Cape Town based Green Economy leader, Dr Jaisheila Rajput, whose client base is spread across Africa, Asia and Europe, talks about the importance of unlocking green business value, with long term benefits.
Is green procurement the post-COVID-19 gamechanger we’ve all been waiting for? Here’s why it should be an essential part of your procurement strategy. COVID-19 brought us many things, including a retrospective view of how we consume our available resources. Consequently, consumers have become a lot savvier and demand more of their brands.
Here’s why it matters
Awareness and acceptance of alternative, greener products and technologies for minimising environmental impact are critical for broader uptake. It is key to effectively understand what’s out there and determine what will work for your specific context. We have an opportunity to promote a preference for alternative, and preferably green, low-carbon materials and processes that nurture a healthy, living environment and a sustainable future, while alleviating economic burden through cost savings. However, there is also something much simpler on offer – resilience. Many supply chains have been impacted heavily as a result of lockdown restrictions from COVID-19. This means we need to be a lot smarter in our procurement practices and resource consumption. Green procurement solutions offer resilience that aside from environmental and social benefits, if played correctly, can create economic value.
Simultaneously, we are in an era where ESG (Environmental, Social and Governance) frameworks have become of key investor focus. In South Africa, the JSE has launched sustainability and climate change disclosure guidance for listed companies. India has introduced new ESG reporting requirements for the top 1,000 listed companies in the country by market capitalisation. Procurement can play a valuable and vital role by governing inputs while taking environmental and social considerations into account.
What’s in it for you
A green procurement policy can help mitigate rising material costs by establishing a robust secondary resource economy for recycled and reused materials, creating alternative opportunities for waste, while reducing environmental strain on our landfills. This requires the establishment of a secondary resource economy and marketplace.
4 Steps to greener procurement:
- Research. Do your homework on what’s available. Use an expert to help navigate the space. There are several innovative materials and technologies available. The right expert partner will not only help find solutions but help guide optimal selection.
- Data use and marketplace development. A key aspect of sustainable materials is the inclusion of recycled content. An effective marketplace needs both volume and quality-related data. Development of second-hand material specifications should support this, including access, quality and location of materials. The same goes for technology selection. Data is critical for the desired impact – measure what matters.
- Reused and recycled materials need to be included in material specifications. It is best at the product design stage, but a simple swap-out is possible for non-critical elements or if similar material properties are exhibited.
- Policy. Often the lack of a good policy or strategic framework can be a stumbling block. The strategic framework acts as a guiding instrument, indicating not only direction but concrete implementation plans.
Putting it into action
Go back to first business principles. Opportunity costs or shadow prices for inputs and outputs should be evaluated and a cost-benefit analysis carried out. When selling the concept internally, ensure you identify all direct and indirect benefits arising – this includes economic, environmental and social.
Engaging with secondary resources has positive spin-offs as it ensures that the environment is protected whilst it contributes to industrial development and the creation of employment opportunities, especially for low skilled sections of the population. The drivers of this approach include increasing raw materials prices, scarcity of land for new landfill sites, illegal dumping sites, unemployment, and to a large extent, the growing interest in investing in a low carbon economy.
Taking a greener approach means evaluating the win-win. There are layered benefits to going down this road. Establishing a green procurement policy does not have to be complicated but it does need a structured, systemic approach to maximise benefits and unlock intrinsic value.
By Dr Jaisheila Rajput, Founder and CEO Tomorrow Matters Now (TOMA-Now)