Circularity in Procurement – Tips and Resources from the SPP Ambassadors meeting
July 7th, 2021
On July 7th Sustainable Procurement Pledge Ambassadors gathered from all over the world to tackle the subject of circularity in procurement. We heard from an expert panel on how thinking circular can help drive sustainability. Then Ambassadors got a chance to connect in break out rooms to share insights and ideas on circularity in procurement. Interested in knowing what tips and tricks SPP Ambassadors keen to share? The thoughts and questions shared by Ambassadors can be found below.
Our next Ambassadors meeting is September 15th. We will be covering how to fund sustainable procurement. Register using the zoom invite shared on our LinkedIn. See you there!
What insights did SPP Ambassadors discuss in the breakout rooms when discussing how circular thinking can help procurement?
On procurement being uniquely positioned to impact circular practices:
- Procurement has an opportunity to connect both ends of the supply chain. E.g. An investigation of the end of life recycling for Hotel bedsheets lead to changing the input materials from something that couldn’t be recycled to something that was only cotton and could be recycled more easily.
- There is no one size fits all answer to becoming more circular, you need to look at each product/service you are buying and unpick it with technical users to understand how to procure them more sustainably with circular principles in mind,
- Procurement can build value by supporting circular innovation, within their own organization and through supplier relationships.
On getting started:
- When beginning to think circular, start with your own business. Understand what you produce at each step of the chain. E.g. What materials do you use that may have alternatives? What efficiencies can you gain by altering flows of materials? Etc. Then understand how your suppliers can contribute to circular efforts.
- Do not forget to consider the leaks from the circular process once you’ve begun making changes.
- Set benchmarks and follow up consistently to ensure that you understand how changes to your processes have impacted your business.
- Circular thinking should be built in at the product design stage to make circular procurement a reality. Aligned objective and effective governance is key across the production process
- The first steps are very achievable like shifting away from single use products. These concepts can be applied to procurement.
- Investigate Extended Producer Responsibility (responsibility on the manufacturer to design products that last).
- Environmental Product Declarations (EPD) can give you a baseline to work with for current products.
- Aim to influence the design and rethinking of the production cycle.
- Circularity does not just have to involve the end product, it’s also all the materials and waste products used during production.
On working with other supply chain actors:
- Partner with and promote sustainably innovations from suppliers. Incentives are key! What do your suppliers get from making these improvements? What’s the long-term view?
- In certain geographies like West Africa and Indonesia this is a long way away as there is not much circular thinking
- Aim to use data to stay attuned to what’s real e.g. labelling can be misleading, greenwashing is rampant.
- What new opportunities does circularity create e.g. new businesses and / or new sectors that manage return of products, remake, reuse etc.
- For existing suppliers, don’t be afraid to ask them if they are already taking actions to reduce waste that you may not know about.
- For new suppliers, consider starting discussions around sustainability prior to contracting to understand each supplier’s maturity in regards to sustainable practices.
On waste and recycling:
- One company’s waste is another company’s raw material, if there are networks like Uber or AirBnb this could enable Circular Procurement. Cyrkl is an example of this – https://www.cyrkl.com/en/.
- Waste is no longer considered waste. E.g. Food Waste can be turned into bioplastics using bacteria. This is used back in the production process.
- Kindmates we managed to reduce 95% of product spoilage in transit and reported 27% cash savings by switching from Cardboard+Shipping supplies (ice packs, fillers, etc) to Liviri Ultra-insulated Shipping Boxes – Check liviri.com and ask for Mike Berg
- How do we broker the role and access to materials between organizations to identify value from waste to value?
- Can recycled material create a more valuable (lower cost better materials) marketplace than virgin materials so the economics lend themselves to enabling better business outcomes?
- Key topics – recycling and re use. business drivers. Performance of materials today, Consumer demand & key supplier requests. Challenges of the circular economy – cost (production, Capex and supply chain changes) – regions ability to recycle (Europe having legislation that encourages and US looking to catch up). Other challenges include historical views on recycling causing confusion for consumers and what is the correct way forward for products and what are the trade offs.
