Tag Archives: environment

Can Procurement Help Turn This Sea Turtle’s Frown Upside Down?

Think saving The Great Barrier Reef is out of your hands or entirely irrelevant to you? Think again! Climate change is everyone’s problem and we can all make a difference; down to the last procurement pro!

If you’re lucky enough to have travelled to the coast of Queensland, Australia and visited The Great Barrier Reef, you’ll agree that it is a true wonder to behold.

At 2,300km long it is the largest living thing on earth (roughly the size of Italy or the equivalent of 70 million football fields) and home to an incredible range of wildlife from dozens of species of fish, to sea turtles, to dolphins and so much more.

“It is one of the greatest, and most splendid natural treasures that the world possesses.”- Sir David Attenborough

But it’s under serious threat from a number of environmental factors and it’s everyone’s job to save it; not least procurement’s. We caught up with Anna Marsden, Managing Director – Great Barrier Reef Foundation to learn more about what’s at stake and what we, as professionals, can do to help.

Three factors threatening the Great Barrier Reef

  1. Climate Change

Tropical sea surface temperatures have risen by 0.4–0.5 °C since the late 19th century. In unnaturally warm conditions coral becomes stressed and agitated, leading it to expel the algae that gives it its colour and eventually bleaching. Whilst bleached coral is not yet dead, it is an indicator of severe stress. And if the sea temperature is consistently high for longer than 30 days; it will eventually die. “Look in your garden on a hot day or even a hot week” explains Anna.  “Your plants will start to wilt and eventually, if the temperatures don’t decline, they will perish.” The effect that extreme heat has on a coral reef is much the same.

“Other ways we are seeing climate change playing out is in extreme weather. In recent years there have been more Category 5 cyclones than ever before which are hugely damaging; destroying and weakening the reef’s structure.”

“The reef has always had natural foes and challenges, but this is the first time it’s at such a scale” Anna explains.

  1. Water Quality

Declining water quality is recognised as one of the most significant threats to the long-term health and resilience of the Great Barrier Reef. 

“So much waste washes into our oceans – extra soil, extra fertiliser etc which is making it extremely dirty. And nothing grows well in dirt!” Anna asserts. “Whilst bad water quality itself isn’t a life-ending challenge for the Great Barrier Reef, it does reduce the resilience of the system and, on top of everything else going on, it’s a big problem.”

  1. The Crown-of-Thorns Starfish

Increasing sediment, nutrients and contaminants entering coastal waters has been linked to outbreaks of crown-of-thorns starfish, a species which, Anna jokes, “belong in an alien movie!”

“They munch on the coral, each one managing to consume a dinner plate’s worth of it every couple of days. Excess nutrients from sugar cane farms amplifies their breeding patterns.”

Why should procurement teams care?

‘At what price?’ a recent Deloitte report, which investigated the economic, social and icon value of the Great Barrier Reef estimated  its worth at $56 billion; taking into account tourism, fishing, marine science and research. The study also calculated that the reef has resulted in the employment of over 64,000 Australians between 2015–16.

So it’s undeniable that there is real, and huge, value in the Great Barrier Reef – it’s genuinely worth salvaging.

But it can also be usefully thought of as the, slightly harrowing, poster-child for climate change. It’s understandably difficult for procurement professionals around the world to understand the impact their actions are having in terms of climate change and the polluting of our oceans. But the sorts of changes and damages reported by the Great Barrier Reef foundation are mirrored across the world’s oceans.

Take plastic pollution as an example; eight million tons of plastic enter our oceans each year and it’s predicted that by 2050, there will more plastic in the ocean than fish.

What can businesses do?

“Ultimately we need to start moving faster towards a renewable energy environment,” explains Anna. “There’s no single cause in this and there are roles that all businesses can play”

Fortunately, a number of big corporations are helping to provide innovative solutions to protecting the Great Barrier Reef.

“At present divers are hand-shooting crown of thorns starfish with a saline solution, which is an extremely slow process.”

But a robot being developed through a Great Barrier Reef Foundation project partnership with Google and the Queensland University of Technology, aptly named ‘RangerBot’ has the capability to do the work of 50 divers per day. It works 24/7 and can function in choppy waters. “One day soon we’ll be able to drop six of them into an infested area and come back to collect them only when their work of culling the starfish in that area is done!”

Another inspiring example of corporations doing good for the Reef is Rio Tinto’s RTM Wakmatha vessel that has been dubbed the ‘ship of opportunity’.  Rio Tinto invested in a laboratory on their ship which collects vital data as the ship travels along the Queensland coast in the ordinary course of business. This data is used to gain insights as to how ocean chemistry is changing across reef habitats.

