Unit 4: Procurement and Management Support
In this section we will look at how to include green ICT requirements in procurement of products and services. Previously we looked at strategies for efficiently using ICT equipment to minimize energy and materials use. However, much of the environmental benefit in green ICT comes from selecting the right products and services. How do you ensure that your hardware, software, and services suppliers provide green products?
Wikipedia defines procurement as
the acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place and from the right source for the direct benefit or use of corporations, or individuals, generally via a contract.
Large organizations will typically have complex procurement policies with detailed processes. Economic analysis methods such as cost–benefit analysis, or cost–utility analysis, may be used for large-scale purchases, particularly by government organizations.
Green ICT considerations may be included in each stage of the calculations. Costs will be affected where, for example, higher efficiency power supplies are required. Consideration might be given to purchasing smaller quantities of equipment to be used more intensively. The equipment may need to be to a higher quantity to allow for more intensive use, as well as requirements for materials to meet recycling and hazardous materials standards. The source of the equipment may play a larger role, with the energy use in delivery being considered. As well as the direct benefit of the product to the organization, its effect on the environment and the community generally needs to be considered. Purchasing arrangements may go beyond conventional legal contracts and involve long-term partners, co-destiny suppliers that commit one organization to another.
ICT procurement is typically indirect procurement. That is, ICT procurement activities concern operating resources for the organization’s operations. This contrasts with direct procurement, where raw materials are used in making some other product.
Procurement may involve a tendering process, with potential suppliers submitting bids. Usually the potential supplier that submits the lowest bid which complies with the requirements is accepted. However, other criteria in addition to price may be used to assess tenders. Green ICT requirements may be included in the requirements and/or could be included in the criteria used for assessment.
- Information gathering: There may be a search conducted for potential suppliers and available products. A formal request for information (RFI) may be issued, describing what purchases are intended and asking for information from suppliers. This might be used to see what environmental standards suppliers are able to supply to.
- Supplier contact: A request for quotation (RFQ) or request for tender (RFT) / invitation to tender (ITT) may be advertised publicly or sent to a limited set of suppliers.
- Background review: The products or services offered are assessed against criteria set down in the RFT. This may require examination of claims of conformance to standards by the supplier or testing of samples of the equipment or service. In the case of green ICT this might require testing power consumption of equipment, or verifying claims of conformance with independent standards, or tests conducted with independent test labs.
- Negotiation: Negotiations are undertaken, usually with one selected supplier or a short list.
- Fulfillment: An order is made and payment made. For a large order the payments may be staggered.
- Consumption, maintenance, and disposal: The performance of the supplied product and after sales service is assessed. For ICT products there are usually maintenance contracts and the supply of maintenance, ensuring an ongoing relationship with the supplier. Green ICT considerations may include provision for return of the product to the supplier at the end of its useful life for disposal or refurbishment.
- Renewal: At the end of the supply contract, the supplier’s performance is evaluated. With ICT equipment, it is likely that further equipment will be ordered from the same supplier, if satisfactory.
Green Procurement Policy
Large organizations are likely to have a formal corporate sustainability or green procurement policy intended to apply to products and services, including ICT. The policy will include a general statement of aims, including a commitment to improve the environment, reduce the environment impacts and promote sustainable development. This is done by integration of environment performance in the procurement process.
As an example of green procurement, Tata Consultancy Services Limited provides this Environmental Policy and Green Procurement Policy on their website. See also the Australian Government Policy, Guides & Procurement page.
Such policies can have different levels of enforcement. For example, a policy may include a requirement for all departments and agencies to purchase office equipment that complies with the US Environment Protection Agency Energy Star standard, but there may be no requirement for reporting or audits to ensure compliance.
Do some research on requirement for agencies to set sustainability targets and report on meeting them for your home country or region: look for corporate sustainability or green procurement policies. What body sets the actual targets? How are these enforced through reporting requirements? How else are they enforced?
Share your findings in the General Discussion Forum. Be sure to list and cite sources using either APA or the IEEE style.
Australian Government ICT Sustainability Plan 2010–2015
In a very innovative piece of policy making, the Australian Government has developed a national ICT Sustainability plan. The ICT Sustainability Plan is based on extensive research and consultation with key stakeholders, including Australian Government agencies, international governments, the ICT industry, and other interested parties.
The plan was in response to the 2008 Review of the Australian Government’s use of information and communication technology (Gershon Review). This review recommended that the Australian Government align its ICT operations with the Government’s overall sustainability agenda, and improve its ability to understand its energy costs and the carbon footprint of its ICT estate. Consistent with this view, the Government decided that the ICT sustainability plan should
- identify which of the available environmental standards should be adopted as mandatory for relevant ICT acquisitions;
- identify the steps to develop a whole-of-government ICT energy consumption target and associated reporting arrangements;
- establish ICT energy intensity measures and/or targets; and
- take into account potential implications of the Carbon Pollution Reduction Scheme (CPRS) and other ICT sustainability initiatives.
The Government also decided that Australian Government agencies with an annual ICT budget over $20 million would develop an ICT energy management plan, and that agencies would undertake periodic independent ICT energy assessments of their data centres and server rooms.
In addition, the plan should consider the contribution that ICT can make more broadly to achieving more sustainable practices in the community.
