Green Purchasing Sustainable Supply Chains Aiden M Cohen

Green Purchasing & Sustainable Supply Chains Aiden M. Cohen Sustainability Senior Buyer Green Purchasing Program Coordinator City of Austin – Purchasing Office aiden. cohen@ci. austin. tx. us 512 -972 -4008 October 2009 1

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? 2

Aiden Cohen: My Background 1. Sustainability Senior Buyer City of Austin 2. Real Estate Development Southern California 3. Supply Chain and Lean Expert Aerospace Industry 3

City of Austin: Operational Overview • City of 920, 000 Residents; Greater Austin 1. 4 M 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: Ø www. ci. austin. tx. us/purchase/ 4

Vendor Registration Main Purchasing Website: www. ci. austin. tx. us/purchase/ Vendor Registration Website: www. ci. austin. tx. us/vss/Advantage Ø Ø Business Legal Name DBA as Appears on Invoices Commodity Codes Associated with Business Permanent Email Address Vendor Registration Help: 512 -974 -2018 5

Definition of Green Purchasing 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 6

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 7

es l. R cia So l& nta En vir on ip h ers me wn f. O to os l. C ta To po ns ibi lity Tenants of Best Value Contracts Effectiveness, Delivery, Availability Considering More than the Initial Purchase Price 8

City of Austin’s 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 Recognized as the: The Most Livable City in the Nation and The Best Managed City in the Country 9

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 10

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 11

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) 12

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. . . 13

Hazardous Substances 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 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 14

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 15

Air Quality • Outdoor pollutants cause lung disease and asthma • Indoor VOC levels 10 X 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 16

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. 25 M Gallons of Paint Sent to Landfills, Less than 1/2 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 17

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 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 18

Energy & Global Warming • 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 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 19

Doom & Gloom Recap: 4 Collapsing Ecosystems 4 Crumbling Infrastructure 4 Foundering Economy Are people really doing ‘green purchasing’ in these bleak times? YES! 20

Small Business Opportunities Ø Develop New ‘Green’ Businesses for Competitive Edge or Niche Ø Participate in City Educational Opportunities (i. e. Green Gardening, Small Business Development Program, SMBR, Trade Groups, etc. ) Ø 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 Ø 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… 21

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 22

Build a Responsible Purchasing Program Bottled Water Example 23

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. 24

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 5. How do we Measure the Benefits? 25

Green Can Save Green King County, WA } In 2008, King County, WA spent $54 M on qualified green goods: § Office Products = $7. 5 M § Operations & Maintenance = $650, 000 § Vehicles = $46 M § 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 26

Furniture 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 27

Green Cleaners 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-Labels Green Seal, Eco. Logo 28

Computers • 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 29 29

Greener Vehicle Fleets & Infrastructure $4 per Gallon Gasoline? !? San Jose, CA 2007 4 Increased Clean Vehicles 4 Tracked Ridership and Fuel $$ 4 Advocated within Industry 4 Mandatory Annual Reports Hybrids Cost More Initially but Save $ by: 1. Cutting fuel use by up to 50% 2. Having lower maintenance costs 3. 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 30 30

CFL & LED Lighting Washington D. C. saved $1. 5 M Over 5 Years First Christian Church used CFLs and T-8 lamps, LED Exit signs, and timers – Saving $6, 000 Annually 4 Typical CFL Saves $30 per Year 4 CFL Last 5 X to 20 X Longer 4 Look for Rebates 4 Require Energy Star for Appliances 31

Copiers, Printers, Fax Machines • Duplex Printing Copiers Can Reduce Paper By ~ 40% • Energy Star Lowers Energy ~ 60% • Energy Star or Eco. Logo for LEED Credit 32

Copy Paper City of Portland, OR 4 Reduced Usage by 15% 4 Meet or Exceed EPA 4 Aim for 30 -100% PCW 4 Prefer Chlorine-Free 4 Seek Alternative Pulp 4 Saved More Than $10, 000 in the 1 st year 33

Remanufactured Toner Cartridges 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 34

