By Celsias Team
Posted on July 26, 2010. Listed in:
New Zealanders with the greatest buying power are making better buying decisions, according to results in the latest the 2010 Fairfax Media-Shape NZ survey.
The annual sustainable business practice survey shows 44 percent of those with personal authority to spend more than $100,000 on behalf of their organisations now buy solely or mostly on a whole-of-life cost basis, compared with 36 percent last year.
Whole-of-life buying means the true cost of using goods and services is considered, including environmental and social impacts.
"We are fast reaching a tipping point where cheaper day-one price deals become a poor way to do business," says New Zealand Business Council for Sustainable Development chief executive Peter Neilson.
Neilson says businesses and governments that have introduced sustainable procurement report between 8 percent and 30 percent efficiency improvements.
Some 21 percent of decision makers say they have social and environmental criteria in their supplier terms and conditions, and another 8 percent plan to do so.
About 16 percent say they have removed suppliers in the past 12 months because of environmental, social or ethical behaviours.
Neilson advocates the principles of value-based, as opposed to price-based, tendering be adopted in New Zealand.
"This could save the central Government alone more than $1.6 billion a year," he says.
Buying on whole-life cost basis is affecting spending by 36 percent of communication services, 35 percent of property or business services, and 32 percent of Government administration or defence.
However, there is still a need to establish this practice in wholesale trade and manufacturing, where the dominant attitude is to buy solely or mostly on price.
More on ShapeNZ research here.
For more survey results, check out the following stories:
Saying yes to sustainable business in New Zealand
Smart businesses work to be nice to the planet
Image: Flickr - TheTruthAbout...
