Sourcing/Procurement Trends
Most Read
Most E-mailed
E-mail Article
Print Article
Green Procurement Still a Work in Progress
Awareness growing of Procurement's environmental impact, but few companies incorporating green strategies into their purchasing, BrainNet study finds
Bonn, Germany — July 17, 2007 — Despite growing awareness of the need to safeguard ecological resources, few companies are putting this principle into practice in their buying behaviors, according to a recent study by consulting firm BrainNet.
Given global climate change and the pollution of the environment, most companies are no longer asking whether they want to do something to protect the planet, but rather are considering what they can do.
Procurement policies could have a significant impact on a company's environmental "footprint," given that somewhere between 50 and 70 percent of a company's overall costs originate from purchasing.
However, "green purchasing" so far has had no standard definition. Generally speaking, it is understood to mean the purchase of products and services with minimal negative effects on the environment. This relates to the entire lifecycle of the products, from manufacturing and transport to processing, disposal and recycling.
"More than half of all processes between companies and their commercial, ecological and economic environment are purchasing-related," says Sven T. Marlinghaus, partner at BrainNet. "Greater focus must therefore be placed on the environment when it comes to purchasing."
New Criteria in Purchasing Decisions
Purchasing decisions have typically been made based on such criteria as product, quality, coordination or risk costs. A purchase that complies with the principles of green procurement also takes greater account of the costs for environmental damage arising from production, delivery and processing.
So far only a few companies and official organizations in Germany are taking such "green" factors into consideration in their purchasing, according to the BrainNet study. "Fewer than 20 percent of all companies are actively tackling green procurement, and not even one in 10 companies is taking account of environmental costs as a critical factor when making decisions about its expenditure," notes Marlinghaus. "In the context of a globally oriented procurement organization in particular, this issue is an especially thorny one."
Given global climate change and the pollution of the environment, most companies are no longer asking whether they want to do something to protect the planet, but rather are considering what they can do.
Procurement policies could have a significant impact on a company's environmental "footprint," given that somewhere between 50 and 70 percent of a company's overall costs originate from purchasing.
However, "green purchasing" so far has had no standard definition. Generally speaking, it is understood to mean the purchase of products and services with minimal negative effects on the environment. This relates to the entire lifecycle of the products, from manufacturing and transport to processing, disposal and recycling.
"More than half of all processes between companies and their commercial, ecological and economic environment are purchasing-related," says Sven T. Marlinghaus, partner at BrainNet. "Greater focus must therefore be placed on the environment when it comes to purchasing."
New Criteria in Purchasing Decisions
Purchasing decisions have typically been made based on such criteria as product, quality, coordination or risk costs. A purchase that complies with the principles of green procurement also takes greater account of the costs for environmental damage arising from production, delivery and processing.
So far only a few companies and official organizations in Germany are taking such "green" factors into consideration in their purchasing, according to the BrainNet study. "Fewer than 20 percent of all companies are actively tackling green procurement, and not even one in 10 companies is taking account of environmental costs as a critical factor when making decisions about its expenditure," notes Marlinghaus. "In the context of a globally oriented procurement organization in particular, this issue is an especially thorny one."
RSS Feeds