- Are there enough facilities/suppliers to source recycled materials? In all industries? How do we increase recycling capabilities to match uptake? Link to Schwarz buying Suez in 4 European countries, and a few disposals – is this securing future flows of recycled materials? https://www.reuters.com/article/us-suez-m-a-schwarz-eu-idUSKBN2C12ES https://cen.acs.org/environment/recycling/Eastman-build-250-million-plastics/99/web/2021/02
On examples and success stories:
- Global Standards/Guidelines would be useful. Examples such paper as FSC/PEFC. More understanding of Circular Economy with Electronics, especially with components with short life cycles. We need to ‘step back’ and look at ways we can design products which deliver optimal sustainability and enable Circular Economy. Sellers should be made to be responsible for ‘recyclability’ of their products. Examples given were Ikea, who have created an infrastructure to return packaging products from their goods. Philips was another example of an organisation which provides a similar facility. Also ‘Incentivisation’ (financial) may well be needed to influence everyone in the economy to ensure recyclability
- Are there good examples where industry has united to drive a material change
- Examples – events industry – stop supplying cheap items to more reusable and recyclable components
- What is the role for regulators to review waste streams, drive encouragement, enforce consequences etc for driving the desired behaviour?
- Our fruitful conversation can be summarized in the following clusters across industries (we had representatives from different industries, for example construction, energy, manufacturing, electronics):
- Enabling circular reuse of packaging (e.g. replacing materials to recyclable substitutes, pallets)?
- Circular economy key drivers. Outlining the key parameters for the company where we can/should reach circularity firstly before asking the question HOW.
- Building upstream-downstream collaboration to extend value chain circularity with suppliers as well as customers (e.g. incentives, CRM, SRM). What are the core suggestions of how to enable this type of collaboration?
- Top-bottom implementation? How to deliver the message to the management and answer their question “What is there for me”?
- Another model clause for use in the Real Estate Sector: https://chancerylaneproject.org/model-clauses/sustainable-and-circular-economy-principles-in-leasing-arrangements-for-repair-and-alterations/
Where should you look for more information about Circular thinking? Our ambassadors have many recommendations.
- Start with spp.earth! We have multiple blog posts on the topic, as well as a page on free online courses to get you started! https://spp.earth/challenges/free-online-courses-about-circular-economy-circular-procurement/
- Microsoft will be issuing some new GHG resources for our suppliers which will be public on microsoft.com in the next in late July, early August.
- EdX.org has many starter courses for anyone looking to broaden their understanding of the circular economy. https://www.edx.org/learn/circular-economy.
- USAID has a Joint Initiative on Sustainable Packaging for Humanitarian Logistics – looks at how we can do good by not leaving behind a mess.
- Another resource recommended was h ttps://www.enelx.com/n-a/en/circular-economy/report-companies
- Few case studies in different sectors such as plastics, IT, construction, etc https://circularprocurement.ca/
- Circular Economy Procurement Framework – https://emf.gitbook.io/circular-procurement/-MB3yM1RMC1i8iNc-VYj/
- Here is a free model clause for circular economy requirements around product design and manufacture: https://chancerylaneproject.org/model-clauses/circular-economy-product-design-obligation/
What do SPP Ambassadors want to know more about? If you have any thoughts on these areas feel free to jump in the discussion on spp.earth (https://spp.earth/discussion-forum/) or in the Sustainable Procurement Pledge LinkedIn group!
- How can we drive circularity in Indirect procurement?
- Where does circular economy procurement rank in the organisation’s sustainability agenda?
- Can I use TCO as a tool to open dialogue with suppliers?
- Differentiation between circular and sustainability and the need for better understanding of the differences!
- How is local circularity reconciled with global?
- What’s the relationship between government, corporation and consumers when it comes to education, awareness and ultimately action?
- I’d love to hear about examples of circularity – what companies are doing to recycle / reuse their materials? In our group there was an overarching topic on circularity of packaging materials and I struggle to come up with ideas on circularity without any known benchmark.
- I’d like to know how much of the circular economy is based upon biomimicry; how much can we reuse in innovate, not-yet-discovered options!
- I would be interested to know how many of your sustainability or circular economy procurement choices take place prior to choosing a supplier and how many of them translate into contractual requirements in supply contracts?
- What are the best practices from various industries in terms of implementation of circular economy (e.g. Eco-design, recycling of by-products, e-waste)?
- Someone mentioned CapEx sourcing, and that you don’t always need to buy a brand new equipment. How does this play out in food/pharma companies where the quality requirements make it such that you basically need the highest grade, brand new equipment every time.