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New Center for Sustainable Procurement Research Outlines Key Insights for Purchasers at Global Companies
BSR and Hilton Worldwide Initiative Focuses on Tools and Insights to Inform Sustainable Purchasing
SAN FRANCISCO - BSR and Hilton Worldwide released a new report today highlighting year-one findings from the Center for Sustainable Procurement (CSP), an initiative launched in May 2012 to help global business procurement managers integrate sustainability into their purchasing decisions. The research is the first published work of the CSP and draws lessons from three yearlong pilot projects with AT&T, Best Buy, and Dell, as well as from Hilton Worldwide's work integrating sustainability criteria for product procurement into its proprietary LightStayTM performance-management system.
"Procurement directors are über-consumers-charged with buying thousands of the same product types for their companies-and they must weigh many factors in these decisions, from price to quality to delivery timing," said Eric Olson, Senior Vice President, Advisory Services, BSR. "While sustainability should be a critical factor, there is a dearth of information on how to integrate it into these decisions."
The CSP's research and analysis included interviews with seven global companies that are currently leading on responsible supply chain efforts, three multistakeholder efforts focused on product-level sustainability, and extensive desk-based research on the current landscape of sustainable procurement initiatives. In the first year, experts from the CSP analyzed three products with BSR member companies to examine how product sustainability information could be included in procurement decisions:
- AT&T's fan belts for building mechanical equipment: This basic product contributes to the company's annual energy output, but to upgrade the fan belts to achieve cost and energy savings, the project leaders needed to understand and communicate the return on investment.
- Best Buy's in-store display units: This moderately complex category comprises several substitutable commodities (such as wood/wood products, metals, plastics, and more) but requires strategic supplier engagement to identify sustainable alternatives that meet Best Buy's needs. Changes in displays could reduce costs for the company if display units are redesigned for reuse.
- Dell's notebook computers: This complex product requires management of long-term strategic relationships with a small number of key suppliers (the original design manufacturers or ODMs) in order to reduce the embedded energy use over the lifecycle of the device.
Commenting on the report, William Kornegay, Senior Vice President, Supply Management, Hilton Worldwide said, "Procurement managers have long struggled to access the resources or the guidance they need to make strategic and sustainable purchasing decisions. The CSP addresses that gap and aims to equip those managers with the tools they need to purchase more sustainable products. We believe that by analyzing and sharing insights and best practices, we can catalyze global sustainability solutions across industries and around the world."
The report outlines four key lessons from these case studies, as well as from Hilton Worldwide's procurement analysis:
- Align the strategy with the nature of the category and supplier relationships: For simple products, the preferred business and sustainability specifications can be written by the company and then sent to suppliers for a competitive bid. But as products increase in complexity, companies must work strategically with suppliers to enhance the product's sustainability characteristics over time.
- Involve the right players: Include the broad range of internal stakeholders that influence the design, specification, and use of purchased products and services.
- Establish a clear business case: Given the range of attributes procurement directors have for purchasing decisions, it's important to emphasize how sustainability attributes support those needs-for instance, through reduced costs or savings over the life of the product.
- Start with what is measurable: Achieving the ultimate goal of lifecycle sustainability will take significant time and effort, making it important for companies to start simple and build momentum through early wins.
"The Center for Sustainable Procurement will be building on these early results and insights by continuing to work with individual companies on embedding sustainability into procurement decisions, and using this evolving body of work to create tools and guidance that others can learn from and adapt for their own use," said Olson. "We are actively looking for ways to engage a wider audience of companies, both individually and via trade associations, on these challenges."
For more information about the Center for Sustainable Procurement, visit www.bsr.org/en/our-work/working-groups/center-for-sustainable-procurement. To download a copy of "Driving Sustainability Impact Through Procurement," visit www.bsr.org/en/our-insights/report-view/bsrs-center-for-sustainable-procurement-year-1-findings-and-insights.
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BSR works with its global network of more than 250 member companies to build a just and sustainable world. From its offices in Asia, Europe, and North and South America, BSR develops sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. Visit www.bsr.org for more information about BSR's more than 20 years of leadership in sustainability.
About the Center for Sustainable Procurement
The Center for Sustainable Procurement (CSP) is a multiyear, multicompany effort focused on the development of tools and approaches for sustainable procurement for the benefit of the wider network of companies that are interested in integrating this into their overall sustainability priorities.
LightStay is Hilton Worldwide's proprietary system developed to calculate and analyze sustainability performance. LightStay measures multiple utility and operational metrics such as (but not limited to) energy, water, carbon, housekeeping, paper product usage, waste, chemical storage, air quality and transportation. In addition, LightStay provides social networking tools that allow properties to communicate and share information, and features a "meeting impact calculator" element that calculates the sustainability impact of any meeting or conference held at a property.