The plan outlines strategies and actions that will assist Australian Government agencies to introduce low carbon emission initiatives to improve the sustainability of their ICT operations. This aligns with the Australian Government’s carbon emissions mitigation strategy (including the proposed CPRS) and its commitment to reduce greenhouse emissions by 60 percent of 2000 levels by 2050. The plan also serves to inform industry of the Government’s ICT sustainability agenda.
Environmental Standards in ICT Procurement
Australian Government agencies are required to adopt the following mandatory environmental standards in ICT procurement processes:
How many of the devices used by your organization are battery powered? Do you have a policy on using rechargeable versus non-rechargeable batteries? Is there a central repository for staff to deposit used batteries for proper recycling? Is this something individuals could initiate if no organizational policy is in place?
- compliance with ISO 14024 or ISO 14021 at the level of EPEAT Silver or equivalent as a minimum standard for relevant ICT equipment;
- compliance with the current Energy Star version for relevant ICT equipment;
- product take-back and appropriate resource recovery, reuse, or recycling for 1) mobile devices, such as mobile phones, PDAs, and Blackberry devices; 2) toner cartridges; and 3) ICT equipment covered by the National Television and Computer Recycling Scheme under the National Waste Policy;
- general use office copy paper to have a minimum post-consumer recycled content of 50 per cent by July 2011, with progression to 100 per cent post-consumer recycled content (see the update at http://www.environment.gov.au/sustainability/government/ictplan/guidance-materials.html);
- participation by ICT suppliers in the National Packaging Covenant by July 2011 or compliance with the National Environment Protection (Used Packaging Material) Measure (UPM NEPM); and
- adoption by suppliers of an environmental management system aligned to ISO 14001.
There are transitional arrangements for suppliers to reach some mandatory standards, for example suppliers are given six months from the date of contract signing to align business processes to the EMS ISO 14001 standard (note that this is not EMS ISO certification).
Energy and Carbon Emission Management
A whole-of-government ICT energy consumption target will be developed using various sources, including data gathered from the ICT energy management plans of large agencies, with subsequent progress and performance being monitored through the existing online system for comprehensive activity reporting (OSCAR). Changes will be made to the OSCAR database to support ICT energy and carbon emission reporting in Australian Government operations.
Preliminary analysis indicates that Australian Government ICT operations can expect to improve energy performance by up to 20 per cent on current consumption levels by July 2015 due to improvements to desktop and data centre energy efficiencies. This equates to around 325 000 tonnes of carbon emissions mitigated over the five-year term of the plan. A more accurate calculation will be determined through detailed analysis arising from the whole-of-government ICT energy consumption target process as outlined above.
To ensure the primary objective of improved environmental performance is achieved, the plan sets targets for agencies across their ICT operations. The targets are set at a level to achieve real change. Agencies will implement ICT sustainability initiatives to improve performance equal to or beyond the targets indicated.
Using ICT to Enable Broader Sustainability
ICT can be an enabler of more environmentally sustainable practices within Australian Government operations, and it can also promote sustainability in industry and the broader community. The plan requires agencies to incorporate in their decision-making processes consideration of the effective use of technologies to promote sustainability across its economic, social, and environmental dimensions.
The plan is designed to promote transformational change at both organization level and system level. Its initiatives are, therefore, linked to an agency’s non-ICT operations as well as the policies and programs of the Australian Government overall.
Government of Canada Green Procurement
The Federal Government of Canada has developed a policy on green procurement, effective April 1, 2006. The policy provides useful guidance on green procurement, enabling organizations to adapt and adopt many of its provisions. The policy states:
The policy also supports the federal government in targeting specific environmental outcomes where procurement can effectively be used to mitigate the impact of environmental issues such as Climate Change and can support the protection of biodiversity, natural areas, air, soil and water. Where decisions are made to move forward on realizing specific environmental outcomes through procurement, it is expected this will:
- Demonstrate environmental leadership and influence industry and citizens to use environmentally preferable goods, services and processes;
- Stimulate innovation and market development of, and demand for, environmentally preferred goods and services, making these available and mainstream for other sectors of society; and
- Support emerging environmental technologies.
The policy also contains the following objective and expected results:
It is the objective of this policy to advance the protection of the environment and support sustainable development by integrating environmental performance considerations into the procurement decision-making process.
The Government of Canada expects that the application of this policy will:
- Benefit the environment by contributing to environmental objectives, such as:
- Reducing greenhouse gas emissions and air contaminants;
- Improving energy and water efficiency;
- Reducing ozone depleting substances;
- Reducing waste and supporting reuse and recycling;
- Reducing hazardous waste; and
- Reducing toxic and hazardous chemicals and substances.
- Lever the purchasing power of the federal government to achieve economies of scale in the acquisition of environmentally preferable goods and services, thereby reducing the cost for government and strengthening greener markets and industries;
- Result in more environmentally responsible planning, acquisition, use and disposal practices in the federal government; and
- Support a healthier working environment for employees and for citizens in general through the purchase of environmentally preferable goods and services.
While potentially a little long for many small to medium-sized businesses and organizations, the policy does inform such organizations of what is needed in a green procurement policy. In addition, the Government provides details on its e-waste strategy, helping to address the lifecycle management of ICT assets.
US Government Computer Power Management Purchasing Policy
The Energy Policy Act of 2005 requires US federal agencies to procure products, including ICT, complying to the US EPA Energy Star standards. Executive Order 13423 requires agencies to activate the “sleep” features of Energy Star on computers and monitors and to buy EPEAT™-registered products.