Circular procurement: companies leading the way in the private sector
Initially conceived for the public administration, circular procurement has now been adopted by several large companies in the private sector. A firm’s environmental footprint does not only depend on its own activities, but also on the others they originate from. That’s why to achieve a real circular transition, companies have to involve their suppliers and not limit this systemic change only to their direct area of operations.
According to the definition given by European Commission – which published the Public Procurement for a Circular Economy brochure in 2017 – circular procurement consists of the purchase of works, goods or services that seek to contribute to the closed energy and material loops within supply chains, whilst minimising, and in the best case avoiding, negative environmental impacts and waste creation across the whole life cycle.
Rethinking supply chain processes through a circular approach means being able to reduce externalities, costs and carbon footprints, and at the same time strengthen its value chain. Although circular procurement is not a very widespread concept in the private sector, some companies are already applying it.
A survey conducted by the World Business Council for Sustainable Development found that 74% of interviewees indicated that their companies use their own framework for measuring circularity, but just 22% and 20% of the circular metrics analysed cover the raw materials and end-of-life phases of the life cycle respectively.
Italian energy company ENEL became familiar with the term as early as 2018 thanks to the Circular Economy Initiative for Suppliers Engagement project, an initiative created to promote supplier engagement based on the Environmental Product Declaration (EPD), which defines environmental information on the life cycle of a product.
The aim of the project, which involves around 200 suppliers worldwide in 12 trade categories, is to objectively quantify, certify and communicate the impact generated by supplies over their entire life cycle (water consumption, CO2 emissions, impact on soil and so on), including the flow of materials coming in and going out of the business. Generally, the sustainability of ENEL’s supply chain is monitored by a supplier qualification system that assesses companies entering the procurement process.
How Mapei assesses its suppliers’ circularity
Although it has not launched its own branded circular procurement initiative, Mapei – a world leader in chemical products used in construction – designs its products to be durable and with a low environmental impact. Using recycled material, renewable energy sources in manufacturing processes and recovering waste are all part of this Italian company’s circular approach.
“Over the past year and a half, we have worked closely with our suppliers”, Mapei’s Corporate Environmental Sustainability leader Mikaela Decio told Ecomondo. “We have always had a qualification procedure to assess them, but now we have added sustainable and circular criteria to our questionnaires. To find out if the material we are buying is really recycled, we request certifications from independent bodies such as LCA (Life Cycle Assessment) or EPD. We are interested in this because we can enrich our database with more specific information about the material we want to use”.
Another issue Mapei includes among its criteria is regionality. “We have three facilities in Italy. What’s important to us is that we travel as few kilometres as possible”, Decio says.
In addition, the company’s research team is focusing on packaging solutions when selling high-quality cement additives. “We are working on using recycled plastic in our jars and how to handle the end-of-life of multi-layer packaging, creating something out of paper with a small polyethylene film inside”, Decio explains. “Paper mill technologies can discard what is not paper and this allows us to classify our packaging as up to 90% recyclable. This way, we encourage our stakeholders not to burn the packaging and to recycle it instead”.
Mapei is also developing an array of circular synergies. For instance, it will use polyethylene and polypropylene from Italian multi-utility Iren waste collection to obtain more sustainable and durable road asphalts.
Sky focuses on reducing plastic waste
Circular economy principles have been embedded in Sky's procurement strategy, which consists of a series of policies aimed at minimising the environmental impact of the supply chain. One of the most interesting is its single-use plastic policy, adopted in 2017: as of today, all Sky products and their components such as remote controls, batteries and plugs are free of disposable plastic packaging. As part of this effort, the company also removed single-use plastic bottles, straws, sachets, cups and cutlery from its own offices, resulting in a reduction in the use of 500,000 plastic bottles per year in Italy and a total of almost 2.5 million disposable plastic cups.
While reduction and reuse are the keywords in this policy, recycling is recommended only for materials that have high recycling rates such as glass and tin; furthermore, bio-plastics are not currently considered a suitable alternative to single-use petroleum-based plastics.
Sky also requires that any paper, card or wood purchased is made from recycled paper, or reclaimed timber in the case of solid wood. The purchased wood must be certified by recognised forest certification schemes such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC).
Apple’s assessments for minerals
Other companies have been recognised for their work with suppliers to reduce emissions and lower environmental risks in the supply chain. Since electronics customers are paying increasing attention to the material and mineral sources and asking for rigorous sourcing standards, Apple worked with Oeko-Institut e.V. to develop Material Impact Profiles (MIPs), which quantify not only the generalised supply impacts of a mined material, but also the environmental and social impacts. Using publicly available data, this tool evaluates impacts in the value chains of 45 elements and raw materials commonly used in consumer electronics.
To ensure that recycled and renewable materials meet Apple’s requirements, the company asks suppliers for third-party certifications. Procedures for virgin-mined materials and the end-of-life management of devices follow the same patchwork.
An article by Emanuele Bompan