Implementation of a Responsible Purchasing Policy
|In domains||Banking and Finance, Renewable Sourcing|
The responsible purchasing policy (la politique d’achat responsable, or PAR) of Fondaction was adopted in February of 2008. This policy aligns with the sustainable development framework advocated and practiced by Fondaction, which aims at promoting producers of goods and services who respect their workers, communities, and the environment. The policy sets parameters to guide procurement officers in informed decision-making.
Out of concern for the impact of its practices when purchasing goods and services, Fondaction vows to:
- Act as a responsible consumer, taking into account the effect of its economic influence;
- Gradually adopt the 3R philosophy - reduce, reuse, recycle – in its purchasing processes;
- Maintain the highest standards of quality for goods and services.
Implementation of PAR is the direct responsibility of the director of administration. In this role, s/he annually monitors the operations committee and company meetings (meetings between management and Fondaction employees).
Criteria to be considered in the goods and services purchasing process are grouped under three general categories, namely social, environmental, and economic:
- Social category: aimed at promoting local suppliers; unionized firms or firms with participatory management practices; and social enterprise firms or those that respect International Labour Organization conventions;
- Environmental category: aimed at promoting suppliers with environmental policies or practices; who offer eco-friendly goods or services, or goods produced under the principles of 3R;
- Economic category: a responsible purchasing policy must ensure implementation of good procurement management; economic analysis must be carried out from a global perspective and not just with an eye to the bottom line.
Mise en place
The implementation of Fondaction’s PAR: a gradual process.
Before the creation of PAR, Fondaction had already established certain rules of conduct for purchasing, for example in their choice of products or unionized manufacturing services, such as paper or hotel conference spaces. This policy therefore primarily serves to formalize these practices and to gradually expand them to all purchases, in a way that is universally understood.
To support this approach, we conducted an analysis of all goods and services purchases by Fondaction in 2007. The results of this analysis were very illuminating. In fact, this is an essential preliminary step to conduct before all else. We began with a network of a bit more than 300 suppliers of goods and services.
We identified three main groups of suppliers:
- The first group included accounts of more than $100,000, and represented 17 suppliers (6% of the suppliers) and close to 80% of the sales;
- The second group included purchases between $10,000 and $100,000, and represented 50 suppliers (16% of the suppliers) accounting for a bit more than 15% of the sales;
- The third group included sales less than $10,000, carried out with 235 suppliers (almost 78% of the suppliers) but only representing 5% of the sales.
Based on these findings, and the general framework of economic, social, and environmental principles guiding Fondaction’s actions, the responsible purchasing policy includes the objective of ensuring that the majority of purchases will reflect these principles by 2010, when Fondaction will publish it’s 3rd sustainability report. To get there, it was necessary to set short and long-term targets.
In the short term, it seemed clear that we should begin with the group of 17 principal suppliers that represent 80% of our purchases. The first step in data collection was initiated. We found that of these 17 suppliers, only 3 supply goods. The others primarily supply financial services. Another finding is that the majority of these 17 suppliers already meet several criteria of Fondaction’s PAR. They are for the most part social enterprises (of which several are economic development organizations created through an initiative of CSN) with recognized social and environmental practices. It was a good starting point.
In the medium term, we plan on improving documentation of our work, and creating awareness of our expectations amongst our suppliers. To achieve this, we plan to develop a long-term partnership with Neuvaction, a consulting service created by Fondaction.
From a practical standpoint, depending on the category and the importance of the goods or services purchased, certain criteria are prioritized in the implementation of PAR. The team requesting the purchase should play a principal role in indicating criteria to be followed by the suppliers. For important purchases, the purchasing manager should inform the suppliers of Fondaction’s PAR criteria, and seek specifications on the products from this perspective. While searching for products that meet PAR’s criteria, the purchasing manager can draw on various existing labels, certifications, and directories.
For example, during the first stage of policy implementation, the director identified the first group of products (goods or services) used by Fondaction that have environmental certifications:
- 100% post-consumer recycled paper or FSC, manufactured or distributed by unionized firms;
- Coffee and sugar certified fair-trade by Transfair;
- Electronics or electric appliances certified by ENERGY STAR, or with equivalent certifications, upon renewal;
- Hotels certified by Réservert and unionized by CSN;
- Social enterprise catering services (particularly work integration social enterprises)
Finally, in the spirit of participative management that characterizes Fondaction’s union-management relations, company management proposed to the union’s environmental and sustainable development committee to ensure implementation of environmental policy (which includes PAR, the waste management program, and sustainable transportation policy). This bold implementation should enable the development of a dynamic innovator in the years to come.
Despite the fact that Fondaction’s PAR is fairly new, its results are encouraging. It should be noted that it was major purchases (paper, electronic products), centralized in the administrative department, that were most quickly able to comply with the new policy. For example, all the paper that we use today is 100% post-consumer certified. This is done at the same price as before, since we reduce cost by buying a larger quantity that we share with other business tenants of Carrefour solidarity financial enterprise. However, it proved challenging to find 100% post-consumer certified paper at a low price. We had to conduct a long search and seek numerous bids to reach our goal. Still, it is in this way that we can achieve the effective implementation of PAR, resulting in better purchasing practices.
The challenge ahead is to change the way we conduct many smaller purchases within each department. To this end, training is now offered to employees responsible for purchasing. In addition, a PAR directory will be available on Fondaction’s intranet site, where employees will find tools to facilitate their work.
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