Opportunities presented by a sustainable procurement policy
Cost
Green goods and services are often assumed to automatically cost more than less sustainable products. This perception comes from considering only the upfront purchase price of a product and not the costs associated with the running, maintenance, replacement and eventual disposal of products. However, incorporating sustainability principles into procurement decisions makes sound economic sense and is not just a 'feel-good' factor. Sustainable products represent value for money in real dollar terms when life cycle costs are considered, such as:
- using less energy and water (running costs)
- generating less waste during operation (disposal cost)
- being longer lasting and requiring less maintenance delays the purchase of expensive new equipment (maintenance and replacement costs)
- capacity to upgrade, reuse, resell or recycle at end-of-life (replacement and disposal costs)
- being safer to use, e.g. less toxic chemicals (OHS costs and productivity)
Recognised best practice
Organisations are increasingly measured against factors that go beyond simple service delivery and the bottom line. Reputation and 'brand' is an increasingly valuable asset to government and industry.
A commitment to environmental management and sustainability is now regarded as an integral part of best practice procurement processes by both government and industry. Environmental aspects are an important part of real value-for-money purchasing decision-making.
Within the NSW Government, the
Government Procurement Framework supports the principles of value-for-money purchasing and best practice procurement processes. Areas where agencies can demonstrate commitment to best-practice procurement and continuous improvement include environmental management. Environmental performance of suppliers can now be considered as a factor in tender evaluation. For more information on the NSW Government Procurement Policy see the
Office of Financial Management's website.
Risk management
Sustainable procurement is now an important tool to reduce financial, environmental and reputational risks for organisations. Risk can be reduced by:
- using or investing in lower impact 'clean' technologies such as new plant and equipment, infrastructure or raw materials, which reduces the risk of prosecution by environmental regulators.
- sourcing products from reputable suppliers that can demonstrate that they aren't damaging the environment (e.g. they aren't bad polluters) or exploiting workers.
- ensuring purchasing policies benefit the broader community and do not impact on local economies (e.g. undercutting a locally made product).
- using safer and less toxic products and materials which minimise safety hazards to employees, customers and the environment.
Page last updated: 27 February 2011
