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Green Purchasing & Sustainable Supply Chains
Aiden M. Cohen
Sustainability Senior Buyer
Green Purchasing Program Coordinator
City of Austin – Purchasing Office
512-972-4008
October 2009
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Seminar Agenda
1. Introduction – My Background
2. Overview of the City of Austin
3. Overview of Sustainability in Austin
4. Best Value Contracts
5. Why Green? Problems and Solutions
6. Benefits of Responsible Purchasing
7. Eco-Labels, Calculators & Life-Cycle Analysis
8. Questions?
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Aiden Cohen: My Background
1.Sustainability Senior BuyerCity of Austin
2.Real Estate DevelopmentSouthern California
3.Supply Chain and Lean ExpertAerospace Industry
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City of Austin: Operational Overview
• City of 920,000 Residents; Greater Austin 1.4M People
• 300 Buildings; 6000 Structures
• 12,000 Employees
• Municipally Owned Electric Utility, Water Utility, Convention Center, Airport
• 30 Departments, Multiple Divisions in Each Dept.
• Register to do Business with the City:
www.ci.austin.tx.us/purchase/
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Vendor RegistrationVendor Registration
Main Purchasing Website:www.ci.austin.tx.us/purchase/
Vendor Registration Website:www.ci.austin.tx.us/vss/Advantage
Business Legal Name DBA as Appears on Invoices Commodity Codes Associated with Business Permanent Email Address
Vendor Registration Help: 512-974-2018
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Green purchasing includes the acquisition of products or services that have environmentally preferable characteristics such as…
1. Recycled Content or Easily Recyclable
2. Bio-based or Bio-Degradable
3. Energy and Water Efficient Products
4. Use Alternative Fuels or Renewable Energy
5. Eliminate Hazardous or Toxic Chemicals
6. Locally Produced
Definition of Green Purchasing
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What are We Really Talking About?What are We Really Talking About?
Green Goods and Services Must:
1) Greatly Reduce or Eliminate Negative Ecological Impacts
2) Must be Commercially Available
3) Provide Superior Performance at Lower Costs According to Lifecycle Analysis
4) Improve the Productive and Responsible Use of Financial and Natural Resources
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Tenants of Best Value ContractsTenants of Best Value Contracts
Env
iron
men
tal &
Soc
ial R
espo
nsib
ility
Total Cost of O
wnership
Effectiveness, Delivery, Availability
Considering More than the Initial Purchase Price
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Recognized as the:Recognized as the:
The Most Livable City in the Nation
and
The Best Managed City in the Country
City of Austin’sCity of Austin’s Sustainability Programs Sustainability Programs
Austin’s Green Purchasing Program Supports:
1. Water and Energy Conservation Initiatives
2. Purchase of Environmentally Preferable Products
3. Waste Stream Management – Reduced Solid Waste
4. Attracting ‘Green Entrepreneurs’ and Small Business Development
5. Cost Savings, Innovation, and Process Efficiencies
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Austin Climate Protection Program
Climate Protection Plan: Adopted Feb. 2007
• City Operations and Vehicle Fleet Carbon Neutral by 2020
• Reduce Climate Impact of Electricity Generation
>> Renewable Energy
>> Conservation
>> Power Plant Efficiencies
• Engage Community to Reduce Austin’s Carbon Footprint
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Austin Zero Waste Program
Zero Waste Plan: Adopted Jan. 2009
• 90% Reduction in Solid Waste by 2040
• Promote Market for and Use of Recycled Materials
• Use of Low Emissions Natural Gas Vehicles
• Increase Participation in Single-Stream Recycling
• Incentivize to Businesses & Manufacturers to Reduce
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New & Existing Buildings & Green Infrastructure
Leadership in Energy & Environmental Design (LEED)
• First Municipal Green Building Program 25+ Years Ago
• New Buildings Must be Certified LEED-Silver
• Optimize Existing Building Operations (EBOM)
• Use of Locally Sourced and Recycled Materials
• Green Building Techniques and City Codes
• Improve Interior and Exterior Air Quality (Clean Cities)
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Why Green Purchasing? A Reminder…
Highlight Problems and Potential Solutions:
…Describe Product and Service Categories…
…Avoid Common Pitfalls…
…Examples of Successful Implementation…
…Provide the Tools to Learn More and Measure your Impact...