Another cool tech solution is a polymer-based sun shield that hangs together in the water for about two days after deployment, forming an umbrella and cutting out 30 per cent of UV light to protect the coral. Made of calcium carbonate, the sun shield is 100 per cent biodegradable and is absorbed back into the system once it has dissolved.

What can YOU do?

As hard as it is to know how to effect real change, there are small things we as individuals can do, and encourage our organisations to do. Banning single-use plastic bags, cycling to work or using keep-cups are all small and immediate positive changes we can make.

Further to that, procurement pros should ask themselves – what can I do with the purchasing power in our company?

As Anna points out, “climate change is about our relationship with the planet. We all make decisions that drive it, we all have a role to play in this.”

“One of our corporate partners is Cleanaway – Australia’s leading waste management, recycling and industrial services company.”

Cleanaway work with big businesses to ensure sustainability is as the core of waste-sorting and encourage the adoption of reusable resources.

About the Great Barrier Reef Foundation

The Great Barrier Reef Foundation exists to ensure a Great Barrier Reef for future generations. We seek out the solutions and innovations that will also benefit coral reefs globally as they tackle the same threats and challenges facing the world’s largest coral reef.

“Our focus in the short term is on boosting the resilience of the Reef to allow it to bounce back from major challenges as a result of a changing climate and declining water quality. We’re buying the Reef time while the world works to meet the conditions of the Paris Agreement.”

Read more here. 


Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Last month’s webinar on modern slavery,  Procurement Unchained, will soon be made available on-demand via the Procure with Purpose group on Procurious. Click here to enroll and gain access to this and all subsequent Procure with Purpose events. 

From Pittsburgh to Paris – Let’s Clear the Air

It’s all very well putting Pittsburgh before Paris, but did you know that modern anti-pollution laws first started in Pennsylvania? Tania Seary gives the run-down on steel cities, “death-fogs” and Pittsburgh’s incredible transformation into an innovation hub.      

It’s not every day Pittsburgh hits the news, but it certainly did last week with the comment, “I was elected to represent the citizens of Pittsburgh, not Paris”. The subtext is that there’s an obligation to protect the steel industry before the climate.

I’m not a political analyst, nor a climate change expert, but I have lived in Pittsburgh, visited Paris and worked in the metals industry. I therefore wanted to share some of my own personal learnings (and give some historical context) for those of who are trying to catch up with all the news.    

The Donora Death Fog

Ironically, Pittsburgh is only 30 miles north of a town which famously claims to have kick-started modern anti-pollution laws.

You may not have heard of the Donora Death Fog (actually a smog), where the deadly combination of an atmospheric inversion, toxic gases from the town’s zinc and steel works led to the death of 20 people and half a town hospitalised in 1948.

Comparable to the Great Smog of London and perhaps even modern-day Shanghai, the Death Fog played a big part in opening the eyes of Americans to the hazards of air pollution. The tagline at the Donora Smog Museum is “Clean Air Started Here”, because concerted political action saw the first act concerning air pollution being put into law in 1959. Pennsylvania passed legislation that afforded the state the authority to prevent the “pollution of the air by smokes, dusts, fumes, gases, odours, mists, vapours, pollens and similar matter, or any combination thereof”.

Modern Pittsburgh is a tech hub, not a steel city

The jobs that the administration wants to save left Pittsburgh in the 1970s. Since then, Pittsburgh has built itself into a great example of a city that has thrived on new opportunities.

I had the pleasure of working in Pittsburgh for a couple of years around the turn of the century – in fact, I was there during the Y2K frenzy. For those of you who weren’t in the workforce then, the “Y2K bug” caused a panic when people thought the world’s computing systems would go into a meltdown when dates changed from 1999 to 2000. The consulting companies made a fortune!

Although it was once among the most polluted cities in the country, Pittsburgh has reinvented itself from a steel town to a centre of “eds and meds”. It has become a hub of technical innovation and medical research. The city even has its own Google outpost, along with a test track for autonomous cars.

In reinventing itself, Pittsburgh has benefited from flagship universities like Carnegie Mellon and the University of Pittsburgh, which produce their own tech entrepreneurs and medical breakthroughs.

Pittsburgh nurtures entrepreneurs

I have to mention two of the city’s most famous entrepreneurs – both named Andrew. Andrew Carnegie and Andrew Mellon were huge drivers and beneficiaries of the steel industry (like the U.S. itself) and then spent the large majority of their lives giving their money away.

