This year’s Summit in Seattle provided a variety of opportunities for spirited dialogue and collective brainstorming for future SPLC initiatives. We kicked off our next big program during the Rating System v1.0 Workshop.
The purpose of a Rating System is to create a flexible system that evaluates the performance of an organization’s sustainable purchasing program and encourages its continued improvement. It is intended to allow users to:
- evaluate the effectiveness of an organization’s program;
- self-assess an organization’s sustainable purchasing program and performance outcomes, in house and over time;
- identify opportunities to improve the program efficiency and effectiveness, as well as overall performance outcomes;
- benchmark to compare performance against common metrics, previous scores, and industry peers;
- validate organizational purchasing leadership, offering third-party certification of program assessments.
The SPLC’s Rating System will achieve its functions through the following strategies:
- identifying a set of yardsticks (metrics) to allow for to quantitatively measure actions taken or performance achieved (or proxies for performance) in a particular area.
- identifying baseline criteria that purchasing organizations must meet within their sustainable purchasing program; and
- allocating points to specific processes and strategies that designate levels of achievement relative to purchasing impacts.
For many purchasing categories, identifying a set of yardsticks is well underway or near complete based on the content that’s been developed for Guidance v1.0. Other sections need some additional work in this area. Determining baseline and leadership criteria will require thoughtful and often tumultuous discussions among our Technical Advisory Groups and broader membership, as these determinations require agreement on community norms and goals.
A rating system is a big undertaking. But, it’s also made up of many smaller parts, as described above. These parts can be considered in various contexts, and we expect to make these smaller parts available for testing, feedback and then continue to refine them as the broader system comes together. The Council and its community are in the business of moving the market toward a more sustainable future, and should not expect that we get it right the first time. As the community continues to grow and the market begins to shift, our programs will need to play a dual role of being both responsive to current needs but also guiding organizations along a common trajectory toward more sustainable outcomes.
Several themes became evident throughout the Rating System v1.0 Workshop breakouts, and are reflected upon below.
Define a minimum scope of purchasing to have a relevant impact.
Sentiment was shared about the importance of scoping requirements (akin to Minimum Program Requirements in LEED) to ensure that organizational programs can be evaluated and compared against one another. Drawing appropriate system boundaries – such as a minimum amount of spending or a minimum subunit of operation – will be important to build consistency in precisely what is being evaluated, and what an eventual leadership designation actually means.
Require progress on all aspects of sustainability.
Common across all of the breakout groups, participants spoke to the importance of addressing the holistic nature of sustainability within the Rating System. While there’s lots of discussion to be had about the relative improvement in environmental, social, and economic impacts of spending to earn leadership designation, the signal is clear that leaders must consistently consider, address, and approve upon all three.
Determine entry level and leadership criteria.
A very strong sentiment was shared not only during the rating system workshop, but also throughout the conference about the importance of determining (and differentiating) entry level criteria and tools to assist organizations in getting started on a trajectory and begin making progress toward their sustainability goals, as well as achievements that more mature and established Sustainable Purchasing Programs may be able to accomplish. Both are important, but ensuring the existence of entry level tools (note, this is not at all synonymous with creating a low bar for leadership) will allow more organizations to engage in the process and reap the benefits of improved environmental, social, and economic impacts of their purchasing. Our Rating System is intended to make it easier for organizations to understand where they are starting, (relative to others and perhaps where they expected to be) and help them improve along a common trajectory as their peers, even if at different paces.
Make hard decisions on what to do or buy.
Within the Purchaser Role breakout, there was strong sentiment about the value the Council can bring to organizations interested in demonstrating leadership in sustainable purchasing by being very clear about the types of activities (e.g., spend analysis) and the specific attributes of products and services (e.g., holding particular standards, labels, etc.) leaders should pursue.
Promote processes that enable improved performance.
As was presented by Chris Pyke, PhD during the Rating System Keynote, process is critical to understanding performance in the next time period (i.e., don’t underestimate the power of luck when not having planned, but having obtained, positive sustainability performance outcomes at a particular time of measurement). The Council’s Guidance v1.0 lays out a strategic process that includes organizational commitments for the program and resources, and processes for prioritization and improvement in order to improve the environmental, social, and economic impacts of an organization’s purchasing. The Rating System will rely upon the foundational process outlined in the Guidance and reward organizations for successfully implementing various pieces of the process, in addition to rewarding improved and high performance within various purchasing categories.
Importance of transparency and public reporting
Many participants noted that a fundamental aspect of the Council’s Rating System must be internal and external transparency and public reporting. Transparency has always been a hallmark of the Council’s work, and is included as one of the Principles for Leadership in Sustainable Purchasing. Transparency is a fundamental principle to build momentum for and create healthy market competition to improve relevant environmental, social, and economic impacts, internally within organizations and externally along the supply chain. Transparency is also a building block for collaboration; where some organizations are able to identify and implement best practices in certain impact areas, others can quickly adopt these practices as appropriate. Transparency is also a key catalyst for innovation; market competitors can use this valuable information to improve the environmental, social and economic outcomes of their supply chains and demonstrate leadership in the development and delivery of their products and services.
Purchasers can exemplify transparency through a variety of actions, including the following:
- Measuring and publicly reporting internal targets and timelines for and progress toward improving relevant impacts of purchasing, using best available methods and reporting frameworks.
- Preferring suppliers that publicly report targets and timelines for and progress toward improving their supply chain impacts, using best available methods and reporting frameworks.
- Sharing lessons, challenges, and benefits of adopting and implementing a Sustainable Purchasing Program.
Design the system to encourage continuous improvement.
Most participants showed strong support for a Rating System program that relies upon a continuous improvement model for users. This means that an organization will not receive a “once and done” certification. Rather, leadership designation will be given for a certain period of time and its reaffirmation will be contingent upon further improvements to the Sustainable Purchasing Program and the associated environmental, social, and economic performance outcomes of the organization’s purchasing.
Engage with suppliers to accelerate the availability of more sustainable products and services.
The Suppliers of Goods and Services breakout discussed the importance of the Council engaging suppliers throughout and at critical points within the Rating System development process to enable them to market, differentiate, prioritize resource allocation, focus product development on that which will be in service to the Rating System, and therefore their customer’s needs. Additionally, suppliers noted a preference for clear RFP/Q language from the Council to help bridge the current gap between what purchasers may want and what is ultimately asked for within specifications.
Are you interested in helping the Council build Rating System v1.0?
The next step for Rating System development is offering an opportunity for those interested to become engaged in the process.
A new application window to join one of eight Technical Advisory Groups is now open.
New appointees will be assessed and approved by the Executive Committee of the Board of Directors once the Expression of Interest Period closes, currently expected for later this summer.
We have had great success in building Guidance v1.0 with an initial set of engaged and invaluable volunteers. This Guidance has already proven beneficial to our community of practice. Make no mistake, the forthcoming rating system development process will be a complicated process that involves many, many stakeholders at the table. I personally look forward to digging into complex issues with a group of smart, dedicated peers.