Organizations may choose to pursue a green purchasing policy for several reasons. Green purchasing can help an enterprise economically as well as lighten its environmental impacts. Green purchasing also can help organizations improve their efficiency, reduce liabilities, and gain competitive advantage. The fact is that a green purchasing program is an excellent way of finding products with a high price-performance ratio and with improved use rates.
Reduced Total Costs
A green purchasing program has several advantages for the business community. Reduced costs are high on the list. Green purchasing strategies can save organizations money on supplies they need to stay in business.
Organizations that implement a green purchasing program have achieved the following cost savings:
- Reduced hazardous management costs (e.g. using less toxic products).
- Reduced operational costs (energy savings from efficient equipment).
- Reduced disposal costs (hazardous and solid waste) by generating less waste and using longer lasting products.
- Reduced repair and replacement costs when using more durable and repairable equipment.
- Reduced employee safety and health costs at the facility with reduced potential liability by improving the work environment and minimizing risks to workers
- Reduced material and energy consumption.
Evaluating a potential purchase by first cost alone can actually incur greater total costs for an organization. An organization's green purchasing program can help identify and reduce hidden costs and develop cost reduction strategies for the entire organization.
Enhanced market position:
Many organizations have also adopted environmental purchasing policies for traditional business reasons such as:
- Recognizing market preferences, and serving customers who have a stated interest in "environmentally friendly" products and practices
- Distinguishing an organization and its products from competitors
- Increasing operating efficiency
- Joining an industry or international market trend to capture market share
- Improved compliance with environmental regulations
Government agencies may be subject to funding incentives. Federal agencies have the incentives provided by Executive Order 13101
and some regulations.
Ease of implementation:
A green purchasing strategy is compatible with existing purchasing programs. Minor policy changes can produce great effects for an organization that is not currently considering long-term costs for each purchase. What purchaser would argue with eliminating unnecessary purchases or reducing overall costs?
Organizations can easily try implementation on a limited basis. Organizations can utilize a step-wise approach to implementation. As the results for early changes are measured and understood, it will be easier to spread the practice to other products and services. Purchasing professionals have tremendous influence in the market. Suppliers who value your business will do what they can to accommodate environmental standards you set for the products you purchase.