Remanufactured Toner: Washington D. C. 35

Green, Renewable, and Distributed Energy NJ Higher Education Partnership for Sustainability (NJHEPS) 4 Group Fuel-Cell Discount Saved More Than $340 k 4 Group Discount on Wind State of Wisconsin 4 Biggest state green power purchase in the country City of Austin 4 Largest Municipal Purchaser of Renewable Energy in the Country 36

Climate Initiatives & Purchasing: Energy Efficiency 37

Responsible Purchasing Policies Survey of 135 Governmental Purchasers: 4 Collectively spend ~$60 B Annually 4 2/3 Have ‘Green’ Purchasing Policies 4 86% Say Environmental Factors are “Very Important” or “Important” When Making Purchasing Decisions 4 Most Use Energy Star, LEED, Green Seal, and EPEAT 4 9 out of 10 will do MORE Green Purchasing in 2010 Download the free report: www. responsiblepurchasing. org 38

Fair Trade and Sweat-free Policies 4 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. ” 4 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. ” 39

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 40

7 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. 2. 3. 4. 5. 6. 7. The Sin of Fibbing The Sin of the Lesser of Two Evils The Sin of No Proof The Sin of the Hidden Trade-Off The Sin of Irrelevance The Sin of Vagueness The Sin of Worshiping False Labels http: //sinsofgreenwashing. org/ 41

The Shades of Green Claims green • Single product attribute, e. g. recycled • Single company attribute, e. g. HUB • Multiple green criteria greener • Multi-attribute green labels • Life Cycle Assessments greenest • Corporate responsibility ratings 42

The Best Green Claims 4 Life-Cycle Based Criteria 4 Balanced Stakeholder Development Process 4 Transparent Administration 4 Independent Product Verification 4 Multi-Tiered (e. g. bronze, silver, gold) 4 Continuously Improved 4 Independent Verification and Standards 43

Eco-labels: Do you know what these mean? 44

RPN: Responsible Purchasing Guides Product 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 45

Life-Cycle Analysis: News Flash! Wal-Mart: Requires Life-Cycle Analysis Eco-labeling on ALL Products 46

The Next Steps…Green Corporate Ratings Evaluation of companies, not just products… 47

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 48

Web-Based Tools: Responsible Purchasing Network (RPN) 49

Lifecycle Cost Analysis Lifecycle = P + (O+M+T+L+E) – S Where: P = Initial Purchase Price O = Operational Costs M = Maintenance Costs T = Training and Customization Costs L = Logistics Costs (Inventory, Transportation, Packaging) E = Environmental Costs (Disposal, Emissions, Permits) S = Salvage Value (Recycle, Scrap, Resale Value) 50

Green Savings: Calculate the Benefits Sustainable Purchasing Calculators Available: 4 ENERGY STAR for Electronics & Appliances 4 EPEAT for Computers 4 EPA for Green House Gases 4 Life-Cycle Analysis 4 RPN Calculators: Cleaning Supplies, Remanufactured Toner, Drinking Water, Fleet Vehicles, Lighting & More. 51

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. 52

Other RPN Calculators Available • Bottled Water Calculator compares costs and impacts of bottles of water vs. tap water • Cleaners Calculator Quantify the environmental benefits of using "green" janitorial services and products. • Computer Calculator Use calculators from EPEAT and Energy Star to measure the impact of computers. • Hybrid Calculator Use the Hybrid Calculator to compare hybrid electric (HEV) and conventional vehicles. • Lighting Calculators ENERGY STAR and CFL manufacturers measure the impact of lighting in terms of cost savings and mercury content • Office Electronics Calculators ENERGY STAR and EPEAT to measure the impact of equipment in terms of costs and energy use. • Paper Calculator Measure the environmental benefits of switching to recycled content copy papers. • Power Calculator Use these tools to compile data on environmental impacts of electricity consumption. • Toner Cartridges Calculator Compares costs and wastes associated with remanufactured cartridges 53

Green 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 54

Thank you. Questions? www. ci. austin. tx. us/purchase/ Aiden Cohen Green Purchasing Program Coordinator City of Austin – Purchasing Office 512 -972 -4008 aiden. cohen@ci. austin. tx. us 55