Responsible procurement

This factsheet explores how responsible purchasing can positively

impact hotel operations

What is responsible procurement?

Every successful business depends on having a well-developed purchasing
process to source all necessary products and services at the best price
and quality while ensuring they are fit for purpose and have the required
availability.
Any business working to embed sustainable practices should make sure to
include sustainability criteria in their decision-making process. This involves
choosing products and services that have a reduced negative impact on
human health, the environment and society in comparison to alternative
items that serve the same purpose.

Why should hotels address this issue?

Purchasing decisions can have significant environmental and social
impacts, particularly for the tourism and hospitality sectors, which often find
themselves under pressure to import goods, including food, from distant
countries to cater for guests’ demands.
Hotels may be having an indirect negative impact via the goods and services
they are using (for example procuring water-intensive products from a water-
scare region, or products with human rights issues in the supply chain).
Hospitality procurement managers can also have an influence on suppliers’
and consumers’ behaviour, helping to drive further progress, whether buying
food for their restaurants, furniture for guestrooms, amenities for the spa or
outsourcing laundry services.

Case study
Deutsche Hospitality expects its business partners to meet minimum
sustainability requirements. Their procurement policy has clear
CSR-criteria for all products and services they procure. They are also
working towards approving a Business Partner Code of Conduct and a
human rights supply-chain management system which they will ensure
core suppliers comply by carrying out inspections from 2022. In 2019
they introduced cage-free eggs in Europe and plan to roll this out globally
by 2024. In 2021 they started to use sustainably certified and Fairtrade
coffee in their European leased and managed hotels. They have also
worked to reduce their carbon emissions by purchasing renewable
electricity for their German and Austrian leased and managed properties.

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Benefits of responsible procurement
Cost savings
Products that have higher initial costs can actually be cheaper when their whole
life costs are assessed. Such products may be more energy or water efficient,
saving money on utility bills. Alternatively they could be more durable and
therefore not need replacing as often while also reducing waste.

Reputation management
Selecting sustainable goods and services from responsible suppliers can
enhance the company reputation, increase customer loyalty, and attract new
customers.
Association with a supplier that has a poor environmental, social, and ethical
record can pose a significant reputational risk to a business. For example, after
Nestlé uncovered child labour in its cocoa supply chain in the early 2000s, the
company suffered damaging pressure from the public. In response, it introduced
its Cocoa Plan, which addresses child labour issues in the supply chain as well as
the underlying issues within cocoa farming that resulted in child labour.

Improves access to capital

Institutional investors and lenders are increasingly looking at a company’s
environmental, social and governance (ESG) performance. Hotels that practise
responsible procurement are more likely to benefit from easier access to capital.

Access to tax breaks and credits

Businesses can take advantage of government financial incentives to invest in
energy-saving equipment. Many municipalities in Japan offer subsidies, including
low-interest finance, for purchases of energy-efficient appliances, while the
US state of Pennsylvania offers small businesses grants for equipment that
improves a company’s energy efficiency. In the UK, the Carbon Trust’s Enhance
Capital Allowances scheme allows businesses to claim 100% first-year capital
allowances on investments of qualifying energy-efficient equipment, from boilers
to lighting and refrigeration systems.

Promotes innovation
Hotels can encourage suppliers to invest in developing sustainable products,
technologies and processes. For example, EcoLab worked closely with its client
hotels to create a low temperature laundry system that can save up to 40%
of water and up to 50% of energy consumption as well as reduce the need to
replace laundry by around 20%.

Increases employee engagement

By showing a genuine commitment to environmental and social issues,
responsible procurement can help attract and retain employees while increasing
their motivation and productivity.
A 2016 edition of Harvard Business Review, The Comprehensive Business Case
for Sustainability, references that “morale was 55% better in companies with
strong sustainability programs, compared to those with poor ones, and employee
loyalty was 38% better. Better morale and motivation translate into reduced
absenteeism and improved productivity. Firms that adopted environmental
standards have seen a 16% increase in productivity over firms that did not adopt
sustainability practices.”
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How to get started
Embedding responsible purchasing principles within a hotel operation will take
leadership, time and a willingness to try new products.

• Collaborate
Let your suppliers know that you want to make changes to your purchasing
decisions and so they can join and support you in this effort.

• Start big
Hotels use thousands of products and services that all need replenishing,
refurbishing, or replacing over time. Start with the areas of high spend to ensure
you tackle big-impact sections first. There might be quick and easy wins on the
way but don’t get distracted by smaller-impact areas.

