Mr. Weissman

Eco-Friendly Practices

Selecting Environmentally Responsible Vendors

By Arthur Weissman, President and CEO, Green Seal, Inc.

Why Green Your Supply Chain?

The benefits of incorporating environmental responsibility into your purchasing decisions can impact your bottom line and property efficiency in a number of ways, including:

• Ensuring greater consistency in supplier performance;
• A reduction in long-term risk and threats to your property;
• A reduction in packaging, transport, waste treatment, and purchasing costs; and
• Improved vendor relations and branding with your guests and community.

Most importantly, however, is that incorporating environmental responsibility into your purchasing decisions is not that different from the traditional purchaser's interest to minimize the cost of transportation, waste management, and time spent in managing stock. According to Deloitte"...maximizing transportation efficiency, reducing fuel and energy consumption, minimizing inventory and waste, and purchasing based on Total Cost of Ownership were considered leading supply chain practices, long before green considerations like carbon emissions and sustainability entered the equation." In addition to benefits for individual properties, your suppliers can also benefit from participating in your green supply-chain program in some of the following ways:

• Lower production costs by adoption of "just-in-time production" methods;
• Lower liabilities due to lower levels of stock in reserve;
• Better relationships with regulatory agencies due to compliance with client programs; and
• Streamlined management systems.

In addition to these business-to-business returns, local communities will also benefit indirectly though your adoption of a green supply chain program in the following ways:

• Increased levels of local sourcing for goods and services which can reduce the transportation impacts generated by your property or chain;
• A reduction in virgin resource use by your property and suppliers - (i.e., water, timber, soil, and otherresources);
• Use of more durable goods that can be refurbished and used by community groups a second time;
• Reduction of harmful substances released into public utility systems by your property;
• An increase in packaging/waste take back logistical planning and practice within the community; and
• New business development by local companies, either as direct suppliers to your property or as secondary retailers/processors of your waste material.

While this listing of benefits could go on, the key to remember is that each supplier relationship you have is unique to the type of good or service the supplier provides to your property, staff, and guests. The earlier that you and your executive team can engage your suppliers in discussions about environmental responsibility, the better able both parties will be to develop metrics and incentives that are mutually beneficial and also help create a competitive advantage for both.

Getting Ready to Go Green with Your Suppliers

Before approaching your suppliers, it would be good to get an official stamp of approval for your greening efforts from your senior management team or executives. While your team is developing an environmental purchasing policy for your property, you should keep in mind your staff's ability to provide direct on-the-ground support to suppliers, acknowledge the wide range of supplier competencies, recognize external incentives for greener supplier performance, and gauge your staff's ability and access to work and source contracts with local suppliers.

Once you and your management team have assessed how far you are willing to have your staff engage with suppliers, the next step is to start talking with your suppliers to set realistic environmental purchasing targets. Besides a policy and application form, it would help to have your management team develop a self-survey or check-list that suppliers can use to make sure they are in compliance with the goals and requirements stated in your policy. For large chains, hotels, or resorts, it would be a good idea to have your environmental policy and supplier forms publicly available, as in the Hewlett Packard Company's "Supply chain SER Conformance" page of their website. Public access to this information not only improves your chain's image with guests and the community, but it can also streamline the registration, review, and recognition process for suppliers you work with.

There are a variety of online resources where specific green product specifications can be found, including Green Seal's standards page, the Responsible Purchasing Network, and the Center for the New American Dream. Many of these online environmental specification templates can be helpful in greening your spot purchasing and competitively based contracts. Since these types of supplier relationships have a relatively short turnover rate before re-tendering, the inclusion or modification of environmental specifications within revised tenders will be easy to implement. Another option could be to consider leasing contracts instead of purchasing contracts for large equipment or appliances needed at your property.

For your other long-term supplier contracts with preferred suppliers or strategic partners, you might want to consider performance-based modifications to your contract agreements. By incorporating performance metrics into your agreements with key vendors, there is more flexibility for vendors to adjust and modify their operations to meet mutually set environmental performance goals to accomplish a green agenda.

To keep the momentum going once you have suppliers participating in your environmentally responsible purchasing program, some key steps that you will want to follow include:

• organizing your senior leadership's participation in the program's inaugural activities
• a letter confirming your property's or chain's selection of suppliers for participation in the program
• identifying a core team of your staff (and possibly suppliers) that will review the progress being made in the program's implementation
• planning for training and mid-term assessment of your environmental goals with your suppliers
• tracking and publicizing the success of the program, and
• celebrating the attainment of your purchasing goals with relevant suppliers and the local community.

Greening your supply chain is not as daunting as it would first appear, since there are now a multitude of environmentally responsible products available on the market, with very little if any price difference compared to traditional products. As part of their green business programs, many cities are also offering incentives to local businesses (either as technical support or as tax deductions) who implement environmental purchasing polices. The important thing to remember is that by developing and implementing an environmentally preferable purchasing policy with your suppliers, you are reducing the impact on the environment not only from your property, but also from your suppliers. What could be better for your local community and for the environment?

Preliminary research for this article was done by Rani A. Bhattacharyya, Research Assistant to the CEO, Green Seal, Inc. She holds an M.S. in Recreation Parks and Tourism Management from Western Illinois University and has assisted rural communities in the United States and internationally with tourism development projects.

Arthur B. Weissman, Ph.D., is President and CEO of Green Seal, Inc. He has experience in environmental science, policy, and standard-setting in public and private sectors. He has led the non-profit's resurgence as a force to make the economy more sustainable. He served as an international convener in developing the ISO 14000 standards for environmental labeling, and was the first Chair of the Global Ecolabeling Network. He has developed policy for the Superfund waste-cleanup program, served in the U.S. Senate as a Science Fellow, and worked for The Nature Conservancy. Mr. Weissman can be contacted at 202-872-6400 or aweissman@greenseal.org Extended Bio...

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