Professional Development Seminar AGENDA Introduction Mr Stephen Howson

Professional Development Seminar AGENDA Introduction Mr Stephen Howson Contract Services Presentation One – Policies Across Government Mr Greg Rowberry – Sustainability and Climate Change Division, Department of the Premier and Cabinet Mr Ian Harvey – Zero Waste SA Presentation Two – A Government Case Study Mr Andrew Richmond – Department for Families and Communities Presentation Three – Supplier’s Perspective Mr Roger Carthew – Eco. Integrity Panel Questions Networking and Light Refreshments

Sustainable Procurement – Government Policy Greg Rowberry Sustainability and Climate Change Division DPC

Objective of this session • Use examples to: – Explore the role of procurement in influencing business in responding to government objectives – Consider the implications of possible future trends for your agency

Our Ecological Footprint

The Role of Business in Society • “The fundamental purpose of business is to provide continually improving goods and services for increasing numbers of people at prices that they can afford. ” • WBCSD: A Manifesto for Tomorrow's Global Business • “Business Cannot Succeed in a Society that Fails”

The Role of Business in Society • Meet customers’ needs for goods and services. • Innovate to create products that are more efficient and that contribute to human progress. • Create value for shareholders • Create jobs, pay wages and benefits. • Fund public services and infrastructure. • Contribute to healthy economies – ‘The products are the purpose the profits are the prize. ’

Sustainable Consumption? • More isn’t always better

Sustainable Consumption? • Less isn’t always better

Global Consumption • If the world is represented by 100 people, how many of them: • live on less than $2 per day 50 85 30 20 suffer from malnutrition lack access to basic sanitation 30 have a car 10 40 have a mobile phone 41 People own 85% of the wealth 85 50 20 40

One World (today) • Globalization – World trade has risen over 500 fold in value in the past century • Business power – In Washington DC lobbyists outnumber legislators by 30 to 1 • Connectivity – CNN is now available to over 1 billion people in 212 countries • Integration of cultures? – 90% of internet traffic is in English

Two Worlds (today) • Inequality – The top 10 percent own 85% of global household wealth, the bottom 50% own 1% • Population growth – By 2050 there will be 3 billion more people on the planet, mainly born in developing countries • Poverty – Half the world’s population lives on less than $2 per day • Urbanization – By 2050 two thirds of the world’s people will live in cities

Three Worlds (today) • Scarcity of resources – By 2025 half the world will be living in waterstressed areas • Technology Development – Will it focus on creating desires or meeting needs? – Of the 1223 new drugs marketed between 1975 and 1996, only 13 were developed to treat tropical diseases

Three Worlds (today) Increasing Demand • If everyone in the world were to consume natural resources and generate carbon dioxide at the rate that people in industrialized economies do…

Constructing the scenarios • Trends / pre-determined - Globalization - Connectivity - Integration of cultures - Business power - Inequality - Poverty - Urbanization - Population growth - Scarcity of resources -Technological development Key drivers / uncertainties - Consumer behaviour - Business regulation - Market Instruments

Will consumers be driven by… • Concerns about the social and environmental effects of their choices?

Will consumers be driven by… • Materialistic desires?

The Business of Sustainable Consumption National & Regional Protectionism REGULATION CONSUMER VALUES Materialism Environmental, social & economic impact of products and services International Regulation & Cooperation

Four Scenarios Snapshots National & Regional Protectionism REGULATION CONSUMER VALUES Materialism Environmental, social & economic impact of products and services International Regulation & Cooperation

Bubble • WTO and UN failure • Intensified climate change • Government and consumers focus on own protection, turn away from global solutions • Business focus on meeting demands of middle-class consumers

Bubble life • Growing gap between rich and poor… between those who can insulate themselves from climate chaos and those who can’t Asian Economic Area formed WTO fractures UN beset by scandal and disbanded 2050 2000 Shanghai devastated by flood Bangladesh declares state of climate emergency China splits into 8 states

Telescope • International regulation secures business transparency. • Investors base their decisions on long-term value creation. • Consumers demand that businesses be more accountable and provide information on social and environmental impacts.

Telescope life • Economic growth aligned to global priorities for social and environmental well being. • But those whose concerns do not fit this framework are marginalized. SRI overtake non-SRI funds by value in US 2030 Global Agreement on economic cooperation and transparency 2050 2000 Peace in the middle east: Istanbul peace accord signed, Israel's wall comes down GDP replaces by gross national welfare as international headline indicator

Overview Consumer expectations of business Middle class minority Providing comfort and security Expanding Opportunity Bubble A new generation of conscientious consumers Moon Loop New mass consumers in developing countries Telescope Doing no harm Innovation to solve global problems Future generations Which consumers are driving business strategy?

What does all this have to do with me? • How can procurement policy influence business decisions to get the outcomes that we/government want?

Green Office Procurement Ø 2005 HR Sustainable Cities Inquiry Ø Report on Green Office Procurement Ø 71 Australian Government agencies Ø 95% of AG contracts (including Defence)

Findings “Performance…. in meeting the government’s expectations on office building energy efficiencies are commendable, but performance in motor vehicle emissions, reducing recycling, office wastes and conserving water has been pretty variable and, in most cases, pretty poor”

Australian Government Commitment To lead by: Ø Buying goods and services that seek to minimise possible environmental impact Ø Working with industry to encourage continuous reduction in …. environmental impact of goods/services ØAssessing the environmental impact of goods and services against informed and internationally recognised standards

16 Recommendations 1. Internal policies 2. Whole of lifecycle 3. EMS 4. Targets 5. Benchmarking and group purchasing 6. E-waste & energy star ratings 7. Fleet energy performance 8. Greenhouse gas emissions

