Environmental Purchasing in the Food Industry

Objectives
In general, Environmental Purchasing refers to the process of buying products and services with reduced adverse effects on human health and the environment. The basic aim of Environmental Purchasing is to support an organisation's environmental strategies and systems by reducing the environmental impacts and risks associated with the products manufactured and materials used within a company's processes and day-to-day operations.

To achieve this objective a number of environmental factors need to be integrated with a company's decision-making processes which typically involve four areas:

- General Business and Sustainability: covering the areas of company philosophy, policy and objectives.
- Legal & Compliance: ensuring the company is aware and compliant with all national and relevant international environmental regulatory issues and trends
- Management: covering programs and implementation for waste minimisation, education and training, purchasing and environmental systems
- Products: considering the sustainable use of resources for individual products and services

Benefits
The adoption of the AMC Guidelines will lead to these major categories of improvements:
i. Standardisation and increased documentation of environmental considerations, which are then more widely available internally, and to buyers.
ii. Increased awareness and adoption of environmental practices both within the purchasing department and other related business units, as well as, externally along the supply chain. The latter is particularly important in cascading the benefits of this process to the SME's.
iii. Establishing the basic framework for continuous improvements and the strengthening of alliances and partnerships within the supply chain.
iv. Increased competitiveness

Specifically, benefits to participating companies include:
- Improved compliance with customer and supply chain requirements
- Assistance in meeting external obligations eg local and interstate EPA requirements, Greenhouse Gas Emissions, National Packaging Covenant and other International trends - Rio Declaration, Kyoto
- Support for internal Cleaner Production objectives and processes
- Direct improvements to bottom line - reduced costs associated with wasteful practices including material and energy resources, disposal costs, transportation costs and costs in managing health hazards
- Increased employee safety and health
- Reductions in harmful residues and environmental risks
- Good corporate citizenship - distinguishing a company and its products from competitors by demonstrating to the community and customers the company's commitment to protecting the environment.

The Purchasing Guidelines for the Environment
Examination of the few, currently available, green procurement guides around the globe revealed that they were predominantly provided as checklists or questionnaires. The intention of the Purchasing Guidelines for the Environment was to go beyond this basic level and form the basis for joint improvement initiatives between purchasing and suppliers.

In discussions with suppliers some key benefits identified were that the guidelines provided a focal point for the information to be communicated, not just externally but also internally within organisations. In many cases other departments such as sales, were unaware of all the related environmental initiatives and developments within their own organisation.

The EPFI project aims to further develop the guidelines to expand the scope to cover all aspects of Cleaner Production and to spread this initiative to a wider audience through professional associations so that it becomes a recognised standard within the Food Industry.

Improving Purchasing Policies
Another implementation objective of EPFI project will be to help companies in the development of suitable purchasing policies. An organisation's purchasing policy, with regard to the environment, should aim to increase environmental awareness with existing and potential suppliers. It should encourage them to develop environmental policies and programs that reduce the environmental impact of their products and services and integrate the ideas and systems of resource and energy conservation and minimisation of residues into their business practices.

An outcome of developing and using the guidelines within a company will be to encourage both the company and its suppliers to be proactive through a range of approaches which may include:
- Developing agreements with key suppliers to encourage higher environmental standards without cost penalties
- Integration of environmental purchasing procedures into existing processes to avoid additional workloads and ensure long term survival
- Integration of environmental criteria into the supplier selection processes

New Purchasing Procedures
Implementation of the EPFI project will also help in the development of improved procedures. Manufacturers will be better equipped to:
i. Check the alignment of environmental purchasing with company objectives (environmental policy, purchasing policy, etc) and establish a baseline
ii. Decide on priorities for action, based on environmental issues and risks
iii. Decide on the type and quantity of supplier information required
iv. Consider the modes of data collection available
v. Improve communication with suppliers
vi. Collect information and evaluate for the development of performance criteria and/or improvement plans
vii. Monitor, review and feedback
viii. Help evaluation and ranking into differing risk categories in order for priority actions to be identified.

Further information on EPFI may be obtained through the Advanced Manufacturing Centre:
Sally Jackson
Food Industry Project Coordinator
Advanced Manufacturing Centre
Phone 02 9209 4209
Fax 02 9209 4470