Recommendations from Atea on how to set effective and relevant sustainability criteria in procurement of IT equipment.
In a digitalized world, it is becoming increasingly important to ensure both sustainable manufacturing and usage of IT. Setting sustainability requirements when purchasing IT solutions is your most powerful tool for influencing the IT industry in a more sustainable direction. In this guide we have compiled our best tips on how to set requirements which both have an impact and are manageable for your organization. The guide is based on our knowledge of the industry and the needs of our customers that we have gained due to our position as an independent supplier. It should not be used as fact, but rather this guide should be seen as a recommendation, inspiration or platform to act upon.
OVERVIEW
🍀 Three good things 🍀 Start here 🍀 Supplier/Contracting party 🍀 Manufacturer/Brand owner
🍀 Product and transports 🍀 Dare to challenge! 🍀Get more support! 🍀
Three good things
Setting sustainability requirements can be perceived as complex and resource intensive. By focusing on three things, you will be laying a very good foundation for sustainable procurement of IT, without needing extensive knowledge and time-consuming follow-up.
Choose a manufacturer that is a member of the RBA (at least Regular Member)
RBA members are committed to following a shared code of conduct, regularly conduct risk assessments and audits in their supply chain, as well as remedy non-compliances. They have also made a commitment to strive for continuous improvement. The code is updated every three years, which means the standard is continuously raised.
List of members and type of membership
Ensure take-back
Make sure that you already at the point of purchase have a plan for how the products will be recovered after use, for example by including take-back clauses in agreements. Make sure that the products you send back are primarily reused and secondarily recycled.
Choose products certified according to TCO Certified(when possible)
TCO Certified sets comprehensive sustainability requirements throughout the product life-cycle. The requirements include both social requirements (such as work hours, working environment and wage conditions in factories) as well as product requirements (such as energy efficiency and limitation of harmful substances). There are also several requirements to extend the life of products. All requirements are mandatory and compliance is checked before labeling. Therefore, you do not need to have expertise within these areas or use resources to follow up.
”We discovered that when we set sustainability requirements, we are guaranteed suppliers who have well-functioning processes.”
— Sofia Nygård, unit manager client, Chalmers School of Technology
START HERE:
What should the requirements lead to?
The IT industry's challenges are numerous and complex, and a single procurement can and should not address them all. Sustainability requirements that are set "because one is supposed to" or without considering the circumstances of the product category will not achieve the goal: increased sustainability. The same applies if your organization lacks the ability to ensure that the requirements are met or complied with. Therefore, start off by asking yourself some basic questions:
What do you want to achieve?
Think about what your main driving forces are for setting sustainability requirements and what the greatest risks to your organization may be. Maybe it is especially important for you to focus on fair working conditions? Or perhaps you have ambitious goals to reduce your CO2-emissions? Think about how the way you purchase IT could help your organization achieve your sustainability goals and reduce the negative effects of your operations.
What is a reasonable level for your organization?
Adjust the level of ambition to the knowledge and the resources available to follow up on the requirements you set. However, the lack of resources or in-house expertise does not mean that you should refrain from setting sustainability requirements. Instead, it comes down to how you choose to formulate them (see “Three good things” at the top).
What challenges are most pressing for the IT industry?
Although many sustainability aspects are common, each industry is unique. The requirements you set when procuring IT should therefore be framed based on the challenges that are most relevant for the IT industry and for the solutions you wish to purchase. Through dialogue with the suppliers you can gain a better understanding of what would be important to prioritize in a specific procurement.
Some basic tips
Before we focus deeper, here are some tips to lay a solid foundation in order to get the effect that you want.
Talk to the market!
Both IT and sustainability are developing fast, and what is considered leading today can be base-level tomorrow. Therefore it may be difficult to know what requirements are possible to set today, and how many suppliers that are able to meet them. Carrying out a proper market dialogue requires time and resources but in return provides a deeper understanding of the conditions, which in turn helps you to set effective and accurate criteria. Thorough preparation also saves time in the often stressful tender phase.
Tip!
If you already in the tender phase communicate the follow-up plan, tenderers are less likely to gamble. Instead it gives them the opportunity to estimate how much resources the follow-up will require.
Use evaluation criteria
If you want to evaluate how far the various actors have come in their sustainability efforts and give yourself the opportunity to award the suppliers and manufacturers who are at the forefront, you can make use of evaluation criteria connected to price reductions. This way you are contributing to the movement of the entire industry as it increases the incentive for other actors to further develop their sustainability efforts.
Dare to make a choice!
For best effect, choose fewer evaluation criteria that are important to you and where you can make stringent requirements. Otherwise, there is a risk that all tenderers are good at something, making it difficult for you as a buyer to determine which supplier works most in line with your values.