Born in 1835, Andrew Carnegie was a Scottish-American industrialist who is still identified as one of the richest Americans ever. By the time he was 50, he had almost total control of steel production in Pennsylvania. He squeezed every penny out of his mills, living by a famous motto that every procurement professional can relate to: “Watch the costs, and the profits will take care of themselves.”

He sold Pittsburgh’s Carnegie Steel Company to J.P. Morgan in 1901 for half a billion dollars, propelling him to the position of richest American (surpassing even John D Rockefeller). While J.P. Morgan transformed his company into the U.S. Steel Corporation, Carnegie devoted the rest of his life to large-scale philanthropy, with Pittsburgh itself benefiting enormously with stunning libraries, a university, museums, a gilded concert hall and more.

It seems like the state governors and city mayors who are committed to upholding the 2015 Paris agreement agree with Andrew Carnegie’s quote: “Do your duty, and a little more, and the future will take care of itself.”

Or, in Andrew Mellon’s words, “Every man wants to connect his life with something he thinks eternal”.

Andrew Mellon built up a financial-industrial empire throughout the late nineteenth century by supplying capital for Pittsburgh-based corporations. He founded the Aluminium Company of America (Alcoa) and branched into industrial activities including oil, steel, shipbuilding and construction. Mellon also reformed the US Government’s tax structure while he was secretary of the treasury. Like Carnegie, he gave back an enormous amount of his wealth, with his philanthropy making possible the the building of the National Gallery of Art in Washington, D.C.

These days, Pittsburgh is home to one of the procurement profession’s all-time entrepreneurs, the legendary Glen Meakem. Meakem founded Freemarkets Inc., the first online auction technology, which was later purchased by Ariba. Keeping with tradition, Meakem has also invested a lot of his resources into philanthropy.

Giving back

The story of these entrepreneurs all point to a wider trend as Pittsburgh continues to evolve. Like Carnegie and Mellon, the city grew rich on the steel industry, but now it’s giving back. Firstly, by producing a new generation of entrepreneurs whose success ultimately benefits the community, and secondly, by being part of a climate alliance that is looking for future opportunities rather than trying to bring back the past.

20400 Reasons The World Needs An International Standard For Sustainable Procurement

ISO20400, otherwise known as the International Standard for Sustainable Procurement, is due to be published this month. Procurious recently interviewed Jean-Louis Haie, sustainable procurement expert, head of the Australian delegation for ISO20400, and guest speaker at the upcoming Women in Procurement 2017 conference in Melbourne.

“We are at a tipping point in terms of the sustainable procurement journey across the globe”, says Jean-Louis Haie. “Organisations spend between 40 per cent and 80 per cent of their revenue on the supply chain, but increasingly recognise that they can’t achieve their sustainability objectives without getting their suppliers to actively contribute.”

“CPOs who are serious about sustainability goals know that around half of those objectives can only be delivered by their suppliers. There’s no such thing as an effective sustainability program without a supply chain component.”

By nature, supply chains are international, which is why having an international standard is vital. “When you’re asking a supplier based in China to align with your business’ or your country’s standards, they simply don’t have the same standards and don’t speak the same language around sustainability. ISO20400 seeks to create a standard that will enable every organisation in the world, regardless of size, industry and location, to have a flexible guidance framework on sustainable procurement.”

Learning from France’s sustainable procurement bible

Jean-Louis says that it depends on the industry and the area of sustainability under discussion, but in general, governments around the world can learn from his home country (France) when it comes to implementing sustainable procurement. Three key milestones took place – in 2006, 2010 and 2012 – that illustrate France’s journey towards a national sustainable procurement standard.

“The first thing I would mention is that France has a National Procurement Code – a “bible” for procurement professionals that’s applied to all public procurement tasks. In 2006 they changed the Code to include some clear objectives and principles around sustainable procurement. This caused a lot of change, as governments, councils, public hospitals, water corporations etc were encouraged to look at environmental and social specifications when making purchasing decisions. The private sector followed to a certain extent. The point is that it’s a national Code, and highly centralised. I now live in Australia, and we don’t really have that here – the federal government, state governments and local councils are all pretty autonomous.”

In 2010, the ObsAR, a National Association for Sustainable Procurement was created in France in reaction to a crying need to share knowledge and experience around this important topic. “It’s a platform for public and private organisations to share lessons learned around sustainable procurement, through working groups, an annual conference, and ongoing discussions.

