Collaborating for a More Sustainable Supply Chain in Public Procurement

sustainability

Government and private industry can work together to create more sustainable supply chains. That’s the foundational belief of a General Services Administration (GSA) initiative called the Sustainable Supply Chain Community of Practice. It’s a community in which key stakeholders share insights and information on how to create greener supply chains while reducing inefficiencies and risk. Here’s a report on the progress to date.

On October 5, 2009, President Obama signed an executive order entitled “Federal Leadership in Environmental, Energy, and Economic Performance.” Rather than debating the contentious issue of climate change, the policy statement made greenhouse gas emissions (GHG) reductions a priority for the government and tasked the General Services Administration (GSA), the government’s procurement agency, to reduce the GHGs from the federal supply chain. On the surface, the order appeared to fall in a long line of Executive Orders, issued under different administrations, that addresses sustainability primarily through an environ- mental lens. Clearly, environmental protection is a societal good and accordingly, the government should lead the way.

The surprising result from implementing the order, however, has been the realization that businesses have found a strong economic case for sustainability beyond merely responding to environmental mandates. Increasingly, emphasis on sustainable supply chains, ones that reduce resource-related inefficiencies and risks, are seen as a competitive necessity. It is this awareness that is driving leading businesses—from Coca Cola to Johnson Controls to Dell and Alcoa—to employ sustainable supply chain practices. Accordingly, GSA announced in March 2012 at a Council on Environmental Quality (CEQ) White House event the launch of a Sustainable Supply Chain Community of Practice. The goal of the initiative: to provide federal agencies and their small business suppliers an avenue to learn from companies that have some of the most advanced supply chains in the world.

Sustainability represents an ongoing journey rather than a destination—even among global leaders. And at this early stage for the federal government, we can only explain the origins and the emerging sketch of the future vision. But, by drawing upon the experiences of public and private organizations the world over, we hope to demonstrate the value of the path now taken.

Sustainability Through an Environmental Lens

Environmental sustainability has been a goal of administrations from both sides of the aisle. While Bill Clinton first used the term “Greening the Government” in his 1993 Executive Order, the origins of the Council on Environmental Quality trace back to 1969 and the administration of Richard Nixon, who then went on to establish the Environmental Protection Agency in 1970—the same year as the first “Earth Day.”

The focus has varied over time from pollution control to energy conservation to recycling, but every president since Nixon has issued executive orders related to environmental sustainability. Ford clarified agency responsibilities for energy and conservation. Carter challenged federal agencies to consider environmental impacts abroad. Reagan delineated government responses to environmental damage. George Bush Sr. encouraged federal agencies to recycle and consider recycling in procurement practices. Clinton’s “Greening” proclamation built upon his predecessor’s recycling mandate and expanded the scope to include waste reduction. George W. Bush extended a mandate by Clinton regarding protection of children from environmental risk.

Obama’s 2009 Executive Order builds upon one by his predecessor, George W. Bush, entitled “Strengthening Federal Environmental, Energy, and Transportation” and for the first time implies a “triple bottom line” approach to sustainability: environment, society, and economics. Though framed as a broader, more balanced view than just “green,” the order takes an explicit stance on the need for federal agencies to reduce greenhouse gas emissions and requires them to complete yearly GHG emissions inventories, including a voluntary tallying of vendor GHG emissions (Scope 3 supply chain emissions)—a massive undertaking. This focus on GHG’s prompted the launch of the precursor to the Sustainable Supply Chain Community of Practice, the GreenGov Supply Chain Partnership Program.

In November 2010, the Council on Environmental Quality and GSA jointly launched the GreenGov Supply Chain Partnership Program as an incentive for federal suppliers to complete Greenhouse Gas (GHG) emissions inventories. As part of the program activities, CEQ and GSA held listening sessions around the country to learn from federal suppliers the benefits and challenges they had in tracking GHG emissions throughout their supply chain. The feedback was surprising. Many of the largest suppliers were not just tracking and publicly reporting GHG emissions as part of corporate social responsibility (CSR) efforts; they were also starting to engage their suppliers. Along with GHGs, these same “top 100” suppliers were actively identifying and addressing additional environmental impacts within their supply chain. The listening sessions uncovered that leading-edge companies already recognized the cost savings and risk mitigation opportunities associated with a sustainable supply chain and had begun treating sustainability as a strategic priority.

This is a recent transformation, however. According to a Boston Consulting Group survey of 3,000 commercial managers throughout the world, 70% of companies had placed sustainability on their management agendas by 2011, but most had done so quite recently. In fact, 20% had done so since the Obama administration began. Moreover, looking back a full decade, less than 15% of companies considered sustainability a strategic priority.

For small businesses the findings were quite different. Though willing to join the charge for a more sustainable supply chain, many lacked the expertise and tools to measure greenhouse gas emissions. Drawing upon these insights, CEQ and GSA went back to the drawing board and launched the Sustainable Supply Chain Community of Practice in March of 2012.


In Part 2 of this series, we’ll look at building a community of practice. 

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