UC Sustainable Procurement Program and Policy Overhaul

University of California, Office of the President

Date Posted: May 20, 2019
Submitted by: Stephanie Lopez
Sustainability Topic: Purchasing
Content Type: Case Studies
Office or Department: Purchasing/Procurement

Project Overview

Purchasing departments, such as those of the University of California campuses, have embraced the responsibility and opportunity to leverage their purchasing power as a force for good. But assessing and managing sustainability performance (environmental, social, labor and ethical practices) across a widely decentralized organization, while also adhering to public procurement constraints, poses huge challenges. In the summer of 2018, UC implemented a progressive new version of their Sustainable Practices Policy which included an updated and more robust Sustainable Procurement section focused on setting sustainability goals for major areas of spend and the groundwork for innovative sustainable sourcing standards. A key component of the new Sustainable Procurement policy and Guidelines has been to focus on establishing means to measure progress over time in the areas of ‘Green Spend’ as well as ‘Economically and Socially Responsible spend.’ UC has also piloted the use of an innovative standardized sustainability ratings system to monitor overall supplier practices.

Background

With the emergence of the UN Sustainable Development Goals and laws such as the California Transparency Act, UC set out to define and implement a sustainable procurement program to align with the UC’s mission, especially pillar three, “Public Service.” The systemwide procurement teams saw a lack of connection between UC’s operational goals (Carbon Neutrality, Zero Waste, etc.) and our purchasing practices. UC Procurement also recognized that the limited policy related to purchasing since 2011 only covered environmental impacts, missing the mark by not including economic and social impacts.

The UC system, through the Sustainable Procurement Working Group (a group of representatives from each UC campus procurement team focused on sustainability), conducted an eighteen month process to identify and addressed key areas of opportunity within their procurement processes.

In order to establish a new sustainable procurement policy and guidelines, UC faced the following diverse challenges: Complexity of a large, decentralized organization No effective means and limited resources to measure sustainability in procurement Vague policy language, with no connection to governing procurement policy Diverse financial systems and limited centralized spend data

Goals

The guiding principle for policy development was to set clear and measurable GOALS. This meant creating measurable sustainable procurement requirements, standards and practices. UC defined sustainable procurement based on three axes: 1) material attributes, 2) supplier/vendor practices, and 3) product supply chain impacts.

Policy overhaul: 1. Renamed the program to Sustainable Procurement 2. Developed a companion Sustainable Procurement Guidelines document for the policy clarifying implementation, reporting and associated processes to achieve the goals set out in Policy. 3. New focus on UC’s value of the health and wellbeing of its community and a strong preference for functional alternatives to harmful products 4. Set the following spend goals: 100% compliance with minimum Required Level Green Spend criteria within three (3) fiscal years 25% spend on UC preferred "Green" products per product category within three (3) fiscal years * 25% Socially and Economically Responsible Spend as a % of addressable spend within five (5) fiscal years 5. Required a minimum of 15% of points utilized in competitive solicitation evaluations be allotted to sustainability criteria (effective July 2019) 6. Clarified UC waste reduction priorities - reduce, reuse, and then recycle 7. Updated the UC standards and requirements that packaging for all products procured by the University shall be designed, produced, and distributed to the end user in a sustainable manner.

Implementation

The UC Sustainable Procurement Working Group formed and identified a task force to address this policy overhaul (specifying the need for clear and measurable goals) in February of 2017 and from that time went through a rigorous evaluation process of other guidance, policies and practices found at expert or mature institutions throughout the US. The task force also assessed UC stakeholder needs and gaps in available tools/resources to making more sustainable decisions. The task force outlined initial recommendations to define UC ‘Green Spend,’ ‘Economically and Socially Responsible Spend’ and ‘Sustainable Spend.’
UC Green is spend in select commodity categories (e.g. electronics, cleaning supplies, office supplies) that meets new UC environmental minimum criteria or standards and a more rigorous green goal. For example, Electronics sets a standard that in the next three years all products bought in this category must be EPEAT Bronze certified at a minimum and 25% spend in this category must be EPEAT Gold. The UC Sustainable Procurement Guidelines also set out methods for reporting reductions in spend (not buying the product at all) to count towards campus green spend goals. UC Economically and Socially Responsible (EaSR) is spend with businesses that are either certified as small, women-owned, disadvantaged, veteran or service-disabled veteran, minority-owned or any combination of the above. UC’s goal is that 25% of all addressable spend annually will be with EaSR qualified suppliers. Policy and Guidelines include clear requirements for UC suppliers, updates to UC Terms & Conditions and reporting expectations against goals. As part of the implementation of the new policy and associated Sustainable Procurement Guidelines the Sustainable Procurement Working Group sought endorsement and approval of all recommended changes from the UC Procurement Leadership Committee (PLC), which is comprised of the Chief Procurement Officers (or equivalent) from each campus. The engagement of the PLC was key to establishing real and early adoption of the policy once passed by each campuses central procurement departments.
After the policy was formally approved, the Sustainable Procurement Working Group rolled out updates to UC Terms & Conditions as well as other forms and templates used in their sourcing processes. The SPWG also rolled out a series of trainings and resource materials for UC staff to being engaging against our policy commitments. In tandem with the policy development, UC engaged an external provider of supplier sustainability ratings to help as UC matured its own understanding of its supply chain environmental, social, labor and ethical practices. Leveraging past supplier ‘scorecarding’ experience at various campuses, months of interviews and the SPLC INSIGHT Supplier Sustainability Raters project, UC selected EcoVadis to pilot standardized sustainability ratings for UC. A two-phased pilot of the sustainability ratings platform focused on key commodity categories of UC with a focus on large strategic suppliers as well as testing utilization of the assessment in the Request for Proposal (RFP) process.