At the same time, the government started to get involved in making sure the big buying organisations (including private companies) manage their supply relationships with SMEs fairly. It created a Charter for Responsible Supplier Relationships, which described 10 commitments to be respected by signatory organisations. This initiative was a success and thousands of organisations follow its principles now. 2 years later, the Government transformed this Charter into a certification scheme, which was tested on a selection of 30 organisations, including some SMEs, multinational companies and government agencies.”

“The certification program includes fair payment terms, fair contractual clauses, checks on abuse of power, inclusion of social and environmental requirements, and more.”

While France’s sustainability journey is encouraging, Jean-Louis notes that supply chains are international. “These are international companies dealing with an international supply chain in a global economy”, he says. “No matter how rigorous the standards are in one country, the system can’t work unless there’s a similar standard in the country you’re sourcing from – hence the need for an international standard.”

What does ISO20400 include?

The Standard includes seven core subjects, such as the environment, fair operating practices, labour issues and human rights, with a range of subtopics under those, such as discrimination and gender inequality. “It provides the reader with a thorough description of all the potential sustainability issues and risks they may face when they want to put in place a contract and buy something. Then it’s the responsibility of the procurement professional to decide what the hot spots (risks) are for their particular procurement activity, using ISO20400 as a framework. The Standard provides a methodology to set priorities. What it doesn’t do is put more weight on any one subject over another – we’re not telling people that human rights are more important than the environment, for example.”

Bringing procurement and sustainability expertise together

“In my experience, procurement professionals struggle to work with sustainability experts. They should be best friends”, say Jean-Louis. “The trouble is that there’s no framework to enable these two groups of experts to speak the same language and work more effectively together. ISO20400 will provide a framework – or a bridge – to channel the discussion in plain English so they can understand each other.”

“For example, most companies have some sort of sustainable procurement code in place, which puts pressure on suppliers to comply. But they forget that a good many of these sustainability impacts are created by bad procurement practices. Look at the fashion industry, for example – impossible deadlines put pressure on suppliers, which causes them to abandon key guidelines such as working safely and not using child labour”.

Jean-Louis Haie is the founder of Planet Procurement and a guest speaker at Quest’s upcoming Women in Procurement 2017 conference in Melbourne, Australia.

How Our Consumption is Driving Global Warming

Global warming isn’t just about the cars we drive, or the industries we run. Our consumption is a much bigger driving factor that we might know.

This article was originally published on Farm Machinery Locator.

When we think about global warming many of us immediately think about cars and industry ruining the planet, but does this tell the whole story?

While transportation, including travel by road, sea and air, contributes over 13 per cent of our annual CO2 emissions there is another factor, which we may not initially consider, but which has a bigger impact.

Figures highlighted by Farm Machinery Locator show that there are nearly 8.3 million cows in the UK alone. These cattle provide us with hundreds of thousands of litres of milk, and thousands of pounds of beef every day. We often assume that agriculture is natural and therefore can’t be damaging to the environment, but that assessment is wrong.

The ever-increasing amounts of farm machinery – tractors, cultivators, combine harvesters and balers – for sale and in use, only adds to the current issue of rising average temperatures across the world, due to the pollution they expel.

So, whilst being natural, the negative connotations of farming and the agricultural industry mustn’t be brushed over. We will explain the role livestock plays in global warming too, below.

Livestock’s Contribution to Global Warming

In fact, if we look at figures published by the Food and Agriculture Organization of the United Nations, agriculture contributes 18 per cent of the total release of greenhouse gases worldwide, a much higher figure than that for transportation.

Emissions from cattle are particularly damaging because it is not CO2 that cows are releasing, but methane. Every single cow releases between 70 and 120kg of methane per year. While this is a greenhouse gas like CO2, its detrimental impact on the planet is 23 times higher than the negative impact of CO2.

In addition, livestock cause over two-thirds of the world’s ammonia emissions, and this greatly contributes to acid rain. When you consider there are over 1.5 billion cattle worldwide the damage quickly adds up.

Livestock figures are rising because of the general increase in our level of prosperity, which brings with it a higher demand for beef and milk. It’s not only emissions from cattle however that are causing problems to the planet. Intensive farming also leads to a whole range of other environmental issues.

Land Clearance and Deforestation

Livestock now use over 30 per cent of the world’s available land. Much of this is used for grazing although there is also a substantial portion which is utilised to grow feed.

A need for all this space has been a major contributor to deforestation, and with deforestation a further release of CO2 into the atmosphere occurs. This comes about due to two main reasons.

First, as the trees are cut down, the carbon dioxide they store is released. Second, fewer trees leads to lower levels of photosynthesis, a process which would normally help to absorb carbon dioxide.

In addition, once land has been cleared, if it is then overgrazed it runs the risk of turning to desert. This has already happened on 20 per cent of pastureland.

