Recommendations from Atea on how to set effective and relevant sustainability criteria in procurement of IT equipment.
In a digitalized world, it is becoming increasingly important to ensure both sustainable manufacturing and usage of IT. Setting sustainability requirements when purchasing IT solutions is your most powerful tool for influencing the IT industry in a more sustainable direction. In this guide we have compiled our best tips on how to set requirements which both have an impact and are manageable for your organization. The guide is based on our knowledge of the industry and the needs of our customers that we have gained due to our position as an independent supplier. It should not be used as fact, but rather this guide should be seen as a recommendation, inspiration or platform to act upon.
OVERVIEW
🍀 Three good things 🍀 Start here 🍀 Supplier/Contracting party 🍀 Manufacturer/Brand owner
🍀 Reward actors 🍀 Product and services 🍀 Dare to challenge! 🍀Get more support! 🍀
Three good things
Setting sustainability requirements can be perceived as complex and resource intensive. By focusing on three things, you will be laying a very good foundation for sustainable procurement of IT, without needing extensive knowledge and time-consuming follow-up.
Choose a manufacturer that is a member of the RBA (at least Regular Member)
RBA members are committed to following a shared code of conduct, regularly conduct risk assessments and audits in their supply chain, as well as remedy non-compliances. They have also made a commitment to strive for continuous improvement. The code is updated every three years, which means the standard is continuously raised.
Choose products certified according to TCO Certified (or other type 1 certification)
TCO Certified sets comprehensive sustainability requirements throughout the product life cycle. The requirements include both social requirements (such as work hours, working environment and wage conditions in factories) as well as product requirements (such as energy efficiency and limitation of harmful substances). There are also several requirements to extend the life of products. All requirements are mandatory and compliance is checked before labeling. Therefore, you do not need to have expertise within these areas or use resources to follow up.
Ensure take-back
Make sure that you already at the point of purchase have a plan for how the products will be recovered after use, for example by including take-back clauses in agreements. Make sure that the products you send back are primarily reused and secondarily recycled.
Make sustainability count!
If you aim to leverage the full power of procurement to drive sustainability, putting minimum requirements on suppliers will not be enough. Sustainability must be factored into the decision-making process. By weighting sustainability in procurement, rather than focusing solely on price, you create incentives for suppliers to go beyond compliance. The extent to which sustainability is prioritized can be determined on a case-by-case basis. We do not recommend a specific weight, as long as the weighting is enough to make a meaningful impact in the procurement at hand.
START HERE:
What should the requirements lead to?
The IT industry's challenges are numerous and complex, and a single procurement can and should not address them all. Sustainability requirements that are set "because one is supposed to" or without considering the circumstances of the product category will not achieve the goal: increased sustainability. The same applies if your organization lacks the ability to ensure that the requirements are met or complied with. Therefore, start off by asking yourself some basic questions:
What do you want to achieve?
Think about what your main driving forces are for setting sustainability requirements and what the greatest risks to your organization may be. Maybe it is especially important for you to focus on fair working conditions? Or perhaps you have ambitious goals to reduce your CO2-emissions? Think about how the way you purchase IT could help your organization achieve your sustainability goals and reduce the negative effects of your operations.
What is a reasonable level for your organization?
Adjust the level of ambition to the knowledge and the resources available to follow up on the requirements you set. However, the lack of resources or in-house expertise does not mean that you should refrain from setting sustainability requirements. Instead, it comes down to how you choose to formulate them (see “Three good things” at the top).
What challenges are most pressing for the IT industry?
Although many sustainability aspects are common, each industry is unique. The requirements you set when procuring IT should therefore be framed based on the challenges that are most relevant for the IT industry and for the solutions you wish to purchase. Through dialogue with the suppliers you can gain a better understanding of what would be important to prioritize in a specific procurement.
Some basic tips
Before we focus deeper, here are some tips to lay a solid foundation in order to get the effect that you want.
Talk to the market!
Both IT and sustainability are developing fast, and what is considered leading today can be base-level tomorrow. Therefore, it may be difficult to know what requirements are possible to set today, and how many suppliers that are able to meet them. Carrying out a proper market dialogue requires time and resources but in return provides a deeper understanding of the conditions, which in turn helps you to set effective and accurate criteria. Thorough preparation also saves time in the often stressful tender phase.
Tip!
If you already in the tender phase communicate the follow-up plan, tenderers are less likely to gamble. Instead it gives them the opportunity to estimate how much resources the follow-up will require.
Use evaluation criteria
If you want to evaluate how far the various actors have come in their sustainability efforts and give yourself the opportunity to award the suppliers and manufacturers who are at the forefront, you can make use of evaluation criteria connected to price reductions. This way you are contributing to the movement of the entire industry as it increases the incentive for other actors to further develop their sustainability efforts.
