Asking questions is the first step to circular procurement

News item -

“Every time you spend money, you’re casting a vote for the kind of world you want,” US activist Anna Lapp√© once said. As a logical consequence of this idea, procurement is a key part of our circularity ambitions and climate goals. It is only natural, then, that it was a prominent topic during the Week of the Circular Economy, which was hosted in Circl from 3 to 7 February.

Of all the energy that we consume around the world, 45% is used in manufacturing. This means that circular procurement, with its emphasis on the useful lives of products and their reusability, offers a tremendous potential for impacting not only what we consume in terms of raw materials and energy, but also climate change. During the Week of the Circular Economy, procurement officers from a number of large companies discussed their circularity ambitions and the dilemmas that they face on a daily basis as they seek to balance sustainable choices and cost control. Representing ABN AMRO was Marjolein Goense, the bank’s Head of Procurement & Facility Management.

Being such a large enterprise, ABN AMRO procures numerous products and services. This includes not only everything from office appliances to coffee and from office space to computers and software, but also a wide range of advisory services, for example secondment, marketing and training. The bank purchases more services than almost any other entity in the Netherlands.

Impact on the supply chain

ABN AMRO’s procurement decisions are not based on cost alone: circularity is another key factor in the bank’s choice of vendors. ABN AMRO uses responsible procurement as a way to help society. The bank will not use products or services that are harmful to people or the planet, and it also asks its vendors to act responsibly. This yields improvements along two routes: the bank’s own operations are more sustainable, and the choice of procurement partners amplifies its impact on the supply chain.

“We look not only at the price, but also at the best value for money,” Marjolein explains. “When we select our vendors, we consider a whole range of factors that we believe are important. Every category presents opportunities to ask the right questions. Obviously, circularity and the climate are very important factors, but human rights are also an issue that we consider. When we procure goods and services, we can make a difference by asking questions. This triggers real action in the market.”

Asking questions

What kinds of questions you can ask vendors varies. “In some categories they’re quite obvious. Staff uniforms are made from raw materials, so you can ask about reuse or sustainable production methods. But banks also procure services, and that’s where it becomes more complicated. Should you ask your consultants or seconded professionals about their business processes? In those cases, for example, mobility and diversity policies are interesting.”

More and more, banks are becoming IT companies. What questions can you ask a major IT vendor? “We’ll ask about the emissions from their data centres, for example, and how sustainable the construction of those centres is,” Marjolein explains. “Say a company has outsourced its development to another country, then we’ll ask about the working conditions in that country. Our inquiries are very thorough. What are the working hours? Are workers allowed to join a union? Can they take sick leave? And so on.”

Masterpiece

ABN AMRO leads by example. It took a gamble on circular construction and all its possibilities when it built Circl, the bank’s circular pavilion. “Circl was real cutting edge,” Marjolein comments. “The lift in Circl is a true masterpiece of circular construction. The lift is still owned by the manufacturer, as an example of a product-as-a-service. So how does that work in the land registry? We sat down with the manufacturer and sorted out all the legalities. If you take a look in the land registry, you’ll see a small empty square in the middle of Circl where the lift is located.”

Last summer ABN AMRO launched its new office concept GREENE in Eindhoven. Since then, another GREENE office has been added in Zeist. GREENE offices only contain materials that were previously used in other branch offices. Wherever the bank needs to buy new materials, it always chooses the most sustainable option.

Marjolein adds, “Besides GREENE, we’re always on the lookout for circular solutions for our other locations too. Our procurement people know what possibilities are available in the market. They talk to our clients from the business, they look at what areas offer the greatest impact, and they proactively suggest ideas.”

Recycling carpets

The idea of circular procurement is illustrated by the carpets in ABN AMRO’s offices. When the old carpets are replaced, the manufacturer reuses them. The carpet yarn is even turned into new yarn and then reused in the production process. In 2019 alone, 87,228 kilograms of carpets and carpet tiles were recycled.

Marjolein continues, “To me, circular procurement also means that we should use all 200+ of our offices and all our real estate and workspaces to experiment with circular innovation. Then we can share the innovations that we and our partners develop there with the rest of the market.”¬†

Refuse

The cost of circular solutions is still an issue in procurement. “I’ve yet to see a circular option that’s cheaper than the ‘normal’ product,” Marjolein explains. “But that also means that you have to be more responsible with what you already have. Nowadays we’re much more careful about reusing desks and other office furniture, and we’re becoming more and more critical of what we really need. Staying on budget forces you to make choices, which means that we sometimes have to end things without a clear function. ‘Refuse’ is also a key principle of circularity.”

Share

Join the discussion

ABN AMRO would like to know your opinion, so below this article you can react to this article via Disqus. By doing so, you agree to the conditions for reacting to articles on our website.

Related articles

More about Circular Economy