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The Problem:
• Millions of Dollars Spent on Hazardous Waste Disposal
•1 in 3 Cleaners Contain Harmful Ingredients
• Hazardous Materials in everyday products linked to brain, thyroid, reproductive problems
Hazardous Substances
Minneapolis, MN 3-year “Green” Cleaning Program:
• Cost Savings from Metered Dilution System
• Fewer Sick Days for Custodial Staff
• Reduced Solid and Hazardous Waste
• Improved Indoor Air Quality (IAQ)
• Smaller Storage Footprint (Less Inventory)
• Less Packaging and Transportation
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Water• Toxic Run-off Causes Water Turbidity &
Kill Aquatic Ecosystems
• Carpet Production ~10 gal Water per Yard
• ~40% of Bottled Water is Tap Water
• 3 Gallons of Water to Bottle 1 Gallon
Solutions:
• Low-flow Toilets and Showerheads
• Water Fountains and Reusable Containers
• Products that Use Less Water in Manufacturing Process
• Irrigation Optimization
• Water and Waste Water Treatment and Pumping is Energy Intensive – Water Conservation Programs
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Air Quality
• Outdoor pollutants cause lung disease and asthma
• Indoor VOC levels 10X higher than Outdoors
• Ground-level Ozone & Smog don’t respect City and State Borders
Solutions:
• Low-Emissions Vehicles and Alternative Fuels (Propane Landscaping Equipment)
• Energy Efficient Lighting, Electronic Equipment, and Sensors
• Locally Sourced and Produced Products (Less Transportation)
• Energy Optimization, Conservation, and Building Programs
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Solid Waste - Landfills
• Many Landfills are Running Out of Space
• 70% of Heavy Metals in Landfills from Electronics
• 70% of Mercury-Lamps are Not Recycled
• Old Electronics Sent Overseas Where Environmental Laws are Lax
• Approx. 25M Gallons of Paint Sent to Landfills, Less than1/2 Properly Handled
• California Buys Enough Carpet to Cover 47 Miles of 4-Lane Highways Each Year
• Approximately 90% of Single-Serve Water Bottles Sent to Landfills
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Biodiversity & Habitat
• More than 11,000 Species Near Extinction
• 1 in 5 Bird Species Threatened
• Wetlands Reduced by 50% in Past Century
• 50% Reduction in Forest Cover over 200 Years
• 60% of Fisheries Below Sustainable Capacity
Solutions:
• Fair Trade Policies with Countries or Companies that Promote Environmental Responsibility
• Product Sustainability as Part of Award Criteria
• Locally Sourced and Produced Products
• Champion Alternatives to Hazardous Chemicals and Petroleum Products
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• Electronic Equipment Consumes 26% of Electricity in Offices
• Lighting is ~7% of U.S. Electricity Consumption
• More than 50% of Electricity is from Coal
• 95% of Vehicle Fuel is Petroleum-based
• Forecast Temperature Increase 10° by 2100
Energy & Global Warming
Solutions:
• A report from Government Technology estimates that energy-efficiency initiatives can yield $1.5 million in yearly savings for an average annual IT budget of $74.6 million and average IT energy costs of $8.9 million annually.
• Use Best Value and Life-Cycle Analysis to Incorporate Sustainability Criteria into New Contracts
• Champion Alternatives to Hazardous Chemicals and Petroleum Products
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Doom & Gloom Recap:
Collapsing Ecosystems
Crumbling Infrastructure
Foundering Economy
Are people really doing ‘green purchasing’ in these
bleak times? YES!
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Small Business Opportunities
Develop New ‘Green’ Businesses for Competitive Edge or Niche
Participate in City Educational Opportunities (i.e. Green Gardening, Small Business Development Program, SMBR, Trade Groups, etc.)
Compete with Larger, More Established Firms
1. Reduce Costs through Conservation Best Practices
2. Offer Innovative Green Products or Services
3. Link to City’s Sustainability Initiatives
Attract Investment Capital with Business Plans that Save Water, Energy, Money, and Reduce Environmental Impacts
Develop a Competitive Advantage with Green as a Core Strategy…
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Community Benefits of Green Purchasing
• New Green Collar Jobs and Growth Companies
• Attract Intellectual and Financial Capital
• Avoid Greenhouse Gas & Ozone Emissions
• Divert Landfill Waste – Longer Landfill Life
• Encourage New Business to Use Recycled Waste Stream
• Communicate to the Vendor Community with One Voice
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Lean Six Sigma: Reducing Waste
7 Types of Institutional Waste
D = Defects (Low Quality and Rework)
O = Over Specification (Too Specific, or Inflexible for Alternatives)
T = Transportation (Keep it Local When Possible)
W = Wait Time
I = Inventory (Standardization of Common Products)
M = Motion
P = (Over) Production
Continuous Improvement Philosophies Can be Implemented While Protecting the Integrity of the Purchasing Process.
