APPENDIX FOUR
Memorandum submitted by Hewlett-Packard
(HP)
1. EXECUTIVE
SUMMARY
1.1 Hewlett-Packard (HP) is pleased to have
the opportunity to make a submission to this inquiry and welcomes
the Committee's Report as a timely look at the strategy behind
a sustainable procurement policy for the UK public sector.
1.2 HP believes that environmentally sustainable
development is not an option but an imperative. Environmental
responsibility is an integral part of our offering, environmental
considerations are built into our R&D process and our robust
stance on this issue is a key differentiator in the marketplace.
1.3 As a result, HP welcomes significant
customers like the public sector developing sustainable procurement
guidelines which provide a financial incentive to develop products
and practices with a lower environmental impact and provide market
recognition for innovators such as HP.
1.4 HP has led the IT industry's work with
governments and international bodies to develop workable environmental
standards which can be used as the basis of sustainable procurement
policies. It is important that the UK Government do not seek to
"reinvent the wheel" when developing their preferred
approach but instead seek to adopt best practice from these existing
schemes.
1.5 There are numerous environmental labelling
schemes in the global marketplace for IT products and for consumer
products in general, such as Energy Star or Blue Angel. However,
many of these schemes have different environmental criteria and
measurement methodologies. This means that, in order to obtain
accreditation from the different labels, the products of global
companies such as HP have to go through rigorous testing procedures
several times in order to meet the criteria for the differing
national and regional standards. HP therefore supports the general
harmonisation of the various labelling schemes for IT products,
particularly in relation to the criteria and the testing methodologies.
1.6 The Government should continue to consult
with industry when setting sustainable procurement criteria to
ensure that the agreed standards are realistic, effective and
workable.
For HP's key recommendations please see section
6.
2. INTRODUCTION
2.1 Hewlett-Packard (HP) is the world leader
in personal computers, IT storage systems, and imaging and printing
technology. HP believes that sustainable development is not an
option, but an imperative. Across the company's global operations,
HP works toward a sustainable future by developing programs that
reduce its environmental footprint, as well as those of its customers
and partners. HP's vision is to develop products and solutions,
and operate the company in such a way, that it is able to lead
global businesses toward a sustainable future.
2.2 Hewlett-Packard has been established
in the UK for over 40 years and the HP UK business is now the
largest division of HP outside of North America. HP has corporate
functions located in London, Bracknell, Reading, and Warrington.
The UK is also home to HP's largest R&D establishment outside
of the United States, HP Labs in Bristol, which employs over 120
full time researchers. In Scotland, a key part of the company's
European manufacturing operation is located in Erskine, Ayrshire.
All together, HP employs around 10,000 people across the UK.
2.3 HP believes that environmentally sustainable
development is not an option, but an imperative. In our operations
across the globe we work towards a sustainable future by developing
programmes that reduce our environmental footprint, as well as
those of our customers and partners. HP's vision is to develop
products and solutions, and operate the company in such a way,
that it is able to lead global businesses toward a sustainable
future.
2.4 HP has, for some time, been in discussions
with both the Department for Environment, Food and Rural Affairs
and the Environment Agency about potential criteria for sustainable
procurement policies. Both of these organisations have shown particular
interest in the IT ECO declaration programme which was set up
by IT manufacturers in response to increasing interest from public
bodies in the Nordic region about the environmental attributes
of products. HP was instrumental in the development of the resulting
programme which allows participating manufacturers to communicate
environmental information in a set format whilst self-verifying
the data (see section 4.1.2 for further information).
2.5 HP has also participated in the development
and implementation of sustainable procurement guidelines by many
of its major customers (including governments) across the globe.
In the United States HP have recently worked with a range of environmental
stakeholders including NGOs and the Environmental Protection Agency
on the development of the Electronic Products Environmental Assessment
Tool (EPEAT). The resulting programme will ultimately advise procurement
officials about the environmental attributes of personal computing
devices based on a "total cost of ownership" assessment
(see paragraph 3.5 for more details).
3. HP'S APPROACH
TO THE
ENVIRONMENT AND
SUSTAINABLE PROCUREMENT
3.1 HP sees environmental responsibility
as an integral part of our product offering and so we are willing
and able to differentiate ourselves in the market through our
environmental responsibility programmes. HP developed its Design
for Environment program over 10 years ago with the goal of reducing
the environmental impact of products and services. In addition
to meeting safety and regulatory requirements, our objective is
to design products that use fewer materials, are more energy efficient,
and are easier to recycle, while maximising overall value for
our customers. Our Design for Environment Programme involves work
with product designers, research and development teams and customers
to identify, prioritise, and recommend environmental design innovations.
