Green Procurement: Making Sustainability Viable in a Tough Economy
Green?in its duality no other word better reflects opposing forces at work on today’s campuses. For financial leaders, “green” is in short supply as colleges and universities face a financial storm of historic proportions. Endowments are declining, legislative allotments are decreasing, and tuition increases threaten to make higher education inaccessible. At many universities, budget cuts are rampant, causing more than a few leaders to question the very sustainability of the institutions they serve.
At the same time, “green” is the call to action?the demand that colleges and universities utilize their ability to shape society and accelerate the adoption of environmentally-friendly practices, not merely through discussion, but action that makes their widespread application viable. At stake is the answer to a fundamental question: If higher education does not adopt a sustainable approach, who will?
The time for talk is past. Now is the time for higher education to bridge the gap between green ideals and the fiscal policies that govern campuses. Only then will education be able to show that sustainability is not only “the right thing to do,” but is also smart business. Fortunately, higher education has within its grasp the ability to make sustainability, and thus green procurement unremarkable?to make it business as usual. And playing a key role is a department whose impact has only recently begun to be realized?procurement.
Among the numerous departments and business functions that comprise the modern university, one has direct and immediate control over spending?the procurement or purchasing department. Once considered a bureaucratic necessity, procurement today is a driver of savings and efficiencies. Modern eprocurement technologies not only eliminate inefficient paper-based purchasing processes, but it also enables universities to gain unprecedented visibility and control over how and with whom their money is spent.
With that visibility, it’s now easy for procurement professionals to aggregate an institution’s green buying power, determine where it’s applied and use the resulting data to negotiate better pricing with suppliers. At most universities this strategic approach delivers savings of between five and 20 percent. And unlike savings in other areas such as payroll, savings on the purchase of goods and services go straight into additional research, instruction, and community support. Procurement, then, becomes a resource multiplier.
For green procurement leaders, these same capabilities can be used to create fiscal policies that bridge the gap between wanting to help the environment and actually doing it. In this way, procurement has the power not only to make an institution’s sustainability efforts viable, but more attractive financially than the alternative.
Recently the National Association of Educational Procurement and SciQuest conducted the first survey of procurement leaders at colleges and universities nationwide. The results indicate that procurement’s critical role in making sustainability really work is increasingly recognized and indicate that higher education is nearing the tipping point. Most importantly, they reveal that higher education has the ability to make large-scale sustainability initiatives viable and their application widespread. And plans are already underway to put these efforts into effect.
Specifically, the survey found that 62 percent of colleges and universities have a campus-wide sustainability plan in place and 43 percent already report that these efforts reduced costs and liability. In contrast, only 24 percent currently have the green purchasing policies in place needed to support these efforts, but nearly of half of respondents plan to put them in place over the next year. And it is there where the greatest opportunities and the tipping point lies.
“Money talks,” says John Riley, executive director of procurement and business services for Arizona State University and president of the National Association of Educational Procurement (NAEP). “Higher education wields real financial clout and even a small university holds within its grasp significant buying power. Once we tie sustainability to spending?as we do when green purchasing policies are put in place?doing what’s right for the environment simply becomes smart business that saves money. And that’s when we can make a real difference.”
Riley points to a recent television commercial from IBM in which an executive skeptically notes that while the green proposal looks fine “the people I report to don’t eat granola.” Upon learning of its impact on the bottom line he quickly asks where to sign.
“At most universities, strategic sourcing practices such as those made possible by eprocurement are notably absent,” adds Riley. “For proponents of sustainability, that’s actually good news, because the savings an automated, strategic approach makes possible make it very easy to create green purchasing programs that are less expensive than the protocol they replace.”
So exactly how does it work? Consider a few ways that schools are already using their spending to green the campus community:
? Support green suppliers: Today’s eprocurement technologies, in which the buyer shops online in one transparent system, enable procurement departments to grade suppliers on their environmental practices, such as use of recycled materials. Using this data to confer preferred supplier status, eprocurement-enabled purchasing departments can funnel spending to those that offer green products and achieve the volumes at which environmentally friendly products become less expensive than the alternative.
? Decrease energy costs and landfill use: As the department that signs off on purchases, procurement can mandate the use of energy efficient appliances and equipment, such as those that are Energy Star rated, or require the use of recycled packaging materials.
? Minimize the carbon footprint by lowering transportation impact: Because purchases made with eprocurement occur through one system, orders can be packaged in bulk, with some schools simply informing suppliers that deliveries will only be received on certain days, and others waiting until trucks are full.
? Eliminate paperwork: Procurement can dramatically eliminate the use of paper. In the first five months after it implemented eprocurement, Virginia Polytechnic Institute processed 152,000 electronic purchase orders that would have normally been done on paper.
? Communicate green ideals: Because faculty and staff are users of eprocurement systems at schools where they are deployed, the actual eprocurement solution can be a powerful communications tool. For example, at the University of California, San Diego (UCSD), users who purchase a computer are first prompted on what to do with the old equipment?helping UCSD not only decrease landfill use, but also inform staff of recycling practices and guidelines.
These of course are only some of the many ways procurement organizations can significantly increase the scope and impact of sustainability programs. Most importantly, by drawing a direct connection between green and the business of running a university, procurement professionals have the ability to take sustainability mainstream.
“Ultimately, it can be argued that what you buy and what you do with it when it’s no longer needed is what sustainability is all about,” said Linda Collins, senior director of procurement and contracts at UCSD. “With modern technologies procurement departments have the ability to make green products and services very attractive from a financial perspective. And that’s how we’ll ultimately make it possible for being green to become business as usual.”
Brian Yeoman is director of sustainable leadership at the National Association of Educational Procurement. Eric Zoetmulder is director of product marketing at SciQuest.