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. HP submitted
evidence to the Committee's Sustainable Public Procurement Inquiry
(Sixth Report of Session 2004-05) and welcome the Committee's
continued focus on sustainable procurement policy for the UK public
sector.
1.2 Our response to the current Inquiry
is focused on sustainable procurement in relation to IT. Although
we recognise that sustainable public procurement extends far beyond
the IT sector, we believe that there are some valuable lessons
which can be learned from the experience of the IT industry in
this respect.
1.3 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 we believe
our robust stance on this issue is a key differentiator in the
marketplace.
1.4 As a result, HP welcomes significant
customers like the public sector developing sustainable procurement
guidelines which offer a financial incentive to develop products
and practices with a lower environmental impact and provide market
recognition for innovators such as HP.
1.5 HP has worked 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 does not seek to "reinvent the wheel"
when developing its preferred approach but instead seeks to adopt
best practice from existing schemes operating elsewhere.
1.6 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.
1.7 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 UK business is now the largest
division of HP outside of North America. HP has corporate functions
located in London, Bracknell, Reading and Warrington.
2.3 Innovation is the driver of HP's business
and the UK is central to the company's R&D effort. HP Labs
in Bristol is the company's largest R&D facility outside the
US, employing over 120 full-time, multi-national research staff
on a diverse range of projects. HP's focus on innovation is reflected
in our approach to environmental policy and regulation, including
our involvement in sustainable procurement.
2.4 In April 2005, HP was invited to participate
in the Sustainable Procurement Taskforce chaired by Sir Neville
Simms. However, HP's interest in sustainable procurement pre-dates
our involvement in the Taskforce. The company 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 has 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.
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 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 programme—Planet
Partners—has expanded to include inkjet printer supplies,
and is 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 1 billion pounds (around 500 million kilos), which
will include over 300 million kilos of waste products as defined
by the Waste Electrical and Electronic Equipment (WEEE) Directive
(see paragraph 3.3 for more details).
3.3 As the world leader in personal computers,
IT storage systems and imaging and printing technology, HP has
a very clear interest in the WEEE Directive and has led the IT
industry's implementation effort. Despite delays to the official
implementation of Directive in a number of member states (including
the UK) HP launched its one-stop recycling service for waste returned
under WEEE regulations across the EU earlier this year.
3.4 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.
3.5 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 which
lower environmental impact.
3.6 While it is likely that products will
have to meet a range of pre-qualification criteria (including
environmental specifications), we recognise that, 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, for some time, been involved
in discussions with DEFRA regarding the Market Transformation
Programme and, more specifically the government minimum procurement
specifications known as the "Quick Wins". At present
we are preparing a response to the MTP's consultation on the extension
of the Quick Wins candidate list, expected in 2006. We have some
reservations about the proposed expansion which we are working
to resolve with the MTP (see paragraph 4.1.1 for more details).
However, there are five key issues arising from our 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 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 is 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 global standards have emerged that are
universally recognized and mean 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,
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 for measuring
energy usage during the operational phases of PCs and laptops,
future methodologies may result from Energy Star or EuP initiatives
HP will raise this issue as part of its input into the MTP's current
consultation process.
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) has investigated 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. 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 responding to the Environmental Audit
Committee's previous Inquiry into Sustainable public procurement
HP made the following observations about the Government's approach
to sustainable procurement:
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 & 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 products with
lower overall environmental impacts.
6. RECOMMENDATIONS
6.1 In its press release relating to this
inquiry, the Committee set out five key questions. While HP cannot
answer all of these questions, we would summarise our response
as follows:
6.2 The UK should avoid "reinventing
the wheel" in relation to sustainable procurement guidelines.
Efforts should be made to take 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.
6.3 If the UK is to successfully create
a market for sustainable products, it must develop a system which
facilitates and rewards environmental innovation within the business
community. It is only by creating demand for products that meet
robust but realistic environmental standards that the market can
respond and be transformed in the long term.
6.4 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.
6.5 In the United States, the success of
the Electronic Products Environmental Assessment Tool (EPEAT)
is a best practice example of how procurement officials can purchase
IT products with their environmental attributes in mind. (See
paragraph 2.6 above)
6.6 HP strongly welcomed the establishment
by government of the business-led Sustainable Procurement Taskforce
earlier this year and was pleased to be invited to participate.
We continue to work with the Taskforce. However, it has a wide
remit and, as a result, has some very ambitious targets to reach
in a short period of time.
20 October 2005
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