Your decision to buy a particular product or service may seem trivial in the scheme of things. However, as a purchaser – whether an individual or organisation – you have more power than you think. In fact, you have a superpower that can be used for the good of the world! To see how to use it, read on…
Through your buying decisions, you have the power to influence what is sold, where it comes from, how it’s made, what it costs, and who makes, sells, or supports it. How? Well, in a free market economy, the prices, types, features and availability of goods and services depend on the principle of supply and demand. Sellers have the incentive to supply what buyers demand. Therein lies the source of your purchasing superpower!
Using your purchasing power responsibly
As Spider-Man was advised by his uncle, “With great power comes great responsibility”. To exercise our purchasing superpower wisely, we need to practise responsible purchasing (which companies tend to call sustainable procurement).
It’s about making thoughtful buying decisions and recognising the positive or negative enviromental and social impacts those decisions can have.
With responsible purchasing, we aim to assess the sustainability credentials of a product, service, or company before deciding what to buy. When assessing how sustainable it is, we consider things like environmental impact, human rights, fair operating practices and social or community impact.
Our buying decisions can be informed by The Natural Step, which outlines four system conditions for a sustainable future. These are about reducing what we take from the earth, reducing the environmental impact of what we make, maintaining our natural environment, and using and sharing resources fairly. Here’s a visual summary of the four conditions:
In other words, if we use our purchasing superpower responsibly – by thinking carefully about what we buy for our home or business, researching information and acting on it – we can boost demand for environmentally and socially sustainable products and services in the marketplace. As a result, sellers will realise the need to adjust their products, services, or operations to meet this demand.
How businesses respond to demand from climate-conscious customers
The extent to which a manufacturer or seller responds to buyers’ demands for green products and services will vary according to their business values and priorities. Forward-thinking organisations recognise the power of sustainability to provide a competitive advantage. They can see that sustainable practices let them meet increasing demand from environmentally aware customers and employees while potentially lowering costs and increasing operational efficiency.
For example, reducing the energy and materials used to produce a product is likely to lower its cost as well as its carbon footprint. In many cases, innovative materials, climate-smart systems/processes and advanced eco-efficient technologies allow companies to create demand for completely new products and services.
Sometimes, a seller’s move to more sustainable practices is accelerated by proposed industry or governmental regulations. As a case in point, some businesses have made it a priority to stop providing single-use plastics well before the Australian government bans to phase them out come into force. Another example is Green Street’s Bag Habits campaign, which preceded the Queensland government plastic bag ban by a full six years.
The more sellers offer sustainable products and services, the more customers will demand them. And so, the cycle continues.
Purchasing power along the supply chain
As part of the economic cycle, sellers are usually buyers too. A company that supplies products or services needs to buy materials, equipment, office supplies, transport, advertising and other goods and services. In turn, the suppliers of those items are also buyers, purchasing raw materials, components or other goods and services.
Whether as a buyer, seller, or both, we are all part of a supply chain, and our purchasing decisions have an impact along that chain. By looking up and down that supply chain, businesses are starting to identify where their purchasing decisions can result in more sustainable outcomes. They are asking suppliers about sustainability practices and making decisions based on the answers.
In many cases, a potential supplier cannot be considered for a tender or procurement contract without demonstrating compliance with sustainability standards.
This need for supply chain accountability is behind many companies’ decisions to develop a sustainable procurement policy and embed this into decision-making over the lifecycle of their operations. A responsible/sustainable purchasing policy considers environmental, social and governance (ESG) criteria as well as economic factors related to purchasing decisions. It aims to create positive impact rather as well as reducing negative impact. If you run a business, see this recent report on Driving supply chain impact through sustainability action.
Practical tips for responsible purchasing
Before making a purchase for yourself, your home, or your business, decide if you need to buy something at all. Maybe you could repair or reuse an existing item, borrow/hire one, manage without a new service or do things in another way. If the answer is “Yes, we definitely need it”, the next step is to specify the requirements clearly. Then you can use this specification to research potential purchase options.
Once you have a shortlist of potential purchases that meet the stated need, ask yourself:
- Why do we need it? How well does it fulfil the stated purpose? How will it make our life, work, or business better? Which option provides the best value?
