Guide: Business

From Common Energy UVic

Focus Area - Business

Contents 1 Purchasing 1.1 Goal: To achieve sustainable consumption practices in partnership with the campus community, suppliers, and other large institutions. 1.2 Objective 1: To raise awareness of the products purchased and consumed by UVic and encourage green purchasing decisions. 1.3 Objective 2: To work with the campus community to adopt the best practices of green purchasing to improve triple-bottom line performance. 1.4 Objective 3: To create a Sustainable Purchasing Group to leverage demand to reduce the costs of green products and spur innovation in sustainable products. 1.5 Objective 4: To develop a closed-loop, cradle-to-cradle, purchasing system through product-of-service contracts. 1.6 Case Studies - Purchasing - Interface 2 Investment 2.1 Goal: To reduce the risk to the portfolio’s value from investment in firms without greenhouse gas emissions reduction policies or actions, and use the influence of the university’s investments to reduce GHG emissions in the private sector. 2.2 Objective 1: To evaluate the risk profile of the portfolio from a climate change perspective, and adopt environmental, social, and governance principles for investment. 2.3 Objective 2: To create an internal committee of students, staff, and faculty to guide a climate strategy for investment. 2.4 Objective 3: To lead a national initiative for a Climate Investment Standard for post-secondary education institutions. 2.5 Case Studies - Investment - Canadian Pension Plan

[edit] Purchasing

Developing a strategic purchasing policy will make UVic an innovative leader in the campaign against climate change. UVic’s purchasing practices comprise one of the most complex elements in the need to reduce the greenhouse gas footprint of the university. There is potential for immense greenhouse gas savings. However, there are competing interests for cost and quality in the products UVic purchases and consumes. A triple-bottom line approach to purchasing, balancing social, economic, and ecological costs and benefits, is a guiding principle for achieving sustainable consumption practices. Furthermore, encouraging members of the campus community to reduce wasteful consumption will achieve savings that can offset potential increases in costs.

UVic can develop a sustainable purchasing policy to reduce consumption and ensure all the materials embedded in products can be re-used, recycled, or composted. The following proposals aim to close the material loops that supply UVic and encourage products to be designed to pass sustainably from cradle-to-cradle. In a cradle-to-cradle system the manufactures and suppliers are responsible for the safe remanufacturing of their products once they reach the end of their useful life. A product-of-service system is an important part of the transition from linear to cyclical purchasing. The consumer purchases access to a service, such as transportation or carpeting, from the supplier, and this long-term relationship provides an incentive for the supplier to provide that service with goods as efficiently as possible.

Sustainable purchasing is an area that has seen considerable innovation in recent years and promises enormous opportunities in the years to come. Two major barriers are the lack of economies of scale to reduce prices and increase reliable supply, and a lack of knowledge. Common Energy proposes that UVic create a Sustainable Purchasing Group with other public sector organizations to achieve economies of scale and focus on areas for innovation and knowledge sharing.

[edit] Goal: To achieve sustainable consumption practices in partnership with the campus community, suppliers, and other large institutions.

Objective 1: To raise awareness of the products purchased and consumed by UVic and encourage green purchasing decisions.

Objective 2: To work with the campus community to adopt the best practices of green purchasing to improve triple-bottom line performance.

Objective 3: To create a Sustainable Purchasing Group to leverage demand to reduce the costs of green products and spur innovation in sustainable products.

Objective 4: To develop a closed-loop, cradle-to-cradle, purchasing system through product-of-service contracts.

[edit] Objective 1: To raise awareness of the products purchased and consumed by UVic and encourage green purchasing decisions.

Strategies:

1. Conduct a campaign to engage the campus community members as they interact with products, e.g. explain the benefits of 100% recycled paper at printing stations, or explain the difference in energy usage between old and new computers. (See University Challenge)
2. Encourage campus members to reduce their unsustainable consumption practices, particularly of disposable consumer goods. Make options available, providing incentives, and phasing out wasteful practices such as the use of paper or plastic cups. (See University Challenge, Food)
3. Work with impact-assessment organisations, such as Zumer, to publicize and rate the environmental impact of the goods and services that UVic purchases. Zumer.com is based on the UVic campus; it uses an open wiki to provide research to consumers about the environmental and social effect of many major and local companies.
4. Showcase innovative green products that UVic purchases, or is considering purchasing, to educate and familiarize the campus community and encourage their widespread adoption.