3.2 Over a decade ago, HP was a pioneer
in developing a convenient and free method for customers to recycle
our laser printer supplies. Today, this recycling program has
expanded to include inkjet printer supplies, and is now available
in each region throughout the world. The programme has taken back
more than 80 million kilos of printer supplies over its 12 years
of operation, but our recycling strategy is expanding rapidly
so that by 2007 we aim to reach a total take back target of one
billion pounds (around 500 million kilos), which will include
over 300 million kilos of waste products as defined by the WEEE
Directive.
3.3 Environmental considerations are also
built into HP's R&D process, with Product Stewards appointed
for each new product to ensure compliance with regulations, maximise
energy efficiency, minimise material usage and maximise recyclability.
3.4 As a result of this approach, we welcome
significant customers like the UK public sector developing sustainable
procurement guidelines which provide an opportunity to gain market
recognition of our investment in products and practices with a
lower environmental impact.
3.5 While it is likely that products will
have to meet a range of pre-qualification criteria (including
environmental specifications), ultimately value for money principles
will be a priority for procurement officials. It is therefore
important that sustainable procurement guidelines are based on
"total cost of ownership" measures in terms of costs,
energy usage, reliability, recyclability at end of life etc rather
than simple "headline" measures. Procurement decision-makers
must be encouraged to prioritise long-term environmental and efficiency
criteria ahead of the short-term financial gain. The current printer
cartridge market illustrates this point. The low initial outlay
and apparent environmental benefit of selecting remanufactured
printer cartridges may be negated over the long-term when total
cost of ownership, including reliability (specifically the amount
of paper used during the life of the cartridge) and end of life
disposal, is considered.
4. THE GOVERNMENT'S
APPROACH TO
SUSTAINABLE PROCUREMENT
4.1 HP has been involved in discussions
with DEFRA regarding the Market Transformation Programme and more
specifically the "Quick Wins" programme for some time.
There are five key issues arising from these discussions that
we would highlight to the Committee:
4.1.1 Harmonisation
— There are numerous environmental
labelling schemes in the global marketplace for IT products and
for consumer products in general, such as Energy Star or Blue
Angel. However, many of these schemes have different environmental
criteria and measurement methodologies.
— This means that, in order to obtain
accreditation from the different labels, the products of global
companies such as HP have to go through rigorous testing procedures
several times in order to meet the criteria for the differing
national and regional standards. HP therefore supports the general
harmonisation of the various labelling schemes for IT products,
particularly in relation to the criteria and the testing methodologies.
— Harmonisation has two immediate advantages:
1. The development of a single harmonised set
of criteria that are applicable to the products, measurable and
comparable as well as being linked to international standards
and recognised test methods, reduces the need for redundant testing
and record management while increasing the efficiency of environmental
information dissemination.
2. The development of consistent international
standards, incorporating best practice from existing systems will
also reduce confusion for the purchasers who are interested in
the environmental attributes of IT products.
— A prime example of this is the harmonisation
of electrical safety codes over the last 15 years. Through the
collaborative work of governments, standards bodies, industry
and other stakeholders a global standard has emerged that is universally
recognised and means the same thing for all applicable products
around the world.
— An example of where the Government
could benefit from a harmonised approach is in relation to DEFRA's
proposed "Quick Win" targets for energy usage of IT
equipment. Although DEFRA's development process is not yet complete
(DEFRA are yet to consult with industry), at present there is
no agreed system for measuring energy usage during the operational
phase of PCs and laptops. Under the proposed system of self-declaration
each supplier would define their own measurement system making
it difficult for procurement officials to compare products accurately.
A harmonised standard would allow officials to compare "apples
with apples". While there is no generally agreed standard
in existence yet, Energy Star is currently working on a methodology
for measuring energy usage during the operational phases of PCs
and laptops.
4.1.2 Self-declaration
— In response to increased interest
in sustainable procurement in Nordic countries, an industrial
consortium developed a self-declaration system by combining elements
from numerous ecolabels along with frequently asked questions
from customers. The resulting "IT ECO declaration" system
is one of the most widely used product environmental information
tool for electronics in Europe.
— Where a relevant standard exists,
the IT ECO declaration programme includes a set of operating principles
to ensure that each manufacture measures in the same way and presents
results in the same format. This ensures that purchasers of IT
products can compare products on a like-for-like basis. The scheme
also includes a spot check system to guarantee that all manufacturers
accurately communicate environmental information.
— Self-declaration systems avoid the
time to market delays and expense associated with third party
testing. Manufacturers are held to the same verification requirements
used in many ecolabel schemes and must provide verification data
when requested by the customer. The system is self-policing and
IT manufacturers are required to correct their submissions or
leave the system when information has been found to be inaccurate.
