World's biggest consumers can green the environment

Posted: 22 July 2003

Spending billions of dollars annually on goods and services-often more than the gross domestic product (GDP) of entire countries-corporations, international organizations, universities, and other large institutions are key in fostering the shift towards an environmentally-sustainable world, reports a new study from the Worldwatch Institute.

Through their daily purchases, these mega-consumers hold considerable sway over the health and stability of many of the world's most fragile ecological systems, says Worldwatch Research Associate Lisa Mastny, author of Purchasing Power.

"While environmentalists have worked for decades to win the hearts and minds of individuals, some of the world's biggest consumers have remained out of the spotlight," says Mastny. "Yet their enormous and often environmentally devastating purchases of everything from gas-guzzling vehicle fleets to cancer-causing cleaning supplies can have far greater consequences for the future of our planet than the buying habits of most individual households."

In some industrial countries, government purchasing accounts for as much as 25 per cent of GDP. Government procurement in the European Union alone totaled more than US$1 trillion in 2001, or 14 per cent of GDP. In North America, it reached $2 trillion, or about 18 per cent of GDP. Universities, too, spend billions of dollars each year on everything from campus buildings to cafeteria food. In the United States, colleges bought some $25 billion in goods and services in 1999—equivalent to nearly 3 per cent of US GDP. And the United Nations spent nearly $14 billion on goods and services in 2000.

Because of the large-scale, systematic approach that most institutions take in their purchasing, a single decision made by one professional buyer or purchasing department can have a tremendous ripple effect, influencing the products used by hundreds or even thousands of individuals.

"By that same token," says Mastny, "just one environmentally-focused purchasing policy or guidance—if properly implemented and enforced—can bring widespread benefits to an institution. By investing in everything from energy-efficient lighting to organic food, growing numbers of businesses, government agencies, hospitals, and other organizations are not only creating safer and healthier workplaces, but are also saving money."

If enough demand for green products is generated, entire markets can shift. A few notable successes point to the tremendous power of green purchasing:

  • When the world's single largest computer buyer, the United States government, was directed by President Clinton in 1993 to buy only computer equipment that met energy-efficiency standards described under the government's Energy Star program, it set into motion a massive overhaul of the consumer market. Today, largely as a result of this increased demand, 95 per cent of all monitors, 80 per cent of computers, and 99 per cent of printers sold in North America meet Energy Star standards.

  • A high-profile campaign by the Rainforest Action Network, aimed at pressuring leading US home improvement retailer Home Depot to improve its wood buying practices, provided the impetus for the company's adoption of a green purchasing policy in 1999. Within a year of this shift, retailers accounting for well over one-fifth of the wood sold for the US home remodeling market announced that they too would phase out endangered wood products and favor wood coming from certified sustainably managed forests. Two of the nation's biggest homebuilders also pledged not to buy endangered wood.

  • Government purchasing is credited with spurring the rise of recycled paper to the level of standard office supply in many European countries. And analysts link a jump in the environmental performance of Japanese electronics to that country's preeminence in the green purchasing of computers and other high tech products.
But while green purchasing initiatives are blossoming in the world's wealthier nations, the question remains of how to jumpstart a similar movement in the developing world. Although overall resource use in these countries is still relatively low compared to industrial countries, rising consumer demand will make strengthening local markets for environmentally sound technologies—from renewable energy to non-chorine bleached recycled paper—increasingly important.

Mastny says that one way institutions can help spread green purchasing in developing countries is by using their own procurements to strengthen local green markets. By seeking to buy a greater portion of their goods and services from local green suppliers, leading international players like the United Nations, the World Bank, and multinational corporations can not only stimulate green markets, but also combat mounting criticism about the environmental impacts of their activities.

"Green purchasing will never be a magic solution to the world's rampant resource consumption, but it does offer tremendous opportunities for lessening the impacts," says Mastny. "And as more and more institutions realize the benefits of buying green—in terms of employee health, the environment, and their own bottom-lines—groups that disregard environmental factors risk being left behind."

Tips for greening purchasing contractsTo green contracts with suppliers, purchasers can ask that:

  • Products display one or more positive environmental attributes such as recycled content, energy or water efficiency, low toxicity, or biodegradability.

  • Products generate less waste by containing less packaging or by being more durable, reusable, or remanufactured. Santa Monica, California, asks its vendors to supply cleaning products in concentrated forms to save packaging.

  • Products meet certain environmental criteria during manufacturing or production, such as paper being processed chlorine free or being made of wood from a sustainably managed forest.

  • Suppliers reclaim or take back items such as batteries, electronics equipment, or carpeting at the end of the products' useful lives. Some US federal agencies now use "closed loop" contracts requiring contractors to pick up used oil products, tires, and toner cartridges for disposal.

  • Suppliers themselves have environmental credentials. Some government purchasers in Switzerland give preference to companies that have or are putting in place environmental management systems.

Source: Worldwatch Institute

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