Avoid categorical formulations
Avoid requirements in the style of ‘the tenderer must guarantee complete compliance with sustainability throughout the entire supply chain’, as this is impossible in reality. The industry’s enormous scale and complexity limits the influence and traceability for both the tenderer and the manufacturer. What you can demand, and also follow up on, is that suppliers and manufacturers work systematically to identify and manage the risks.
Request proof before you make a decision
Request evidence for both evaluation criteria and obligatory requirements. That will make it easier to filter away less serious actors and reduce the risk of the requirements not being met later on.
Follow up!
Following up the suppliers' and brand owners' sustainability efforts in a systematic and continuous manner will make a difference. Requirements that are not followed-up during the contract period run the risk of becoming empty words which in turn erodes your opportunity to influence the industry’s sustainability efforts.
Address the right requirements to the right party
Distinguish the requirements you place on the supplier/contractor (e.g. Atea), manufacturer/brand owner (e.g. Apple, Dell) and on specific products (see section Examples).
95/5: The importance of harmonization and standardization
About 95 percent of all sustainability requirements today are similar, but it is the remaining 5 percent
that takes the most time and resources as they require individual adjustments both regarding reporting and monitoring. A harmonization of requirements makes it easier for both manufacturers and buyers and at the same time directs focus towards the challenges that are the most important to solve. Therefore, strive to formulate your basic requirements in line with already existing frameworks and guidelines, such as the United Nations Global Compact and ILO's core conventions, OECD Guidelines for Conflict Minerals, RBA's Code of Conduct (see below), GHG Protocol for reporting climate emissions and established sustainability labels such as TCO Certified.
Do you want to set tougher requirements than that? Use evaluation criteria!
Requirements placed on supplier/contracting party
Example
A supplier does not have the same influence in the supply chain as a manufacturer/brand owner has but can have a positive influence by gathering customers' sustainability requirements and directing them further back in the chain. What suppliers can and should do is work systematically by monitoring the supply chain, identifying risks and actively working to avoid and minimize adverse impacts. Suppliers can also engage actively to influence and accelerate the entire industry’s sustainability efforts.
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By requesting the following you can lay a solid foundation and ensure that the supplier has a systematic approach towards sustainability:
★ The supplier has a code of conduct which also applies to the supply chain and is based on – and refers to – international standards such as the eight ILO core conventions and the principles of the UN Global Compact (see example).
★ The supplier has a process in place for reviewing their suppliers, including established routines for deviation management. This can be proved by for example a sustainability report.
★ The supplier has an internal code of conduct for acting ethically and professionally when working together with customers, partners and investors. Part of the this may be that the supplier actively works to prevent corruption or works in accordance with ISO 37001.
★ The supplier has established a person responsible for sustainability.
★ The supplier has quality management systems and environmental management systems in place according to ISO 9001 and 14001.
★ The supplier has a publicly available sustainability report, including a climate report which includes at least scopes 1 and 2 (see fact box).
★ The supplier has a take-back process for IT equipment which is environmentally correct and safe and includes feedback reports. This can be proved by environmental certificates, policies and a description of routines, as well as providing an example report (see fact box).
If you want to award suppliers who are at the forefront in terms of sustainability (for example through evaluation criteria) the following can be requested:
★ The supplier works proactively to spread knowledge and guide customers in issues related to sustainable IT.
★ The supplier's work within sustainability is evaluated and certified according to an independent third party, for example EcoVadis, and is considered to maintain a high level.
★ The take-back process provided by the supplier assures that hardware is primarily reused and secondarily recycled (see fact box).
★ The supplier's climate report also includes scope 3 (see fact box).
★ The supplier is in line with the 1.5-degree climate target, which can be proved by a Science Based Target (SBT) or other external verification.
★ The supplier works to promote the entire industry's sustainability work through active membership in, for example, the Responsible Business Alliance or Exponential Roadmap Initiative, and/or runs its own initiatives for this purpose.
Requirements placed on manufacturer/brand owner
Example
Brand owners have a greater amount of influence over the actual conditions during the manufacturing stages, as they are often positioned further back in the supply chain than the supplier/contracting party and in some cases own their own factories or purchase directly from a manufacturer. Requirements related to manufacturing and social conditions are therefore best placed at this level and not on the supplier/contracting party. The requirements should relate to the commitments made by the manufacturer/brand owner in terms of sustainability, management systems and transparency in sustainability reporting. This can for example be proven through membership of the Responsible Business Alliance (RBA) at the level Regular Member.
Among other things, this means that the manufacturer:
★ conducts risk assessments of manufacturing facilities, both those owned by the manufacturer itself and those owned by subcontractors.
★ conducts independent third-party audits at the facilities where potential or actual problems are identified, and that deviations detected through audit are managed in line with RBA's standards.
★ Has committed to follow the RBA Code of Conduct which is in line with common public procurement requirements.
