Materials Purchasing: Proven Tactics for Driving Sustainability
When building a more sustainable business, one of the most fruitful areas for potential improvement is to engage in Environmentally Preferable Purchasing (EPP) to reduce the environmental impacts associated with your materials and chemical components. However, making changes to your materials also carries a certain degree of risk. Making decisions without thoroughly forecasting potential emissions can put your facility’s permit compliance in jeopardy and your reputation as a sustainability leader at risk.
There’s even the potential for risk whenever a vendor changes the composition of one of their products: an unexpected change could be enough to push your VOC emissions over your regulatory limits. Mistakenly using even trace amounts of a little-known banned substance that went unnoticed by a purchasing manager can have a big impact on your profitability and lock you out of a valuable market that restricts the use of certain substances.
The best defense against these types of risks is implementing a systematic approach to validate chemical components of any new or modified substance before it even enters your facility. You can even go a step further and anticipate emissions before they’re generated. Think of it as a more proactive form of Environmentally Preferable Purchasing. This approach does require frontloading the calculations and emissions accounting that your EH&S department typically does near the end of the year for regulatory compliance reporting, but the risk aversion benefits of this system are immense.
Implementing a Gatekeeper System for EPP
Making proactive EPP a core leadership value requires concrete action. The effort required to frontload the work is data and research intensive and it’s essential that you follow a systematic approach in your chemical vetting processes. By setting EH&S policies that outline a systematic analysis of all incoming materials, your environmental management team will be able to ensure nothing slips through the cracks.
ERA works with manufacturers across a number of industries to implement this style of comprehensive “Gatekeeper System” – here are some of the steps we encourage manufacturers to take in order to defend themselves from the risks associated with purchasing new materials.
1. Mapping your channel filters
The first step is to create a database that accounts for the variables in your three main compliance reporting channels: external compliance reporting, internally determined goals, and any voluntary programs you participate in, like GRI sustainability reporting. These variables represent the specific vetting guidelines that you’ll use to evaluate potential materials. They will also reflect any goals your organization has for each obligation. These variables are generally related to material or chemical properties and can be anything from the percentage of VOC per unit volume, to the total concentration of dioxins. These values will be specific to your company’s compliance requirements and environmental performance goals.
For most companies, setting up this first line of filters will require creating a database of all specifically banned and/or reportable substances for each reporting channel. The simplest way to ensure that alternative chemical names don’t cause confusion is to reference the CAS number of each chemical when compiling your lists.
However, you do not have to limit yourself to evaluating materials solely by the chemicals they contain. You can begin requesting that vendors supply information such as total energy usage per unit of production, or total CO2e per unit of production, if you feel that evaluating these metrics is also important.
Finally, any emission limits and thresholds associated with reportable substances will need to be added to this preliminary database so the contribution of that material to each threshold it affects can be related.
2. Compiling your regulatory library
The end goal is to create a comprehensive and dynamic database that ensures any new or modified materials are verified as compliant and/or low-risk towards your compliance status. In order for this first line of defense to be continuously effective, someone within your EH&S department will need to research and monitor regulatory changes to ban lists and emission thresholds. They will also need to monitor updates to your voluntary reporting guidelines.
3. Evaluation of best environmental options
Once this library of regulations is complete, your environmental leadership team needs to create a series of policies addressing materials that pass the first level of filters.
In general, we suggest requiring emission forecasting for VOCs, HAPs and VHAPs, as well as greenhouse gases and any hazardous by-products. Putting these policies into practice then gives you a clear picture of your potential environmental footprint for any potential new product. The goal is to gather as much environmental data about potential materials as possible so that any decision you make will be well informed.
4. Validating your new Gatekeeper System functionality
The next step is to route all incoming materials through your new Gatekeeper System. Depending on your company’s goals, you may simply end up using the system to ensure no banned materials enter your production processes. Many facilities also use this system to evaluate their future criteria emission levels well before the product life cycle begins, as they look to continuously improve their environmental performance.
For example, many operating permits in the state of Texas contain a chemical flexibility or material usage flexibility clause which restricts the use of any material that is expected to increase the amount of VOC emissions generated during normal operating procedures. Any business operator looking to change the materials in their chemical inventory will need to forecast the potential air emissions of any new product to ensure it generates a lower quantity of emissions.
Advanced Environmental Preferable Purchasing Options
If your business already employs this type of proactive purchasing approach, there are more sophisticated measures you can apply to increase your EPP capabilities. One of the most important steps to take is to collect product data directly from your vendors in order to streamline the data retrieval and validation steps.
For example, some manufacturers create a secure online portal or a spreadsheet template that all vendors are required to complete for each product. This allows your team to upload product data and run it against your regulatory database to evaluate potential product choices in a much simpler fashion. It can also be used to ensure the data you capture is more accurate by demanding increased accountability from your vendors.
Some vendors can be hesitant to provide electronic copies of their data in this manner, but overall vendors that do participate find they have less work and field fewer support calls, without sacrificing the security of their proprietary information. Several large manufacturers and OEMs have already made the shift to digital data collection, so vendors are beginning to see it as the new way of doing business. Smaller businesses that may have less influence over their own supply chains often find partnering with others who already have established vendor relations to be a profitable maneuver.
Implementing a Gatekeeper System approach in tandem with your company’s vendors enables an even more ambitious sustainability project: comprehensive accounting for the total environmental footprint of your products through each link in the supply chain.
Once you have developed the forecasting protocols for use in your own facility and built a secure system of data exchange with your vendors, it is possible to start collecting emissions and energy usage data from your vendors in the same way you collect chemical component data. Under these conditions, a Gatekeeper System can be used to drill down through the entire supply chain for emission data, energy usage, and carbon footprint. In order for this system to work, however, the entire supply chain needs to be on board and feeding data into the gatekeeper using a single information channel.
This can be quite an undertaking and will require pressure from OEMs, though the potential environmental management and sustainability benefits are huge.
By implementing some form of systematic chemical vetting controls, you will be protecting yourself from inadvertently inviting risk into your facility while dramatically improving your sustainability, purchasing, and control over your supply chain.
If state regulations in Texas –and other states with booming industries – indicate anything, this style of proactive stewardship may quickly become the minimum requirement for doing business in North America.
Gary Vegh is co-founder of ERA Environmental Management Solutions with more than 15 years of experience in providing software solutions to manufacturing companies looking to comply with complex environmental regulations. Vegh graduated from Concordia University – Montreal, where he studied Chemistry/Ecotoxicology. He later moved to Raleigh, NC to work in the Research Triangle, where ERA was founded to meet the compliance needs of the local wood furnishing industry. Today the company’s clients include Volkswagen, Toyota, Nalco, Vigor & BMW. Check out ERA’s All-in-One Environmental Management & Compliance Software.
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