Dare to make a choice!
For best effect, choose fewer evaluation criteria that are important to you and where you can make stringent requirements. Otherwise, there is a risk that all tenderers are good at something, making it difficult for you as a buyer to determine which supplier works most in line with your values.
Request proof before you make a decision
Request evidence for both evaluation criteria and obligatory requirements. That will make it easier to filter away less serious actors and reduce the risk of the requirements not being met later on.
Follow up!
Following up the suppliers' and brand owners' sustainability efforts in a systematic and continuous manner will make a difference. Requirements that are not followed-up during the contract period run the risk of becoming empty words which in turn erodes your opportunity to influence the industry’s sustainability efforts.
Address the right requirements to the right party
Distinguish the requirements you place on the supplier/contractor (e.g. Atea), manufacturer/brand owner (e.g. Apple, Dell) and on specific products (see section Examples).
95/5: The importance of harmonization and standardization
About 95 percent of all sustainability requirements today are similar, but it is the remaining 5 percent
that takes the most time and resources as they require individual adjustments both regarding reporting and monitoring. A harmonization of requirements makes it easier for both manufacturers and buyers and at the same time directs focus towards the challenges that are the most important to solve. Therefore, strive to formulate your basic requirements in line with already existing frameworks and guidelines, such as the United Nations Global Compact and ILO's core conventions, OECD Guidelines for Conflict Minerals, RBA's Code of Conduct (see below), GHG Protocol for reporting climate emissions and established sustainability labels such as TCO Certified.
Do you want to set tougher requirements than that? Use evaluation criteria!
UN Sustainable Development Goals
Many organizations have connected their sustainability goals to the United Nations' Sustainable Development Goals and use them as a framework in their procurement. The areas highlighted in this guide, which are most relevant to IT procurement, mainly relate to three goals:
- Decent work and economic growth (goal 8)
- Responsible consumption and production (goal 12)
- Climate action (goal 13)
Examples
Following the guidance listed in "Three Good Things," contributes to the SDGs in the following ways:
- Requirement for RBA Membership contributes to:
- Goal 8 by ensuring manufacturers and suppliers establish processes to identify risks in their supply chain (such as forced labor, health, and safety) and manage violations.
- Goal 12 by mandating members to use resources efficiently and implement processes for managing hazardous substances.
- Goal 13 by requiring goals to reduce environmental impact in RBA's code of conduct.
- By choosing ecolabeled products, you contribute to goal 8 if the certification includes social requirements in production and goal 12 by creating a demand for more sustainable products. By connecting procurement and recovery of used equipment, you contribute to goal 12 by reducing the need for new equipment to be manufactured and to goal 13 through the carbon savings that this entails.
Requirements placed on supplier/contracting party
A supplier does not have the same influence in the supply chain as a manufacturer/brand owner has but can have a positive influence by gathering customers' sustainability requirements and directing them further back in the chain. What suppliers can and should do is work systematically by monitoring the supply chain, identifying risks and actively working to avoid and minimize adverse impacts. Suppliers can also engage actively to influence and accelerate the entire industry’s sustainability efforts.
By requesting the following you can lay a solid foundation and ensure that the supplier has a systematic approach towards sustainability:
★ The supplier has a code of conduct which also applies to the supply chain and is based on – and refers to – international standards such as the eight ILO core conventions and the principles of the UN Global Compact (see example).
★ The supplier has a process in place for reviewing their suppliers, including established routines for deviation management. This can be proved by for example a sustainability report.
★ The supplier has an internal code of conduct for acting ethically and professionally when working together with customers, partners and investors. Part of the this may be that the supplier actively works to prevent corruption or works in accordance with ISO 37001.
★ The supplier has established a person responsible for sustainability.
★ The supplier has quality management systems and environmental management systems in place according to ISO 9001 and 14001.
★ The supplier has a publicly available sustainability report, including a climate report which includes at least scopes 1 and 2 (see fact boxes below).
★ A process for secure and environmentally correct take-back of IT equipment that includes reporting. This can be demonstrated through environmental certificates, policies, and a description of processes, along with sample reports.
Climate reporting
The most common standard for reporting climate emissions is the Greenhouse Gas Protocol (GHG). It divides the emissions into three categories to clarify the source of emissions:
Scope 1
Emissions from sources owned or directly controlled by the organisation. An example of this may be company-owned vehicles.
Scope 2
Emissions from energy purchased by the organisation such as electricity, district heating and district cooling.
Scope 3
Emissions from sources not directly controlled by the organisation, but that is part of the business, for example business trips and procurement.
