sustainable Purchasing Program
March 5:
Running a Sustainable Purchasing Program (Part 1 of 3) – Understanding and Launching Strategy Cycles
March 10:
Running a Sustainable Purchasing Program (Part 2 of 3) – Spend Analysis
March 12:
Running a Sustainable Purchasing Program (Part 3 of 3) – Planning Strategies, Implementing & Reporting
March 17:
Professional Services
March 19:
IT Hardware and Services
March 24:
Transportation
March 26:
Paper
April 1:
Cleaning and Sanitizing Chemicals for Facilities Care
April 8:
Landscaping and Grounds Maintenance
April 15:
Electricity
April 22:
Food
April 29:
Construction and Renovation
May 6:
Furnishings
All sessions take place from 11:00-12:30pm ET.
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
8
Key Terms
Sustainable Purchasing Program (all-caps)
A sustainable purchasing
program that has all four
components the Council
considers essential for a
program to be capable of
achieving genuine
leadership.
Achieving genuine leadership
means taking meaningful
responsibility for all the
significant environmental,
social, and economic
consequences of the
organization’s purchasing.
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Key Terms
Strategy Cycles provide a flexible process for a
group of key stakeholders collaborate to:
•
understand opportunities for improvement;
•
prioritize strategies for addressing them;
•
commit to specific strategic actions;
•
implement those actions; and
•
measure the results over time.
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Key Terms
Strategy (capitalized)
A specific area of focus for which a plan of action is being
developed or has been developed.
Examples could include an organization’s “Electricity Strategy”,
“Supplier Diversity Strategy”, “IT Strategy”, “Human Rights
Strategy”, etc.
There are several types of Strategies an organization might
prioritize for their Sustainable Purchasing Program:
• A category Strategy
• A Strategy focused on a specific aspect of the supply chain’s
environmental, social, and economic performance
• A supplier-specific Strategy
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Key Terms
Strategy Plan (capitalized)
A planning document that describes, in detail, the projects/activities
that make up an organization’s Strategy in a given area of focus.
In this cycle, we’re
going to develop a
strategy for managing
the consequences of
our fuel purchasing.
We’ll call it our “Fuel
Strategy.”
Fuel
Strategy
Plan
Boss, we’d like you to
review and approve our
Fuel Strategy Plan.
We got the green light!
Now, we can implement
our Fuel Strategy Plan!
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Key Terms
Environmental, Social, and Economic Performance
Environmental, Social, and Economic Consequences
Positive or negative influences on the natural, social, and market
systems on which life, communities, and commerce depend.
Leadership in sustainable purchasing involves thinking expansively
and holistically about these influences and identifying how to
optimize them in order to advance a positive future.
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Worksheet handout available for download:
www.sustainablepurchasing.org/performance
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Key Terms
Program Leader
Generic term for the person who leads an organization’s
Sustainable Purchasing Program.
A wide range of professionals have been found to be serving the
Program Leader role. In some organizations, the Program Leader is
a Sustainable Purchasing Coordinator, in others it’s a sustainability
staffer or someone in Environmental Health & Safety, and so on.
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Key Terms
Implementation Team
The individuals that will implement the projects within a Strategy.
These could be the same as the Strategy Team, but often it will
include staff with specific implementation expertise. (E.g., Print
Shop Manager is on Strategy Team, but implementation
responsibility is passed to Print Shop Foreman.)
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
17
Approach to Purchasing Guidance
The Purchasing Category Guidance provides the following:
• clusters of significant environmental, social, and economic
impacts;
• best available actions to address the identified impacts;
• external and organizational benefits
• anticipated challenges
• metrics and indicators that teams can use
to track progress
• policy and specification language
and resources to assist in implementing
the proposed actions, and
• undecided issues
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Approach to Purchasing Guidance
Why use the Purchasing Category Guidance?
• Provides reliable information consistent with how a cross-functional
team operates within the context of this guide.
• Can expedite the Strategy Planning process outlined in Chapter 3
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Approach to Purchasing Guidance
Organizational Considerations
Existing organizational
priorities
e.g., strategic plan, guiding principles, regulations, policies,
advancing brand leadership, existing reporting requirements, existing
rating/certification requirements, improvements to business units, etc.
Cost
e.g., initial cost, return on investment, total cost of ownership, etc.
Performance improvement
potential
e.g., tons of CO2e reduced, gallons of water saved, improved indoor
air quality, increased user satisfaction, etc.