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Green? Absolutely. Here’s what’s driving it:
1. Green Purchasing Acts as a Catalyst to Save Money
and Implement Best Practices
2. Energy Efficiency & GHG Mitigation Policies
3. Responsible Purchasing Policies at All Levels of
Government
4. Social Responsibility Initiatives
How do we Measure the Benefits?
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Green Can Save GreenKing County, WA
In 2008, King County, WA spent $54M on qualified green goods:
Office Products = $7.5M
Operations & Maintenance = $650,000
Vehicles = $46M
Recycling Services = $90,000
Saved $837,000 compared to conventional goods!
Asphalt and Concrete Reuse = $300,000
Toner Cartridges = $250,000
Re-tread Tires = $250,000
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Furniture Repair: NYCFurniture Repair: NYC
New York City - Saved Over $100,000
• Contracted with a Local Firm for $15,000/year to Repair Office Furniture
• 1000 Pieces, 66 Tons Avoided in 2 Years
• $10,000/year in disposal costs avoided
• Local Jobs Created
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Santa Monica, CA
• Saved 5% by Implementing Green Cleaning
• Reduced Sick days & Improved Worker Health and Performance.
Chicago Public Schools, State of Massachusetts, City of New Jersey, Alameda County, Montgomery County, City of Minneapolis, Austin Convention Center
Eco-LabelsGreen Seal, EcoLogo
Green Cleaners
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• Specify EPEAT registered machines
• Save up to 60% of energy use
• Avoid hazardous waste disposal
• Reduce material waste and water pollution
• Earn recycling income (ARS)
• Accrue tax breaks for donations
Computers
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Greener Vehicle Fleets & Infrastructure$4 per Gallon Gasoline?!?
San Jose, CA 2007
Increased Clean Vehicles
Tracked Ridership and Fuel $$
Advocated within Industry
Mandatory Annual Reports
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Hybrids Cost More Initially but Save $ by:
1. Cutting fuel use by up to 50%2. Having lower maintenance costs3. Yielding a higher resale value
For more info on hybrids: www.newdream.org/procure/hev.pdf
Washington State set minimum fuel-efficiency standards (30 MPG) and restricts purchases and use of SUVs by state agencies
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CFL & LED Lighting
Washington D.C. saved $1.5M Over 5 Years
First Christian Church used CFLs and T-8 lamps, LED Exit signs, and timers – Saving $6,000 Annually
Typical CFL Saves $30 per Year
CFL Last 5X to 20X Longer
Look for Rebates
Require Energy Star for Appliances
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• Duplex Printing Copiers Can Reduce Paper By ~ 40%
• Energy Star Lowers Energy ~ 60%
• Energy Star or EcoLogo for LEED Credit
Copiers, Printers, Fax Machines
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City of Portland, OR
Reduced Usage by 15%
Meet or Exceed EPA
Aim for 30-100% PCW
Prefer Chlorine-Free
Seek Alternative Pulp
Saved More Than $10,000 in the 1st year
Copy Paper
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King County, WA:
• Saved $275,000 in 2007 Using Remanufactured Instead of OEMs
• Remanufactured Costs 30-60% Less than OEMs
• No Up-front Costs – Save Immediately
• Cut 5-9 lbs of Waste per Cartridge
Remanufactured Toner Cartridges
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NJ Higher Education Partnership for Sustainability (NJHEPS)
Group Fuel-Cell Discount Saved More Than $340k
Group Discount on Wind
State of Wisconsin
Biggest state green power purchase in the country
City of Austin
Largest Municipal Purchaser of Renewable Energy in the Country
Green, Renewable, and Distributed Energy
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Responsible Purchasing Policies
Survey of 135 Governmental Purchasers:
Collectively spend ~$60B Annually
2/3 Have ‘Green’ Purchasing Policies
86% Say Environmental Factors are “Very Important” or
“Important” When Making Purchasing Decisions
Most Use Energy Star, LEED, Green Seal, and EPEAT
9 out of 10 will do MORE Green Purchasing in 2010
Download the free report: www.ResponsiblePurchasing.org
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Fair Trade and Sweat-free Policies
NYC Resolution 762 Fair Trade Resolution: “ … the Council of the
City of New York strongly encourages the purchase of Fair-Trade
certified coffee, especially by City agencies that use taxpayers’
money to purchase coffee.”
Portland, OR Sweatshop Free Procurement Policy & Code of
Conduct for Apparel Contractors “… procure uniforms and clothing
in a manner that integrates sweatshop free procurement practices
that include social equity, fiscal responsibility, and community and
environmental stewardship.”