Drought

Cows also use a substantial amount of water. Each cow requires 990 litres of water to produce just one litre of milk. As global warming continues an upward trend, water becomes ever more precious.

Furthermore many of the antibiotics and hormones used to treat cattle can end up in drinking water. This can then lead to risks to human health.

Pollution

There will always be a level of pollution produced by livestock and ultimately this will wash down to sea level. Nutrient run off causes an overgrowth of algae which consumes oxygen in the sea.

This can kill coral reefs and lead to so called ‘dead zones’. One in the Gulf of Mexico is around 6,500 square miles in area. It has predominantly been caused by US beef production waste, which is carried down to the coast by the Mississippi River.

We all need to lower our carbon footprint. And when we realise how much of an impact agriculture has on the environment, we should consider reducing the amount of meat and milk we consume.

The planet’s population is growing substantially every year. The western diet, which is meat and dairy heavy, has a widening appeal, even in countries where fruit and vegetables used to be the mainstay of meals.

If we want to become greener in all areas of our lives we should all be a little more aware of the detrimental impact our own consumption of meat and milk is having and take steps to reduce it.

The Value Companies See With Sustainability Standards

As societal responsibilities grow, many organisations are turning to sustainability standards in order to demonstrate their supply chain transparency.

The discussions on Procurious reflect a number of questions procurement professionals face when trying to implement a sustainable procurement policy. Just what is sustainable procurement? Does it cost more to source sustainably? Have I got the time and resources to meet my own or my company’s targets? What value will sustainable sourcing bring to the business?

With the focus extending beyond environmental and sustainability issues to fair and ethical treatment of labourers and producers, the responsibility can be broad.

Increasingly, procurement managers are recommending sustainability standards as a way to ensure independent, transparent assurance of their supply chains. Partnering with a sustainability standard can help companies, which do not have the knowledge or capacity, to manage all aspects of responsible sourcing on their own.

Certification can work as a tool for managing the full range of issues. This is particularly the case for commodities, where environmental and social sustainability can be complex, and where the producer can be many links down the value chain.

Changing Procurement Process

However, making changes to well-established procurement processes is easier said than done. Businesses need to be clear on the value of choosing sustainability standards to meet their sustainable sourcing goals.

ISEAL Alliance interviewed existing users of sustainability standards – retailers, manufacturers, traders and others – on what they saw as the value of working with credible sustainability standards (certification systems), like those that are members of ISEAL.

It became evident that the value of certification was high, but it varied depending on the type of business, the sector, the geography, or other factors.  The interviews also showed that certification was not always valued in the way one might expect.

While market differentiation and increased sales were mentioned by a few companies, the potential value of a visible ‘ecolabel’ was never the primary reason for the partnership.  Instead it was often about supply chain challenges.

Companies revealed the value of sustainability standards to their business in five key areas:

  1. Making complex supply chains more understandable. This included providing better traceability, simplifying what is asked of suppliers by using agreed standards, and generating better relations with producers.
  2. Mitigating risk. Rigorous auditing, transparency of origin, and outsourcing assurance of responsible practices to local experts, helped companies mitigate risks of sourcing from complex supply chains.
  3. Ensuring sustainable supply for the whole industry. Several companies noted that by their investment in certification, they were strengthening the reputation and ensuring a sustainable future for the whole sector.
  4. Meeting consumer expectations. By communicating compliance with sustainability standards, companies said they were increasing consumer awareness of sustainable sourcing and creating market differentiation for their products.
  5. Reflecting a company’s values and heritage. As well as aligning companies’ goals with their values and maintaining trust, certification also provided a way to engage more deeply with employees.

Click here to read interviews with M&S, IKEA, Mars, Woolworths, Wilmar, De Beers, Domtar, Bumble Bee Seafoods and Tetra Pak.

Strengthening Commitment

ISEAL also recently created an online tool for companies to understand what good labels look like.  The site, called Challenge the Label, explores five universal truths of a credible claim or label. It aims to help procurement professionals have deeper conversations with their suppliers and partners, before choosing to develop or use a green claim on or off product.

Many companies also use their own codes of conduct or auditing programmes, and they see these as complementing their use of certification. While those interviewed agreed that the sustainability landscape is changing dramatically, they also said that their company’s commitment to certification will only deepen over time.

The goal for procurement professionals has to be to embed sustainability into everyday business. Using sustainability standards can help to deliver cost savings, address supply chain risks and ensure transparency. Making procurement decisions today in a manner which preserves resources for future generations as well as for future business makes good sense.