[edit] Objective 2: To work with the campus community to adopt the best practices of green purchasing to improve triple-bottom line performance.

Strategies:

1. In collaboration with the Climate Solutions Network and Zumer.com, research the ecological and social impacts of current purchasing practices and assess the options to change purchasing practices so they improve triple-bottom line performance. (See Teaching and Learning)
2. Publicize results with large charts in high-traffic areas that compare the triple-bottom line costs and benefits of green purchasing choices.
3. Change purchasing decisions in low-cost and high-benefit areas first, while using the graphs and campaign from Objective 1 to encourage reduced consumption in areas that are high-cost and high-benefit. Low-cost, low-benefit areas are the next priority for changing purchasing decisions, while high-cost, low-benefit is the lowest priority.
4. Shift to purchasing only products certified by trusted ratings systems such as ENERGY STAR, EPEAT, and Green Seal, using triple-bottom line cost-benefit analysis to identify priority areas.
5. Request annual reports from UVic's contract suppliers, ensuring high environmental, social, and governance standards in their operations.

[edit] Objective 3: To create a Sustainable Purchasing Group to leverage demand to reduce the costs of green products and spur innovation in sustainable products.

Strategies:

1. Develop a Sustainable Purchasing Group with other public sector organisations to provide the scale of demand and negotiating power required to reduce prices in high-cost, high-benefit purchasing areas.
2. Through the Sustainable Purchasing Group and in collaboration with the new BC core government purchasing initiative and BC Sustainable Purchasing Network, establish a shared set of sustainable purchasing standards for public sector organizations, which can then be adopted by other sectors.
3. Use these sustainable purchasing standards to negotiate with suppliers for improved triple-bottom line performance.

Make suppliers aware of the Sustainable Purchasing Group's triple-bottom line objectives and indicate that preference will be given to suppliers that strive to meet and exceed these objectives.

1. Work with the Climate Solutions Network and UVic faculties to help businesses meet the criteria and establish new competitive advantages. (See Teaching and Learning)

[edit] Objective 4: To develop a closed-loop, cradle-to-cradle, purchasing system through product-of-service contracts.

Strategies:

1. Promote and encourage the development of campus-based products-of-service systems with a computer-service pilot project.
2. In phase 1 of the pilot establish computer-service agreements for UVic’s computer labs. In phase 2 expand this system to all computers purchased by UVic.
3. In phase 3 of the computer-service pilot project the system would be expanded to UVic’s computer retailing. In this system, the UVic Computer Store sells the service of computing to its customers. The computer store, working with the Computer Help Desk, is then responsible for providing the service, and maintaining and upgrading the computers, reusing and replacing components whenever possible.
4. Expand the products-of-service model to other UVic businesses based on the lessons learned from the computer-service pilot.
5. Ensure that suppliers are responsible for the safe recycling or re-use of the products they provide to the university. Specify this requirement in contracts, particularly in rental, lease and service contracts, to encourage suppliers to design and provide products that are long lasting and easily recycled into their component parts.
6. Request product-of-service contracts from major suppliers.
7. Work with the Climate Solutions Network, UVic faculties and local businesses to develop world leading green business practices in our region to meet the demand for product-of-service contracts. (See Teaching and Learning)

[edit] Case Studies - Purchasing - Interface

Interface Corporation has led the way on designing and delivering the product-of-service business model. Interface is the world's largest carpet company, and they plan to be the first environmentally restorative carpet company in the world by 2020. The company does not sell carpets to consumers. Instead, it provides the service of carpeting and retains ownership over the material components that it uses to provide that service.