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3 Responsible Purchasing Principles:
1. RECOGNIZE GREENWASH: Rely on life-cycle
assessments or third-party standards, not on unverified
supplier claims
2. STANDARDIZE PURCHASES: Use spending power to
reduce costs, make environmentally preferable products
cost-competitive
3. CALCULATORS: Evaluate total costs, wastes eliminated,
and other benefits
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7 Sins of Green-Washing7 Sins of Green-Washing
Green-wash (green’wash’, -wôsh’) – verb: the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.
1. The Sin of Fibbing2. The Sin of the Lesser of Two Evils3. The Sin of No Proof4. The Sin of the Hidden Trade-Off5. The Sin of Irrelevance6. The Sin of Vagueness7. The Sin of Worshiping False Labels
http://sinsofgreenwashing.org/
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The Best Green Claims
Life-Cycle Based Criteria
Balanced Stakeholder Development Process
Transparent Administration
Independent Product Verification
Multi-Tiered (e.g. bronze, silver, gold)
Continuously Improved
Independent Verification and Standards
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RPN: Responsible Purchasing GuidesProduct Categories:
Bottled Water Carbon Offsets Cleaners Computers Copy Paper Fleets Vehicles Fluorescent Lights Graffiti Remover Green Power Office Machines Paint Remanufactured Toner Tires, Wheel Weights
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Life-Cycle Analysis: News Flash!
Wal-Mart: Requires Life-Cycle Analysis Eco-labeling on ALL Products
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Cooperative Spending: Use Group Purchasing
Some of the Cooperative Contracts Available:
U.S. Communities, TXMAS, DIR, GSA, Inter-locals
U.S. Communities:
18 contracts aggregate massive purchasing power
Open to Local & State Governments, Schools, Colleges, and
Nonprofits
Use the RPN database to find green certified cleaners &
copy papers on U.S. Communities contracts
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Lifecycle Cost AnalysisLifecycle Cost Analysis
Lifecycle = P + (O+M+T+L+E) – S
Where:
P = Initial Purchase PriceO = Operational CostsM = Maintenance CostsT = Training and Customization CostsL = Logistics Costs (Inventory, Transportation, Packaging)E = Environmental Costs (Disposal, Emissions, Permits)
S = Salvage Value (Recycle, Scrap, Resale Value)
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Green Savings: Calculate the Benefits
Sustainable Purchasing Calculators Available:
ENERGY STAR for Electronics & Appliances
EPEAT for Computers
EPA for Green House Gases
Life-Cycle Analysis
RPN Calculators: Cleaning Supplies, Remanufactured
Toner, Drinking Water, Fleet Vehicles, Lighting & More.
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GHG and Carbon Calculators
www.ghgprotocol.org/calculation-tools/all-tools
The Greenhouse Gas Protocol Calculation Tools - World Resources Institute’s (WRI) and the World Business Council for Sustainable Development’s (WBCSD) work in conjunction with the Corporate Accounting and Reporting Standard for calculating a GHG inventory.
www.carbonfund.org/business/calculator
The Carbonfund.org business calculator measures office emissions based on utility bills, number of employees, or office space. Businesses can also use the calculators to measure emissions from employee commutes, owned fleets, travel, events, paper purchases and shipping.
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Other RPN Calculators Available• Bottled Water
Bottled Water Calculator compares costs and impacts of bottles of water vs. tap water
• Cleaners CalculatorQuantify the environmental benefits of using "green" janitorial services and products.
• Computer CalculatorUse calculators from EPEAT and Energy Star to measure the impact of computers.
• Hybrid CalculatorUse the Hybrid Calculator to compare hybrid electric (HEV) and conventional vehicles.
• Lighting CalculatorsENERGY STAR and CFL manufacturers measure the impact of lighting in terms of cost savings and mercury content
• Office Electronics CalculatorsENERGY STAR and EPEAT to measure the impact of equipment in terms of costs and energy use.
• Paper CalculatorMeasure the environmental benefits of switching to recycled content copy papers.
• Power CalculatorUse these tools to compile data on environmental impacts of electricity consumption.
• Toner Cartridges CalculatorCompares costs and wastes associated with remanufactured cartridges
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Green Purchasing SummaryGreen Purchasing Summary
• Catalyst for Cost Savings and Implementation of Best Practices
• Achieve City’s Environmental and Social Responsibility Missions
• Cost Neutral, Reduces Waste, and Can Save $$ While Being Environmentally and Socially Responsible
• Creates Local, Well-Paying, Sustainable Jobs and Industries
• Enhances Employees and Community Health and Reduces Healthcare Costs
• Consistent with Our Goal of Being a World-Class “Green City”
For more info, Aiden Cohen, Sustainability Senior Buyer, at 972-4008
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Thank you. Questions?
www.ci.austin.tx.us/purchase/
Aiden Cohen
Green Purchasing Program Coordinator
City of Austin – Purchasing Office
512-972-4008