Green Sourcing Make Dollars and SenseDavid BaumannCEO, Counsel and ConsultantTechNexxus
OverviewWhat is Green Sourcing vs Green Washing?Why Going (and Staying) Green Makes SenseCorporate ResponsibilityReduce CostReduce Risk (Cradle to Grave)DomesticInternationalTax BenefitsHow to Grow GreenGreen StrategiesGreen Sourcing Tips for Outsourcing ProfessionalsGreen Sourcing Tips for Outsourcing Providers
Green SourcingWhat is Green SourcingPurchasing goods or services that have a reduced adverse impact on health and the environmentRequirements in contractual relationships with suppliers to require goods, services, policies and practices that reduce adverse environmental impacts or promote positive environmental impactsAcceptance of responsibility for the environmental consequences of actions and decisionsCorporate direction encouraging the consideration of environmental factors in decision makingIncorporate standards that considerSuppliers with established environmental policies and programs embedded into their products, programs and processesWhether materials can be reduced, recycled, returned, or reusedVendors who offer an Extended Product Responsibility (EPR) programIT commodities must be certified to meet sustainability standards where possiblePhysical building standard certifications (e.g., LEED certification)
Why Green Outsourcing Makes Dollars and Sense
Corporate ResponsibilityPublic PerceptionMarketing Advantage / Competitive DifferentiationProduct DiversificationReduce CostEnergyDisposalComplianceReduce Risk (Cradle to Grave)DomesticInternationalTax Benefits
360 Degrees of Green
Green Sourcing Process
Green Retail Facts"63 million American consumers are eating organics."
"61.9% of Consumers say they use some type of environmentally-friendly 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 of success."
"89% of Retailers see at least some value in green initiatives."
Green WashingDisingenuously spinning products or services as environmentally friendlyBeware 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 certification. Sin of Vagueness: e.g. Products claiming to be 100% natural when many naturally-occurring substances are hazardous, like arsenic and formaldehydeSin of Irrelevance: e.g. Products claiming to be CFC-free, even though CFCs were banned 20 years agoSin of Fibbing: e.g. Products falsely claiming to be certified by an internationally recognized environmental standard likeEcoLogo,Energy StarorGreen Seal. Sin of Lesser of Two Evils: e.g. Organic cigarettes or environmentally friendly pesticides
Awareness vs Action
Why Going Green Matters
Triple Bottom Line
How to Grow Green
IT Sustainability StandardsIT Sustainability StandardsEPA 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 vendors procurement policy includes responsible purchasing from like-minded companies that offer sustainable products
ISO 14001 certificationISO 14001:2004 gives thegeneric requirementsfor an environmental management system. Whatever the organization's activity, the requirements of an effective EMS are the same.ISO 14001:2004 does not specify levels of environmental performance. ISO has many other standards dealing with specific environmental issues. framework for a holistic, strategic approachto the organization's environmental policy, plans and actions.Requires, acommitment to compliancewith applicable environmental legislation, along with a commitment tocontinual 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 productExtraction and processing of materialsManufacturing processesPackaging and distributionHow the product is usedRecycling, reuse and disposal
Black Book of Outsourcing 2009
Green Sourcing Tips for BuyersCultivate Support for Buying GreenDevelop a Cradle to Grave View of your Lifecycle Supply ChainsBuild the Business Case for Going Green (e.g., energy audit)Identify Key Regulatory Drivers and Risk Mitigation FactorsDevelop a Formal Green Sourcing Program and Market ItBuild Green into Your Goals and ObjectivesSpecificationsCost Models / Sensitivity AnalysesRFx (and vendor due diligence / reference checks)Contracts, Schedules and Contract Management ProgramsCarefully manage power, water and other environmental costs in ContractsMeasure and Manage Your Progress and Report the Results
Green Sourcing RFx QuestionsHave 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 aSocial and Environmental Corporate Responsibility Program?Do you have anenvironmental management system(EMS)?Do you consider environmental issues in thedesign process?Do you provide any data on your companysenvironmental impacts?Are anytoxic materialsused in your operations or processes? If so, please identify.Do you haveenergy efficient productiontechnology?Do you have facilities running onrenewable energy?What are yourwaste management strategies(i.e. recycling or landfill or composting)?Do you incorporate anyrecycled material, particularly from post-consumer sources, in your production?Are youForest Stewardship Council(FSC) certified?Are youSustainable Forestry Initiative(SFI) certified?Are youISO 14001certified?Are your computers, and computers proposed for our operations, EPEAT Bronze, Silver or Gold?
Green Sourcing Tips for ProvidersAssess Your Green Strengths and Market ThemIdentify Green Marketing Opportunities, E.g., Outsourcing to reduce carbon footprint, power, etc.Green outsourcing matters to customersAvoid GreenwashingDont underestimate peoples intelligence or overestimate their interestFactor environmental costs / benefits into pricing models (e.g., disposal)Re-evaluate Supply Chain Models (e.g., JIT may be inefficient)Identify Tax and Grant Opportunities and Share the BenefitsMonitor/Comply with REACH and Carbon Offset regulationsDevelop best practices for reducing environmental impacts
TechNexxusIT and Business Process Outsourcing ConsultingIntegrated Business, Technology and Legal ServicesFocus on Technology, Communications and EnvironmentGreen Sourcing GroupClients include 70% of the Fortune 100 and a majority of the Fortune 500Headquarters in Potomac, MD (outside of Washington, DC)60 ConsultantsDavid Baumanndbaumann@technexxus.comwww.TechNexxus.com
AppendixTechNexxus Green Sourcing Tips22
Power Usage Effectiveness
Where Does It All Go?
Data Center Infrastructure Efficiency