Implementation logistics
e.g., feasibility within an existing long-term contracts, opportunity to
improve upon expiring contracts, scalability, transferability
Organizational risk tolerance
e.g., taking a temporarily conservative approach to new initiatives
due to unforeseen market volatility, brand management, etc.
Resource availability
e.g. financial and human resources
Functional performance
What are the functional performance needs for individual products
and services procured by an organization? How does this relate to
the opportunities available to purchase products with improved
environmental, social, or economic performance?
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Approach to Purchasing Guidance
Types of Recommended Actions
Policy Recommendations
Many categories recommend exploration of existing policies and
finding ways to improve them. Institutionalizing this inquiry process
could result in significant cost savings for the organization as well as
a more strategic use of funds that are spent.
Operational Recommendations
Sometimes the largest opportunities for mitigating the environmental,
social, and economic impacts associated with purchasing require
leveraging operational changes. Operational changes often provide
benefits for seemingly unrelated purchasing categories.
Purchasing Recommendations
How can the organization buy better?
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Approach to Purchasing Guidance
Download this table as a handout at
www.sustainablepurchasing.org/resources
DETAILED GUIDANCE
SOLUTION STRATEGIES TO CONSIDER
Strategy
Description
Example
Efficiency
Reduced impact through reduced use
Implementing a Purchase-to-Pay IT system reduces impacts associated with
printing and transporting paper documents.
Process change
Design the impact out of a process
Air pollution from medical waste incineration is reduced by switching to reusable
surgical tools that are steam sterilized.
Behavior change
Implement programs to shift attitudes and
practices
Voluntary “green office” competitions reduce energy and material consumption,
while increasing recycling.
Combining Projects
Combine multiple projects into a single
positive ROI project
An energy efficiency project is combined with a solar project. Energy savings
offset the solar costs for a good overall ROI.
Engage suppliers and hold accountable for
a specific impact
Some universities require apparel manufacturers to permit independent audits of
factory conditions and provide retribution-free grievance and remedy processes.
Product substitution
Choose a different product with lower ESE
impacts
Chemical costs and workers compensation insurance premiums reduced by
switching to green cleaning products.
Supplier substitution
Choose a supplier with lower ESE impacts
Making evidence of bribery or extortion automatic grounds for suspension of
business with a supplier.
Servicizing
Convert a product acquisition to a long-term
service relationship
Instead of owning copiers, establish a pay-per-copy service relationship so that
the price of each copy reflects the true cost.
In-source
In-source a function to better reduce
impacts
Hiring LEED expertise in-house to optimize and streamline green building across
all of org’s construction and renovations.
Out-source
Outsource when an external party can
better reduce impacts
Contract out utility bill management to firms that leverage energy market expertise
to cut energy and carbon costs.
Offsetting
Pay for an impact reduction to offset
impacts elsewhere
Buying carbon offsets; paying to put land in permanent conservation to offset
development of other land.
Supplier engagement
accountability
&
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
23
Professional Services Defined
Professional Services
Industries characterized by low capital intensity, high knowledge
intensity and a professionalized workforce. Examples include legal,
consulting, architectural, engineering, public relations, and financial
firms. While organizations tend to find a low per dollar risk
associated with professional services purchasing, high purchase
volumes can make this one of the most important categories for
organizations to address.
This guidance focuses on impacts or consequences associated with
the use phase of professional services.
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
26
Professional Services Impacts
Understanding Part 1: Why should we care?
Environmental and social
impacts from travel.
Regular travel from the provision of professional services results in a
variety of environmental impacts. The impacts vary by the mode of
transportation itself distance traveled, among other factors.
Additionally, social and economic impacts directly affecting individual
employees can result from regular or excessive job-related travel.
Environmental impacts from
service deliverables
development and transport.
Depending on the type of service deliverable, impacts from printing,
packaging, and shipping can have negative environmental impacts.
Note: The impacts presented above represent a common cluster of impacts related to the procurement of
services. Because of the variation in impacts associated with service providers (e.g. legal, public
relations, or human resources provider impacts; local versus distant providers), the impacts appear in an
order associated with the amount of control the purchasing organization holds in influencing the service
provider’s environmental, social, and economic performance improvement.
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Professional Services Impacts
Understanding Part 2: What else should we know?
Social and economic benefits
from the procurement of
diverse suppliers.
An organization’s investment in small, minority-owned, veteranowned, women-owned, service-disabled, and/or HUBZone suppliers
and social enterprises.
Environmental impacts
associated with the service
provider’s facility.
•
•
•
•
electricity use.
water consumption
impacts of building services
waste management.