Ensure a sustainable life cycle management!
55 million tonnes of electronic waste are generated globally every year, and Sweden is second on the list of countries generating the most waste. Electronic waste is the fastest growing waste category and is also the most harmful to the climate. To minimize waste and reduce the climate footprint from IT purchasing one should (in prioritized order):
- Use the equipment longer.
- Ensure that it can be reused by another user afterwards.
- Make sure that the material is recycled when usage is no longer possible.
To ensure a sustainable life-cycle management, where the IT equipment is taken back when you have finished using it, is therefore one of the most important efforts you can make for the climate and the environment - and for you to reach your own sustainability goals.
Requirements placed on manufacturer/brand owner
Brand owners have a greater amount of influence over the actual conditions during the manufacturing stages, as they are often positioned further back in the supply chain than the supplier/contracting party and in some cases own their own factories or purchase directly from a manufacturer. Requirements related to manufacturing and social conditions are therefore best placed at this level and not on the supplier/contracting party. The requirements should relate to the commitments made by the manufacturer/brand owner in terms of sustainability, management systems and transparency in sustainability reporting.
This can for example be proven through membership of the Responsible Business Alliance (RBA) at the level Regular Member.
Among other things, this means that the manufacturer:
★ has committed to implement the RBA's code of conduct, which is based on, among other things, the ILO core conventions, the principles of the UN Global Compact and other established international standards.
★ conducts risk assessments of manufacturing facilities, both those owned by the manufacturer itself and those owned by subcontractors.
★ conducts independent third-party audits at the facilities where potential or actual problems are identified, and that deviations detected through audit are managed in line with RBA's standards.
Manufacturers who are not members of the RBA can meet these requirements by submitting supporting documents showing an equivalent way of working.
What you want to ensure is that the manufacturer has:
★ a public commitment towards sustainability as well as established management systems to implement policies, audits and to systematically identify and manage risks.
★ transparent reporting (such as a public sustainability report, including scope 1 and scope 2 climate calculations) and audit results at an aggregated level.
★ a public Conflict Minerals policy and works in line with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. (This commitment is part of the membership of the RBA.)
Reward actors who are at the forefront
Sustainability requirements in procurement serve two purposes: one is to ensure that suppliers comply with a base level of requierements, and the other is to accelerate sustainable development. The latter, which involves rewarding suppliers at the forefront, is a fantastic tool that can be utilized much more. In this section, we provide some examples of requirements that we believe contribute to advancing the industry in crucial areas. Remember to choose requirements that are relevant to what is being procured. To make the requirements distinctive, we recommend selecting a few areas that are particularly important to you. This will also facilitate the evaluation of the bids.
Award criteria for vendors
- Knowledge & Guidance The vendor proactively educates and provides guidance to customers on sustainable IT. This can be verified through, for example, references.
- Evaluated Sustainability Work The vendor’s sustainability work is evaluated by an independent third party, such as EcoVadis, and is considered to maintain a high standard.
- Circularity The take-back process provided by the vendor aims for hardware to be primarily reused and, secondarily, recycled (see fact box).
- Climate Action The vendor's climate reporting includes scope 3 emissions related to sold products and services, as well as the usage of sold products (see fact box).
- Climate Action The vendor has processes to reduce carbon emissions that are aligned with the 1.5-degree target in the Paris Accord. This can be substantiated through a Science Based Target (SBT) or other external verification.
- Industry Engagement The vendor works to elevate the sustainability efforts of the entire industry through active membership in industry organizations such as Responsible Business Alliance or by driving its own initiatives for this purpose.
Award criteria for manufacturers:
- Climate Action The manufacturer's climate reporting includes scope 3 emissions related to sold products and services, as well as the usage of sold products (see fact box).
- Climate Action The manufacturer has processes to reduce carbon emissions that are aligned with the 1.5-degree target in the Paris Accord. This can be substantiated through a Science Based Target (SBT) or other external verification.
- Capacity Building The manufacturer has local initiatives to strengthen workers' right to influence (workers' voice) and/or actively works to increase factory management's knowledge of workers' rights.
- Capacity Building The manufacturer participates in local capacity-building initiatives, such as increasing the supply of responsibly sourced minerals.
- Circularity The manufacturer is committed to adopting circular business models and minimizing reliance on virgin raw materials.
Tips! During market dialogues, consider requesting manufacturers to provide examples of their practices in areas that are particularly important to you.
Requirements placed on products and services
Sustainability requirements on specific products should target features and use of the product features, such as energy consumption, battery capacity, availability of spare parts, chemical content, packaging. When it comes to requirements related to the manufacturing and social conditions in the supply chain, it is better to place these on the manufacturer. This is because manufacturing facilities produce vast quantities of products, and supply chains are dynamic, making it disproportionately challenging to trace individual units. The work is carried out on a more systematic and overarching level.