16 Recommendations (cont. ) 9. Water conservation 10. WLA for buildings & offices 11. Waste reduction – actions + contracts 12. Energy reporting 13. Energy management 14. Energy ratings for tenancies 15. Join Greenhouse Challenge+ Program 16. Best practice guidance

Procurement & Waste: The Life Cycle of Materials Zero Waste SA

State Government Waste Targets South Australia’s Strategic Plan: reduce waste to landfill By 25% by 2014 South Australia’s Waste Strategy: 30% increase in recovery of commercial & industrial materials by 2010 South Australia Strategic Plan Objective 3: Attaining Sustainability – Targets www. saplan. org. au/plan_targets_obj 3. php South Australia’s Waste Strategy www. zerowaste. sa. gov. au/waste_strategy. php

What is Zero Waste? Waste Management Hierarchy Image area Most Preferable REDUCE: producing/purchasing less materials which will become waste Avoid Reduce Reuse Recycle Recover Treatment Disposal Least Preferable AVOID: not producing/purchasing materials which will become waste REUSE: using materials more than once before recycling or disposing of them RECYCLE: remanufacturing used materials into new products/resources RECOVER: capturing otherwise wasted resources (eg. recovering & using heat from electricity generation processes TREATMENT: treat materials to minimise harmful effects on land, water or air DISPOSAL: release materials/pollutants to land, water or air

Less Stuff = Less Energy (C 02) AVOID USE LESS DISPOSE USE LESS USELESS Waste = Materials + Energy (C 02)

The story of a can!

The secret life of products

Climate Change & waste § Evidence is now irrefutable § Witnessing daily events of increased intensity and magnitude § Australia is not immune § Waste reduction and recycling have an exceptionally important role to play!

Procurement & Waste • procurement is first point of ‘materials metabolism’ - what goes in, must come out • fate of material at the end of its life cycle is determined at the beginning of its life – the design stage • procurement specifications can send market signals to encourage processes and designs that are efficient, enables disassembly and reuse/recycling, and which eliminates or reduces use of hazardous substances

Case Study: Procurement & E-Waste (electrical and electronic waste) high on list of priority waste streams in every OECD jurisdiction, including South Australia, due to: • volume of material generated • toxicity of many of the components including lead, mercury and cadmium

Case Study: Procurement & E-Waste Volume of Material Generated In 2007, it is estimated that: 2. 2 million new PCs will be sold in Australia 1. 6 million computers will be sent to landfill 1. 8 million computers will be stored. . . in addition to the 5. 3 million computers already in storage Environment Australia – Computer Waste Model www. environment. gov. au/settlements/publications/waste/electricals/comp uter-report/pubs/appendixb. pdf

Toxicity of components • Lead – CRT screen (1. 8 – 3. 6 kgs); solder • Barium – CRT screen • Hexavalent Chromium • Beryllium • Mercury E-Waste is HAZARDOUS waste • Cadmium • Brominated fire retardants

E-Waste: Toxic Trash Exporting Harm Guiyu, China, December 2001 – Basel Action Network www. ban. org

E-Waste: Toxic Trash Exporting Harm Guiyu, China, December 2001 – Basel Action Network www. ban. org

Procurement is also about resources & ghg • Manufacturing one average computer uses: – 240 kg of fossil fuels, – 22 kg of chemicals; – 1, 500 kg of water – a total of 1. 8 tonnes of materials. • Environmental impacts increasing: – materials and energy intense production process – greater adoption of PCs worldwide – rapid rate at which they are discarded for newer machines. • Leading to: growing amounts of e-waste and increasingly serious contributions to resource depletion, environmental pollution and climate change.

Waste, Procurement & Greenhouse: Shifting Perception …seeing waste as materials… …seeing materials as ‘energy carriers’ Image from: www. worth 1000. com

Procurement is power! • procurement also relevant to purchasing waste/recycling services • need to develop specifications for managing of end-of-life material • consolidated approach by State government to determine preferred service provider(s).

Where to from here? • This is worth doing, there are clear benefits, it can be done, it is not difficult, it will not cost more in the medium term and will show real dividends in the long term. • Those in charge of our big public sector organisations must see their spending power as a tool to deliver a more sustainable future and to be prepared to use it, only then can government truly claim that is achieving real value for the public purse. • UK Sustainable Procurement Task Force

Beyond Recycling AVOID Recycling is only the halfway point of the journey towards being a zero waste society… Recycling? We Are Here! DISPOSE

Zero Waste is Global

Australian Green Procurement www. greenprocurement. org. au Designed for procurement officers and professionals involved in green procurement

Good Environmental Choice Australia http: //www. aela. org. au/ Ø Certified Products Register Ø Green Procurement Database Ø Standards Register Ø The Eco Label

The State of Green Procurement in Australia (2004) Ø Market mechanisms Ø Local, State, C’wth Government analysis Ø International arrangements Ø Business, NGO and Industry actions Ø Trends, conclusions & recommendations

South Australia Ø State Procurement Board Policy Ø Environmental Impact Policy Ø EI policy yet to extend to services Ø GOGO: Objective 6 Ø Energy Efficiency Action Plan Ø Initiatives

SGP Conclusion - Shift From: “. . to reduce the impact on the environment of our operations” To: “. . creating a balance between the consumption of resources of our organisation and the ability of the regenerative capacity of the environment to sustain this consumption”

SGP Recommendations Ø The Manufacturer - measure and report (ISO 14020) Ø The Transaction - articulate expectations Ø The Consumer - track material flows - corporate change & build capacity Ø The End of Life System - market mechanisms - manufacture -> RFT->end of life

Toyota

Statefleet – Mixed Messages?

Greenhouse Projections

G 8 Climate Change Roundtable

Thank you www. greenprocurement@aela. org. au