Module 2: Environmentally Preferable Purchasing (EPP)

Reasons for Changing to EPP

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Organizations may choose to pursue an EPP policy for several reasons. It can help an enterprise economically and lighten its environmental impacts. EPP also can help organizations improve their efficiency, reduce liabilities, and gain competitive advantage. The fact is that an EPP 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 offers 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 an EPP 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 more-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

Ease of implementation

An EPP 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 use a step-wise approach to implementation. As the results for early changes are measured and understood, spreading the practice to other products and services becomes easier. 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.

Closing the Loop

“Buying Recycled” supports our recycling programs by closing the recycling loop. Historically, the focus of recycling has been on collecting recyclables. Very little attention was given to purchasing recycled products. With a plentiful supply of common recyclables and a low demand for recycled products, the market prices for recyclable materials were low. In some areas of the country, there simply was a glut of recyclable materials. As a result, the cost of the collection service often exceeded the revenue from the sale of the material in government facility recycling programs. This is a function of the simple economic concept of supply and demand. A solution to the economic woes of recycling programs is to increase the demand for recycled content products by preferentially buying them. This is the number-one reason why we should buy recycled.

Increasing the demand for recycled products will provide an incentive for manufacturers to develop new technologies for using recovered materials. Implementing affirmative procurement will create that demand. As technologies are developed and improved, prices of recycled products will become more competitive and the quality of recycled products will continue to improve. Buying recycled has a number of environmental benefits.

It results in energy savings. For example, it takes 95 percent less energy to manufacture an aluminum can from an old aluminum can than it does to make a can from raw materials, because energy is not expended to mine and refine the bauxite ore.
It conserves resources. Obviously, fewer raw materials are used if products are made from materials taken from the waste stream. In addition, the materials diverted from the waste stream will not reach a landfill or incinerator. Reductions in landfilling and incineration will result in less environmental contamination and longer service lives for these facilities.
Recovered materials provide feedstocks for several domestic industries, including steel, aluminum, and paper.
The recycling industry provides jobs for many Americans.

Buying recycled products has economic benefits as well. The prices of many recycled products are lower or comparable to the non-recycled alternatives. However, even when initial costs are higher, often the long-term costs are reduced due to durability, less maintenance, reduced energy usage, and reduced disposal costs.

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