Green Purchasing & Sustainable Supply Chains

1. 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

2. Seminar Agenda • Introduction – My Background • Overview of the City of Austin • Overview of Sustainability in Austin • Best Value Contracts • Why Green? Problems and Solutions • Benefits of Responsible Purchasing • Eco-Labels, Calculators & Life-Cycle Analysis • Questions?

3. Aiden Cohen: My Background • Sustainability Senior BuyerCity of Austin • Real Estate DevelopmentSouthern California • Supply Chain and Lean ExpertAerospace Industry

4. City of Austin: Operational Overview • City of 920,000 Residents; Greater Austin 1.4M 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: • www.ci.austin.tx.us/purchase/

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

6. Definition of Green Purchasing Green purchasing includes the acquisition of products or services that have environmentally preferable characteristics such as… • Recycled Content or Easily Recyclable • Bio-based or Bio-Degradable • Energy and Water Efficient Products • Use Alternative Fuels or Renewable Energy • Eliminate Hazardous or Toxic Chemicals • Locally Produced

7. What are We Really Talking About? Green Goods and Services Must: • Greatly Reduce or Eliminate Negative Ecological Impacts 2) Must be Commercially Available 3) Provide Superior Performance at Lower Costs According to Lifecycle Analysis • Improve the Productive and Responsible Use of Financial and Natural Resources

8. Tenants of Best Value Contracts Total Cost of Ownership Environmental & Social Responsibility Effectiveness, Delivery, Availability Considering More than the Initial Purchase Price

9. City of Austin’s Sustainability Programs • Austin’s Green Purchasing Program Supports: • Water and Energy Conservation Initiatives • Purchase of Environmentally Preferable Products • Waste Stream Management – Reduced Solid Waste • Attracting ‘Green Entrepreneurs’ and Small Business Development • Cost Savings, Innovation, and Process Efficiencies Recognized as the: The Most Livable City in the Nation and The Best Managed City in the Country

10. 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

11. 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

12. 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)

13. 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...

14. 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

15. 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

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

17. 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. 25M Gallons of Paint Sent to Landfills, Less than1/2 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

18. 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 over 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

19. 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

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

21. Small Business Opportunities • Develop New ‘Green’ Businesses for Competitive Edge or Niche • Participate in City Educational Opportunities (i.e. Green Gardening, Small Business Development Program, SMBR, Trade Groups, etc.) • Compete with Larger, More Established Firms • Reduce Costs through Conservation Best Practices • Offer Innovative Green Products or Services • Link to City’s Sustainability Initiatives • 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…

22. 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

23. Build a Responsible Purchasing Program Bottled Water Example

24. 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.

25. Green? Absolutely. Here’s what’s driving it: Green Purchasing Acts as a Catalyst to Save Money and Implement Best Practices Energy Efficiency & GHG Mitigation Policies Responsible Purchasing Policies at All Levels of Government Social Responsibility Initiatives How do we Measure the Benefits?

26. Green Can Save GreenKing County, WA • In 2008, King County, WAspent $54M on qualified green goods: • Office Products = $7.5M • Operations & Maintenance = $650,000 • Vehicles = $46M • 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

27. 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

28. 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, EcoLogo

29. 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

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

31. CFL & LED Lighting • Washington D.C. saved $1.5M Over 5 Years • First Christian Church used CFLs and T-8 lamps, LED Exit signs, and timers – Saving $6,000 Annually • Typical CFL Saves $30 per Year • CFL Last 5X to 20X Longer • Look for Rebates • Require Energy Star for Appliances

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

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

34. 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

35. Remanufactured Toner: Washington D.C.

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

37. Climate Initiatives & Purchasing: Energy Efficiency

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

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

40. 3 Responsible Purchasing Principles: RECOGNIZE GREENWASH: Rely on life-cycle assessments or third-party standards, not on unverified supplier claims STANDARDIZE PURCHASES: Use spending power to reduce costs, make environmentally preferable products cost-competitive CALCULATORS: Evaluate total costs, wastes eliminated, and other benefits

41. 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. • 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/

42. The Shades of Green Claims

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

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

45. 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

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

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

48. 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

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

50. 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)