During that 90-minute event (archived webcast available here), attendees posed more than 100 questions but only a small number were addressed. We've provided detailed answers to many questions below.
Is this a duplication of what private industry is already offering? What is SPLC doing that the private industry is already doing, such as Trucost on impact spend and UL Environment on green products?
Far from being a duplication of what the private sector already offers, our work will expand the market and accelerate adoption of the most credible and useful private sector offerings in this area. Our consensus-based program of guidance, measurement and recognition for leadership in sustainable purchasing will refer users to many resources and services provided by private sector enterprises, such as Trucost or UL Environment, and public sector initiatives, includinig those produced by the U.S. Environmental Protection Agency. Many purchasing organizations say they need assistance in understanding which resources and services are relevant to them, and which ones have a leadership orientation that makes them worthy of investment. By providing that assistance, we expect to increase demand for the services of high quality service providers.
Is there an organization that certifies businesses as sustainable across industries?
By our count, more than a dozen organizations offer purchasers scorecards, ratings or certifications for evaluating the enterprise-level sustainability of suppliers. Some use proprietary data and methods for rating businesses, while others certify suppliers against a standard or apply an algorithm to publicly reported data. Some look holistically at social, environmental and economic aspects of sustainability while others go deep on a specific aspect, such as greenhouse gas (GHG) emissions. At this time, it can be difficult for purchasers to know which supplier sustainability assessment tools are directionally accurate, cost effective and credible. One of the first work streams of SPLC will be the production of a buyer guide for use by purchasing organizations seeking tools for evaluating the impacts of their spending and the sustainability of suppliers.
It is worth noting that more than 50 environment, social and governance (ESG) ratings, rankings and indexes have been developed for use by the investor community, according to SustainAbility’s 2010 "Rate the Raters" report. The investor community has responded to the proliferation of so many tools by creating the Global Initiative for Sustainability Ratings (GISR) to develop a common standard for evaluating ESG performance, in the hope that raters, rankers and certifiers will use that common methodology. If successful, GISR’s standard will reduce survey fatigue and improve the transparency and comparability of the assessment tools.
While GISR is focused on developing a standard evaluation methodology that meets the needs of the investor community, it is likely that purchasers and suppliers alike would benefit from an analogous project aimed at developing a standard assessment methodology that meets the needs of the purchasing community. Council members can help determine if such a project should be undertaken, presumably with close coordination with GISR to ensure consistency for companies where data needs overlap.
What work will the council do to develop consistent and functional metrics for use across different sectors?
This is the core purpose of the Council. We seek to create a consistent, practical program for guidance, measurement, and recognition of leadership in sustainable purchasing across multiple types of organizations. The guidance may vary by institution type, because the definition of leadership in sustainable purchasing might vary from university to hospital to corporation, but the overall principles and measurement approach of the program will remain consistent. In all council guidance, for example, spending on product categories with greater impact intensity than others will receive proportionally more weight when evaluating the sustainability of the organization’s total spending on all products.
What is the measurement focus? Is there the ability for organizations to monitor green spending?
Our primary focus is to measure, understand and mitigate social and environmental supply chain impacts and risks. We are interested in helping organizations measure whether their implementation of sustainable purchasing actually results in meaningful improvements for society, the planet and the purchaser. Many purchasers recognize that a simple “% green spend” metric has limited ability to demonstrate such improvements. Many more sophisticated analytical approaches have been and are being developed. The council seeks to help purchasers identify which approaches are most practical and cost effective to implement, and to work with suppliers and procurement tool providers, such as ERP, eProcurement and analytics software vendors, to support them.
Is this a ratings-based program similar to LEED? Is it confined to only the building industry?
SPLC’s leadership recognition program will rate how effectively an organization has assessed and mitigated the impacts associated with their spending on goods and services. Like LEED, the program will include credits for a variety of actions, weighted according to the relative social, environmental and economic benefit(s) associated with each action. Unlike LEED, the program is not limited to the buildings or the building industry. Any institutional purchaser will be able to use the program to evaluate its sustainable purchasing efforts. The first pilot version of the rating system will be created over the next 12 to 18 months. We invite you to join the council and participate in its development.
What is the timeline for the SPLC to release products for use by organizations?
The steering committee has developed a proposed work plan for 2013-2014 that includes releasing a number of work products within six to 12 months, with the pilot version of the rating system being released after 12 to 18 months. The work plan for 2013-2014 will be finalized at the Founding Summit this month with input from representatives of Founders Circle members and strategic partners.
How will NGOs, especially grassroots voices, be adequately represented in this process?
It is very important to us that NGOs, as stewards of the public interest, be well represented in the work and dialogue of the council. Accordingly, we have been recruiting a balanced and representative Founders Circle to include a number of social and environmental NGOs, and we are still seeking to fill several of these spots. In our plan for transitioning from the steering committee to board governance, we also have reserved at least one-third of the board spots for NGOs and public interest voices. Additionally, the program development process will be structured to ensure that NGO and public interest voices are included, and also that no single interest group is able to dominate the conversation or decision-making.
Do you have any resources for purchasing software that can track sustainable attributes? Or plug-ins for existing procurement software?
Some software solutions do exist, but many are incomplete because purchasers have not coordinated what data they want from suppliers in such a way that software providers can facilitate the delivery of that data. The SPLC hopes to provide some coordination and clarity around this issue. For example, we are in conversation with existing procurement software providers to develop an Application Program Interface (API) to allow existing procurement software to seamlessly integrate the council’s leadership guidance.
Next page: SPLC and federal guidelines