Social impacts of the service
provider’s workforce and
organizational practices
•
•
•
•
•
Health, safety and well-being of employees
Workforce diversity
Employee training and development
Employee engagement and satisfaction
Ethical behavior and compliance
Service provider’s supply
chain impacts of ongoing
purchasing.
•
•
Embedded electricity.
Purchase of products (e.g., furniture, IT products, office supplies,
microwaves, etc.).
Service provider’s local
community and economic
investment.
•
•
•
•
Sponsoring employee volunteering.
Pro bono or in-kind service
Philanthropic donations
Community
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
29
Purchasing Recommendations
Action and Results: What makes a difference?
Make organizational
investments allowing for
potential reduction in service
provider travel.
For example, investing in high quality video and teleconferencing
services will greatly enhance the ability to reduce the need for
contractor travel. Work with potential and current service providers
to invest in similar and compatible equipment to ensure this
investment will improve the environmental, social, and economic
impacts associated with contractor travel.
Design contract to incorporate
a travel policy preferring the
lowest environmental impact
possible.
Incorporate considerations for local and long-distance travel, as well
we overnight trips. *Consider this an opportunity to test
improvements to the organization’s current travel policy for
employees!*
Minimize impacts of service
deliverables.
Look for providers who have the understanding of and capacity for
how to provide the necessary deliverables with the least
environmental, social, and economic impact possible.
Determine consistent screening
criteria for service providers
and encourage proliferation of
that information in the market.
Seek out existing supplier analysis tools that address the
organization’s preferred screening criteria and encourage potential
service providers to report data into those data repositories.
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Challenges
The following challenges exist when attempting to improve the
environmental, social, and economic impact of professional services
purchasing:
• Variations in significant impacts of service providers.
• Lack of consistent scoring criteria for suppliers
• Determining appropriate and consistent leadership criteria for
service providers across sectors
• Service providers’ ability to claim the benefits of employee actions
• Addressing emerging standards
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Agenda
1. Context
1.
Upcoming Pilot Program Education Sessions
2.
Key Terms
3.
Approach to Purchasing Guidance
2. Procurement of Professional Services
1.
Impacts and Findings
2.
Purchasing Recommendations
3.
Further Exploration
West Coast Climate Forum &
Alameda County
3. Q&A + Discussion
32
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Emissions By Scope Type and Category
Supply Chain GHG Inventory Meta-Analysis
Draft Results; 3/10/15
Funded by StopWaste
Emissions By Organization Type and
Purchasing Category
Supply Chain GHG Inventory Meta-Analysis
Draft Results; 3/10/15
Funded by StopWaste
Professional Services Types Contributing to
GHG Impacts for Public Agencies
Research Question: Are there
certain types of professional
services that contribute to more
to public agency climate
impacts?
•
•
•
•
Engineering and
Architecture
Employment Services
Management Consulting
Community Programs
(for public agencies only)
Supply Chain GHG Inventory Meta-Analysis
Draft Results; 3/10/15
Funded by StopWaste
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Next Steps: Learning from Others
Alameda County is leading research to learn from other leading
public agencies on the effectiveness of current efforts to procure
more sustainable professional services.
Research Question: What are the most effective strategies in
public agency contracting that reduce impacts of the service
provider, both in contract delivery and overall climate impact of
the service provider’s operations?
• Share results with the forthcoming Climate Friendly
Purchasing toolkit, a project of the West Coast Climate Forum
• Incorporate learnings into Strategy Cycle for Alameda County
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Questions
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Education Sessions Schedule
February 24:
Creating a Sustainable Purchasing Program
March 5:
Running a Sustainable Purchasing Program (Part 1 of 3) – Understanding and Launching Strategy Cycles
March 10:
Running a Sustainable Purchasing Program (Part 2 of 3) – Spend Analysis
March 12:
Running a Sustainable Purchasing Program (Part 3 of 3) – Planning Strategies, Implementing & Reporting
March 17:
Professional Services
March 19:
IT Hardware and Services
March 24:
Transportation
March 26:
Paper
April 1:
Cleaning and Sanitizing Chemicals for Facilities Care
April 8:
Landscaping and Grounds Maintenance
April 15:
Electricity
April 22:
Food
April 29:
Construction and Renovation
May 6:
Furnishings
All sessions take place from 11:00-12:30pm ET.
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Summit workshops will feature Guidance-based training, case study
presentations, and peer-to-peer dialogue.
www.sustainablepurchasing.org/summit
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