The most important is to ensure that the products you purchase can have a long lifespan. This involves measures beyond specific sustainability requirements, such as focusing on quality, as well as considering the entire lifecycle - how the products are used in your organization and what happens to them afterwards.
Here, you can read about what other organizations are doing to extend the lifespan of their IT products. The best way to place sustainability requirements on products is to request products that carry an ecolabel, see the information below. Also, consider the vendor’s/manufacturer's ability to provide you with climate data for the products and services you are procuring.
Transports make up a small part of the total impact of IT products, but the majority of the emissions from the transports take place between the factory and the Nordic countries. With a little planning and foresight, you can choose more sustainable modes of transport, such as trains, from the factory but also more efficient transports within the country.
Data Centers & Cloud Services
By including the following criteria in the procurement of data centers and cloud services, you address the most material aspects, which are energy supply, energy efficiency, and sustainable lifecycle management of hardware.
- The vendor works systematically with energy efficiency that includes both the data centers and the technical platforms.
- The vendor has the ability to recycle the heat energy generated by the IT equipment.
- A high percentage of the service is covered by an energy efficiency certification, such as the EU Code of Conduct for Datacenter Energy Efficiency.
- The Power Usage Effectiveness (PUE) value of the data centers does not exceed 1.2. Request the vendor to provide details about the PUE value over time.
- The data centers are powered by renewable energy. Ask the vendor to specify the percentage of renewable energy used and provide information on any changes over time.
- The vendor/manufacturer has a comprehensive lifecycle management process, which includes the take-back of equipment that is no longer in use, the option to provide reconditioned equipment, purchasing advice, and guidance for optimized usage.
Remember the hardware!
When procuring data center services, it's easy to forget about the hardware, despite its significant role in energy consumption and the overall environmental impact. The hardware is material, especially considering challenges in the production and its contribution to electronic waste. Therefore, it is important to include requirements for sustainable lifecycle management, covering purchasing advice, comprehensive management throughout the lifecycle, and optimized usage.
A few words on eco-labels
Eco-labels help you find products that are produced with extra consideration taken towards the environment and/or social conditions.
• Eco-labelled should meet specific environmental and/or social requirements which are often more rigorous than legal requirements.
• An independent party determines which requirements products should fulfill in order to get labelled. For Type 1 labels compliance is also verified through accredited third-party audits.
• The most common eco-labels are TCO Certified and Epeat. Both labels are extensive and include social and environmental requirements but differ slightly in methodology. For Epeat, the product must be Epeat-registered in the country where the product is sold for the label to be valid; however, the criteria can still be met. Check with your supplier!
The availability of eco-labelled products varies for different product categories. We therefore recommend that you research which type of label is suitable for your needs and priorities prior to procurement.
Dare to challenge!
A lot of what we do is based on habit and established ways of thinking, but in order to achieve real change it is important to dare to shift our focus and challenge:
The way you purchase IT
Sustainable IT is built on using existing resources as efficiently as possible. Therefore, dare to challenge and question the way you purchase IT. Instead of thinking product, think function. The benefit of IT does not come from owning the actual equipment but rather from using it. For example, leasing the equipment can yield significant sustainability benefits, not least through the take-back process in place, but also financial benefits from purchasing a complete process where you can optimize the usage, have complete control over the equipment and only pay for what you use.
Your way of thinking
The purchase price does not always reflect the actual cost of a product. To get a more accurate picture, it can be valuable to include parameters such as total cost and life-cycle cost in the procurement process. What will be the cost of a product purchased, used for a short period of time and then discarded compared to one that can be repaired and upgraded, is compatible with additional parts, and has a high residual value?
Your supplier
How can your supplier help you reach your goals, both in terms of budget and sustainability? What are the best solutions tailored to your needs? Challenge your suppliers to think outside the box!
Get more support!
You don't have to start from scratch. Here is some additional inspiration, knowledge and guidance.
★ The National Agency for Public Procurement has criteria for IT and telecom products.
★ TCO Certified's overview of the criteria included in their certification and that can be used both as inspiration and when it is not possible to request certified products.
★ RBA's transparency guide with material indicators to include.
★ Global Electronics Council has several Purchaser Guides for different sustainability areas.
★ Public procurers can find support at Adda (previously SKL Kommentus) and Kammarkollegiet (The Legal, Financial and Administrative Services Agency), and why not each other? An under-valued resource!
★EU Green Public Procurement criteria (GPP) for ICT equipment. Strong focus on circularity.
For more information, please contact