Manufacturers who are not members of the RBA can meet these requirements by submitting supporting documents showing an equivalent way of working.
What you want to ensure is that the manufacturer has:
★ a public commitment towards sustainability as well as established management systems to implement policies, audits and to systematically identify and manage risks.
★ transparent reporting (such as a public sustainability report, including scope 1 and scope 2 climate calculations) and audit results at an aggregated level.
★ a public Conflict Minerals policy and works in line with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. (This commitment is part of the membership of the RBA.)
If you want to award manufacturers who are at the forefront in terms of sustainability (for example through evaluation criteria) the following can be requested depending on your organization’s priorities:
★ The manufacturer's climate reporting also includes scope 3 (see fact box above).
★ The manufacturer is in line with the 1.5-degree climate target, which can be proved by a Science Based Target (SBT) or other external verification.
★ The manufacturer has initiatives in place to strengthen the workers' right to influence so called workers' voice.
★ Manufacturers engage in local, capacity-building initiatives, such as supporting local initiatives and increasing the supply of sustainably extracted minerals in the Democratic Republic of the Congo.
★ The manufacturer has goals for increasing the level of circularity in the business model and decrease the dependency on virgin materials.
Tip! In a pre-procurement dialogue, you can ask manufacturers for examples of what they do on issues that are important to you.
”We found that if we prioritize sustainability, it will be cheaper for us in the long run. The products may cost more to acquire but will last longer and cause less trouble.”
— Sofia Nygård, unit manager client, Chalmers School of Technology
Requirements placed on product
Example
When you set sustainability requirements for specific products, these should be directed to the product's properties and usage, for example power consumption, battery capacity, availability of spare parts, chemical content or packaging. When it comes to requirements directed towards manufacturing and social conditions in the supply chain, it is not advised to place them on the product itself, but rather address them to the manufacturer. This is because manufacturing facilities produce incredibly large volumes of products, as well as supply chains being dynamic, which results in disproportionate efforts needed in order to track individual product units. The work is performed on a more systematic and higher level. The best way to set sustainability requirements on a product level is to demand some form of eco-label, see box below.
Transports
Transports make up a small part of the total impact of IT products, but the majority of the emissions from the transports take place between the factory and the Nordic countries. With a little planning and foresight, you can choose more sustainable modes of transport, such as trains, from the factory but also more efficient transports within the country.
A few words on eco-labels
Eco-labels help you find products that are produced with extra consideration taken towards the environment and/or social conditions.
• Eco-labelled should meet specific environmental and/or social requirements which are often more rigorous than legal requirements.
• An independent party determines which requirements products should fulfill in order to get labelled. For Type 1 labels compliance is also verified through accredited third-party audits.
• The most common eco-labels are TCO Certified and Epeat. Both labels are extensive and include social and environmental requirements but differ slightly in methodology. For Epeat, the product must be Epeat-registered in the country where the product is sold for the label to be valid; however, the criteria can still be met. Check with your supplier!
The availability of eco-labelled products varies for different product categories. We therefore recommend that you research which type of label is suitable for your needs and priorities prior to procurement.
Dare to challenge!
A lot of what we do is based on habit and established ways of thinking, but in order to achieve real change it is important to dare to shift our focus and challenge:
The way you purchase IT
Sustainable IT is built on using existing resources as efficiently as possible. Therefore, dare to challenge and question the way you purchase IT. Instead of thinking product, think function. The benefit of IT does not come from owning the actual equipment but rather from using it. For example, leasing the equipment can yield significant sustainability benefits, not least through the take-back process in place, but also financial benefits from purchasing a complete process where you can optimize the usage, have complete control over the equipment and only pay for what you use.
Your way of thinking
The purchase price does not always reflect the actual cost of a product. To get a more accurate picture, it can be valuable to include parameters such as total cost and life-cycle cost in the procurement process. What will be the cost of a product purchased, used for a short period of time and then discarded compared to one that can be repaired and upgraded, is compatible with additional parts, and has a high residual value?
Your supplier
How can your supplier help you reach your goals, both in terms of budget and sustainability? What are the best solutions tailored to your needs? Challenge your suppliers to think outside the box!
Get more support!
You don't have to start from scratch. Here is some additional inspiration, knowledge and guidance.
★ The National Agency for Public Procurement has criteria for IT and telecom products.
★ TCO Certified's overview of the criteria included in their certification and that can be used both as inspiration and when it is not possible to request certified products.
★ RBA's transparency guide with material indicators to include.
★ Global Electronics Council has several Purchaser Guides for different sustainability areas.
★ Public procurers can find support at Adda (previously SKL Kommentus) and Kammarkollegiet (The Legal, Financial and Administrative Services Agency), and why not each other? An under-valued resource!
★EU Green Public Procurement criteria (GPP) for ICT equipment. Strong focus on circularity.
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