- Who makes/supplies it? What’s their reputation and human rights record like? Do they have a sustainability policy? Any eco-labels or accreditations?
- Where does it come from? How far has it travelled? Where do its raw materials come from? Could we get it locally?
- What’s it made of, and how? Does it use renewable or recycled materials? Will it break down in nature? How much energy/water was used to produce it?
- How is it sold? Is it marketed ethically? How much packaging does it have? Does it help the community? What support is available?
- How is it used? How much energy/water does it use? How easy is it to use or maintain? How long will it last? What happens after we’ve finished with it?
Researching sustainability credentials
Some of the above questions you can answer quite simply; others may require more effort to find out. To find answers, start by looking at company websites, online reviews, product labels and other readily accessible sources. You can also try asking the supplier or manufacturer to provide information, especially if you are procuring on behalf of a business.
When researching sustainability credentials, beware of misleading sustainability claims (‘greenwashing’). A label or statement saying something is green doesn’t make it so. Look for hard evidence, such as accredited eco certifications, environmental management data, sustainability policies and verified customer or employee reviews. For example, to see how a company treats its staff, try looking at company reviews on the Seek job site. Or to make sense of environmental claims and symbols, see the index of Ecolabels in Australia.
If researching larger companies, search their website for a sustainability report (it may be called an ‘ESG report’, which covers Environmental, Social & Governance). For any company website, try searching for terms such as ‘Corporate Responsibility’, ‘Environment’, ‘Responsible business’ or simply ‘Sustainability’.
Don’t be afraid to challenge any claims you find, by asking the company to back them up. Back in 2004, two New Zealand schoolgirls did just that. They found Ribena was making false claims about Vitamin C content, and the parent company GSK was later fined for making misleading health claims.
The moral is: the more buyers look for genuine sustainability information, the more sellers will be motivated to provide it (and act on it).
Balancing sustainability with cost and value for money
Depending on the situation and the product or service you’re thinking of buying, not all the questions listed above will be equally important. To balance this, you can assign a ‘weighting’ to score different aspects of the purchase decision. For example, purchase price is nearly always an essential factor, as is the effectiveness of the solution. There’s no point choosing the greenest possible product if you can’t afford it or it doesn’t do the job! So when comparing options, you might choose to weigh cost and effectiveness more heavily than other sustainability factors. Similarly, ongoing cost factors such as energy/water use and servicing can be balanced against product quality, longevity and potential for reuse, all of which have the potential to reduce costs long term.
To help business procurement managers compare purchase options, Green Street’s Sustainable Procurement Tool includes a simple spreadsheet you can adapt to adjust weightings and score potential purchases. There’s also a checklist template to help you research options and an online decision support tool.
If you’re making buying decisions as an individual rather than a business, the same basic principles apply. The practical tips and questions above can guide you towards buying green products and services, as well as our Green Tips and The Natural Step conditions mentioned earlier in this post.
Responsible purchasing is your choice
Whether as climate-conscious consumers, small business owners, administrators, or procurement managers, we can all practice responsible purchasing.
By proactively choosing where our money is spent, our money talks. It speaks volumes about our priorities, values and needs. Our spending decisions reverberate along the supply chain to spread that message.
In the end, these are just words. To exercise your purchasing superpower responsibly, use the power of words to ask more questions. Ultimately, the standard purchasing questions “How much does it cost?” and “Which option is the best value?” can be answered not just in economic terms, but also in relation to environmental cost and social value.
Related Green Street resources
- Sustainable Procurement Tool & Guide (Simple online tool, templates and guide)
- Business Case for Sustainability (Checklists and guidance for businesses)
- Sustainability Policy (Writing guidance, and examples of policies)
- The Natural Step (Universally agreed system conditions for sustainability decisions)
- ACCC guide aims to reduce misleading sustainability claims (greenwashing) (Guidance for businesses)
- Buying energy-efficient appliances (Green tips)
Image of Spider-Man (Madame Tussauds London) by Cristian Bortes / bortescristian, CC BY 2.0, via Wikimedia Commons