4.1.3 Data Output
— The UK Government has proposed developing
a database to store environmental information about IT products.
If this were implemented it is recognised that HP would be requested
to supply environmental information about products on a regular
basis. To ensure efficiency and speed of delivery it is strongly
suggested that an automatic electronic system be designed. This
would offer greater efficiency, for both HP and the Government,
over a paper based system. The use of an automated electronic
system eliminates the need for manual handling of information
and the associated potential for inaccuracies and errors during
data transfers.
— The establishment of such systems
has already been attempted in other EU Member States where the
critical success factor has been the ability to update the database
with information about new products that enter the market at high
speed, such as personal computers for home use. If the Government
is to develop such a system, it is suggested that existing database,
such as that of EPA Energy Star compliant products, are not duplicated,
but incorporated into the new system.
4.1.4 Recognition of voluntary initiatives
— HP is involved in a number of voluntary
initiatives to encourage the dissemination of environmental information.
For example, HP is involved in a multi-organisation programme
to develop a green procurement tool. The US EPA Electronic Products
Environmental Assessment Tool Project (EPEAT) will be designed
to help purchasers buy IT products with their environmental attributes
in mind.
— HP is also involved in the Material
Declaration Guideline project, a multi-organisation project to
develop a material content communication standard for communicating
material content data about IT products.
— Both these initiatives are examples
of voluntary initiatives which the Government should consider
recognising during the development and operation of their sustainable
procurement programme.
4.1.5 Dialogue with manufacturers
— HP believes that dialogue with IT
manufacturers is essential to ensure that the Government's sustainable
procurement programme has realistic goals and expectations.
— Dialogue with manufacturers will
provide the Government with a clearer picture of what is happening
in the market place. For example, the Government (through the
Market Transformation Programme) is investigating the possibility
of setting environmental specifications for IT products three
or four years ahead of time. This is an attempt to provide IT
manufacturers with three or four years to develop products which
meet the future environmental specifications. In particular, Government
and industry must work in partnership to ensure that the environmental
specifications set are realistic and achievable in order to protect
competition, choice and value for money in public body tenders.
— HP believes that a formalised structure
should be developed which ensures accurate and timely industry
input into the Government's sustainable procurement programme
and will volunteer to help with this effort.
5. THE GOVERNMENT'S
APPROACH TO
SUSTAINABLE PROCUREMENT
5.1 In its press release relating to this
inquiry, the Committee set out three key sets of questions. While
HP cannot answer all of these questions, we would summarise our
response as follows:
5.2 There is a clear overall sustainable
procurement strategy within government with clear lines of responsibility.
However, implementation of the strategy is not consistent across
government departments. Local authorities have separate advice
and guidelines from bodies such as the Improvement and Development
Agency.
5.3 A more joined up approach across the
public sector would be helpful for suppliers to understand and
adhere to and would also have a greater impact on the market as
the full weight of the public sector's buying power could change
practices in the industry.
5.4 The EU's regulations on public procurement
leave considerable scope for environmental considerations to be
taken into account in purchasing decisions. However, the utilisation
of this scope varies from department to department. For example,
in our experience the Environment Agency makes considerable use
of the scope for balancing value for money considerations with
environmental considerations.
5.5 The Government's public sector efficiency
drive, as set out in the Gershon Review, can utilise some elements
of sustainable procurement policy. For example, government departments,
as part of their implementation of the efficiency measures should
look to the total cost of ownership over the lifetime of ICT equipment,
rather than simply the cheapest purchase price. This approach
means that more energy efficient products, which may have a more
expensive list price, can be seen to cost less as they use less
energy. This creates both an environmental win and an efficiency
win, as lower energy costs will offset a higher purchase price.
5.6 As stated above, a more centralised
approach to purchasing ICT products and services, as advocated
by the Gershon Review, can allow the public sector to make the
most of its purchasing power and provide the market with a clear
economic incentive to create more energy efficient and environmentally
friendly products.
6. RECOMMENDATIONS
6.1 The UK should take the best practice
from other countries and encourage a degree of harmonisation of
standards across Europe and beyond (particularly in relation to
criteria and testing methodologies) in order to make it easier
for producers to make and supply products which meet sustainable
procurement guidelines.
6.2 Industry-led self-declaration systems,
such as the IT ECO declaration, tend to be more workable than
externally imposed standards, which risk being arbitrary and unfairly
benefit one supplier over another. HP would therefore encourage
the Government to build upon existing systems of self-declaration
and continue to consult with industry to ensure that sustainable
procurement criteria are realistic, effective and workable.
6.3 For reasons of efficiency and speed,
HP encourages the UK Government to implement an automatic, electronic
system for the collection and storage of environmental information
about IT products, where appropriate incorporating existing database.
7 February 2005
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