• Consider the life-cycle

One of the principles of responsible procurement is life-cycle costing. It is a
technique that considers the full lifespan of a product or service, from raw
material extraction through to manufacture, distribution, use, repair and
maintenance, and disposal or recycling. It considers the following:
• whether a purchase/service is necessary at all
• what products are made of
• under what conditions they have been made
• how far they have travelled
• their packaging components
• how they will be used
• how they will be disposed of or is there a way to
reuse, recycle, upcycle the item to start embedding
more circularity within your operations
This system helps hotels assess the full impact of a product or service, while also
assessing whether paying out an initial higher cost for a product or service can be
offset by lower ongoing efficiency savings over its lifespan.

Case studies
IHG
In 2019, IHG introduced their Green Supplier scorecard to assess suppliers against
issues such as raw materials, manufacturing methods, transportation and the life
cycle of the product. In 2020, 23% of contracts were awarded to green suppliers
through their tendering process.

Marriott International
In 2019, Marriott International made its Responsible Seafood and Animal Welfare
Position Statements public to communicate its continued commitment to improving
seafood procurement practices and raising the standard of animal welfare across
its operations and supply chain. As of year-end 2019, 99% of hotels globally comply
with its responsible seafood program requirement to ban the purchasing of specific
species including bluefin tuna, Chilean sea bass, marine mammals, orange roughy,
sea turtles, and sharks (inclusive of shark fin).

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Starting areas to consider
Quality Product circularity
Opt for the highest quality you can afford, whether • Avoid disposable products: If you can, opt for
for furniture, uniforms, or appliances; have them reusable products as, even if single-use items
repaired or serviced when necessary – it’s generally are recycled, some of the energy and resources
more cost effective than replacement and reduces that are used to produce them will be wasted.
the use of materials and waste.
• Recycled or recyclable: Buy products made
from recycled or reclaimed materials (100%
Energy efficiency and renewable energy
recycled content carpet) and/or those that can
Choose low-energy or energy-efficient lighting, be recycled or reused at the end of their working
heating, and air-conditioning, which may cost more lives.
initially but will produce savings in the long term
• Upcycling: Look for products that have been
because of lower operating costs.
made from other waste items (e.g. outdoor
You can also reduce the impacts by sourcing furniture made from old plastic bottles or pens
renewable energy from suppliers. Increasingly, made from waste coffee cups).
certification schemes will look for 100% renewable
• Return products: Work with your suppliers for
energy usage within a business.
opportunities where you can return products
Hazardous materials at the end of their life to be upcycled into an
alternative product, recycled or reused.
Avoid products containing toxic substances. Opt for
non-harmful alternatives, including non-toxic, water-
based, hypoallergenic and biodegradable cleaning
products, zero VOC paints and natural amenities.

Do your due diligence

Incorporate human rights considerations in your
purchasing processes, especially when thinking
about labour sourcing.

Sustainably certified products

Many certifications exist that help identify products
which are more sustainable. Certain certifications
are more relevant to particular products and they
tend to focus on either environmental (e.g. impact
on wildlife and energy efficiency) or social issues
(e.g. fair prices for producers and human rights). A
few examples are:
• Food and drink: Fairtrade®, Organic, MSC™ and
ASC™, Rainforest Alliance™
• Timber and paper: FSC®
• Cotton: Organic, Better Cotton Standard
System™

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Communications
Letting your customers know what you are doing to purchase responsibly is almost as
important as taking action.
Your communications should include what you are doing, what your achievements have
been and also how you are addressing some of the bigger, longer-term issues. If you are
purchasing certified products, check if you can communicate this to your guests e.g. on
your menu (the certification website may have information about this).
A good start is to map your efforts against the relevant United Nations Sustainable
Development Goals. There may not always be a specific goal for the exact issue you are
addressing but the goals most related to responsible procurement are SDG 1, 2, 5, 8, 10,
11, 12, 13, 14 and 15.

Tools and resources

• UN Environment has provided a set of case studies to show how corporate buyers
have effectively embedded sustainability in their procurement processes, helping them
to improve resource efficiency and reduce greenhouse gas (GHG) emissions.
• Our Environmental Management for Hotels manual has a section for guidance on
purchasing.
• Our human rights trainings and resources help you avoid forced labour in your supply
chains.
• Business in the Community (BITC) has also created an in-depth guide to responsible
sourcing.

About Sustainable Hospitality Alliance

Sustainable Hospitality Alliance brings together engaged hospitality companies and uses the
collective power of the industry to address key challenges affecting our planet and its people.

info@sustainablehospitalityalliance.org
www.sustainablehospitalityalliance.org
Sustainable Hospitality Alliance is a registered charity in England
and Wales (1188731). Company limited by guarantee (12373950).