Timeline

Feb. 2017 Formation of Sustainable Procurement Working Group and Project Selection Feb. - Nov. 2017 Development of Policy & Guidelines (Policy and Criteria Task Force) January 2018 Contingent approval of draft policy and guidelines received from UC Sustainability Steering Committee March 2018 PLC in-person review of policy implications; contingent approval May 2018 Initial deployment of Sustainability Ratings trial with EcoVadis PLC final approval of Policy and Guidelines with minor updates to language May-Jul 2018 Preparation for UC Presidential review August 2018 Final Policy approval received and implementation begins Sep-Oct 2018 Sustainable Procurement trainings being for all UC April 2019 UC Sustainable Procurement Summit takes place with over 100 attendees from throughout the UC system to receive education and training on sustainable sourcing. July 2019 Allocating a minimum of 15% of the points utilized in solicitation evaluations to sustainability criteria requirement takes effect

Financing

The project was led by UC employees on the UC Procurement systemwide team (UCOP) and from UC campuses via the task force identified by the UC Sustainable Procurement Working Group. Funding for the EcoVadis pilot came from the UC Office of the President (UCOP). In order to operationalize all the changes to the Sustainable Practices Policy, each UC campus committed to continued resourcing of the Sustainable Procurement Working Group and continued education and training related to sustainable sourcing.

Results

  • UC passed the overhaul of the Sustainable Procurement section of the Sustainable Practices Policy in August 2018. This included approval of the new UC Sustainable Procurement Guidelines.
  • UC is closing in on the first fiscal year under the new policy at the end of June 2019 and will be reporting on progress campus by campus in the Annual Report on Sustainable Practices to be released later this summer.
  • As of July 2019, all competitive solicitations conducted by UC campuses and/or the UC systemwide team are required to include at a minimum 15% of all available points for award be dedicated to sustainability (economic, social and environmental) criteria and questions.
  • As of May 2019, UC had concluded a successful two-phased pilot with EcoVadis and is continuing its engagement with the company for ongoing supplier scorecarding and services.

Green Spend Electronics: At least seven (7) campuses have already surpassed 25% Preferred Level Green Spend target. Cleaning Supplies: Nearly all campuses are achieving between 60-95% Green Spend in this category with strategically sourced suppliers (target is 75%). Five campuses have surpassed the 75% target. Office Supplies (Copy Paper): 2 campuses have achieved the 25% Green Spend target. Furniture: 2017 Ergonomic furniture RFP included Minimum and Preferred Level criteria. Awarded suppliers signed an affidavit confirming their products are free of listed chemicals of concern and provided proof of certifications. No data to report yet.

Economically and Socially Responsible Spend (EaSR) All campuses have achieved at or over 10% spend with EaSR suppliers Five campuses are spending over 15% of all addressable spend with EaSR suppliers​

Lessons Learned

  • Sustainable sourcing practices must be resourced and supported by senior leadership within our organization. Without that sucess can be slow or non-existent.
  • Sustainability practices at the company-wide level and product level change rapidly and we as an organization must be prepared to constantly learn, research and innovate with our supply chain. It's a continuous dialog; never presume to have all the answers.
  • You must be transparent with our suppliers, be ready to bring them along with you and don’t forget or force out small and local businesses.
  • Setting performance indicators, goals and tools to measure progress is KEY to your success. You must have a long-term vision in mind that aligns with your larger organization goals.
  • Focus on setting in place a collaborative improvement mentality with suppliers rather than strict pass-fail criteria (you want to bring them along)
  • Engage stakeholder groups at your campus that need your (procurements) help and whom you also need support from, such as your waste management teams, your energy/carbon neutral teams, Green Labs, etc. *

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