This arrangement means that the company can reclaim the industrial materials embedded in the carpets. This has a threefold advantage: (a) the consumer is not responsible for disposing of the carpet, and (b) Interface designs the carpet to be re-manufactured and captures value that would otherwise go to the landfill, and (c) the carpet is designed in interlocking patches so that worn out areas can be replaced without ripping up the entire carpet.

[edit] Investment

The University of Victoria’s endowment and pension funds have the power to affect the environmental practices of firms in its portfolio. UVic's investment policy is well planned, balanced, and sound; however, climate change poses new challenges to current investments. While UVic is not directly responsible for the greenhouse gas emissions of the firms in which it invests, it has the opportunity to influence their decisions.

Increased public and political concern with the total cost, including environmental and social costs, reveals a new risk to investment policy that needs to be examined. The financial sector is increasing pressure on private enterprise to be accountable for climate change. According to the Social Investment Organization, assets invested according to socially responsible investment (SRI) guidelines in Canada have increased from $65 billion in 2004 to more than $500 billion in 2006, representing nearly 20% of total funds under management. Institutional investors and pension funds have led the way. This pressure is producing positive results, with firms making tangible reductions of greenhouse gas emissions.

[edit] Goal: To reduce the risk to the portfolio’s value from investment in firms without greenhouse gas emissions reduction policies or actions, and use the influence of the university’s investments to reduce GHG emissions in the private sector.

Objective 1: To evaluate the risk profile of the portfolio from a climate change perspective, and adopt environmental, social, and governance principles for investment. Objective 2: To create an internal committee of students, staff, and faculty to guide a climate strategy for investment. Objective 3: To lead a national initiative for a Climate Investment Standard for post-secondary education institutions.

[edit] Objective 1: To evaluate the risk profile of the portfolio from a climate change perspective, and adopt environmental, social, and governance principles for investment.

Strategies:

1. Request fund managers to review the risk profile of the portfolio from a climate change and climate regulation perspective.
2. In the active portfolio, instruct fund managers to consider the climate-risk weightings of investment, increasing the weighting of companies with low climate risk, and reducing the weighting of those with high climate risk.
3. Request fund managers to support initiatives from nationally significant fund managers seeking greenhouse gas emissions disclosure in portfolio firms.
4. Adopt environmental, social and governance principles, the emerging standard for socially responsible investing, for portfolio investments.

[edit] Objective 2: To create an internal committee of students, staff, and faculty to guide a climate strategy for investment.

Strategies:

1. Include students, staff, and faculty with relevant and diverse perspectives on a review committee to leverage academic capacity and support civic engagement in investments. Include this committee in the Climate Governance Network. (See Civic Engagement and Governance)
2. Have the committee initiate and support shareholder initiatives for climate change policies and actions in portfolio firms.

Have the committee consider establishing a list of companies that will not be invested in unless they improve their environmental, social and governance performance.

1. Have the committee present an annual report on the management of university investments to reduce the greenhouse gas emissions of firms in the portfolio.

[edit] Objective 3: To lead a national initiative for a Climate Investment Standard for post-secondary education institutions.

Strategies:

1. Demonstrate leadership by initiating a Climate Investment Standard and inviting all Canadian post-secondary education institutions to join.
2. Combine the knowledge of the member institutions with existing standards and initiatives to develop the new standard.
3. Maximize the influence of these investments by publicizing the Climate Investment Standard, listing the top-performing firms by sector; publicly announce requests for investment proposals in effective climate-change areas.

[edit] Case Studies - Investment - Canadian Pension Plan

The Canadian Pension Plan Investment Board (CCP) is responsible for securing the prosperous retirement of Canadians and currently manages $119.4 billion. The CPP has committed to use its position in firms, over 2,600 world wide, to improve the performance and disclosure of firms on environmental, social, and governance factors.

The CPP is particularly active in securing disclosure of greenhouse gas emissions from their firms. They have joined the Carbon Disclosure Project, an initiative with firms managing $57 trillion dollars in assets worldwide. On February 13th, 2008, the CPP asked Canada's 200 largest publicly traded corporations to respond to the Carbon Disclosure Project's requests for information on climate risks and opportunities.

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