Through our Procurement department, Waste Management has the opportunity to demonstrate our environmental and social commitments by making purchases with an awareness of our impact on the environment. We also have unique opportunities to work collaboratively with suppliers to help them cut waste, use recycled materials and leverage their expertise to help us reach our sustainability goals.
Our Procurement Policy defines value as “the best combination of quality, cost, delivery, service technology, sustainability and risk in equipment, materials, goods or services.” For third-party waste service providers, we require environmental assessments that review compliance with all applicable environmental, health and safety requirements. (For a discussion of Waste Management’s role in the global supply chain, visit www.thinkgreen.com/ceo.)
The Waste Management Supply Chain team receives training on the Procurement Policy and Procedures when the procedures are updated and new members join the team.
Our suppliers are expressly bound by the Waste Management Code of Conduct for Consultants, Contractors and Suppliers, which is included in all contracts for all significant amounts (visit www.wm.com/about/company-profile/ethics/pdfs/WM_Supplier_Code.pdf). This Code of Conduct has been amended recently with a provision referencing the United Nations Global Compact (UNGC) and our expectations that all suppliers will respect UNGC principles. The provision is included in our master template that is used for both new and renewal contracts.
We conduct periodic business reviews with critical suppliers to ensure contract and Code of Conduct compliance. The Code includes these obligations:
The Supplier Code of Conduct also lists a domestic and international Waste Management Compliance and Ethics Help Line number. The Code is monitored through the Help Line, which is available to all consultants, contractors and suppliers as a resource in case of questions. All consultants, contractors and suppliers are obligated to report any known or perceived violation of laws, regulations, Waste Management policies or our Code of Conduct. Note that we have amended our Supply Chain Code of Conduct to reference the United Nation’s Global Compact’s Ten Principles and our expectation that all suppliers will respect our alignment with those principles. This provision is included in our master template for contracts to be used for new and renewal contracts. We reserve the right to audit and inspect supplier operations during the term of the contract and for a limited time after termination.
We work to minimize risks in our supply chain by analyzing our spending on all critical categories of materials, goods and services as part of our strategic sourcing and category management procedures. We manage critical categories within a documented process to ensure there are adequate numbers of suppliers in place for each critical category to guarantee supply. Critical suppliers are defined as those whose absence could jeopardize our business objectives. In 2016, we identified approximately 500 Tier 1 suppliers which, combined, account for 75 percent of our total procurement spend. We estimate that no more than 1 percent of Waste Management’s supply chain expenditures involve purchases from companies located outside North America and Europe.
We work with our suppliers to envision a closed-loop supply chain by purchasing recycled products and supplying our vendors with waste materials that can be recycled into new products. The following are some examples:
The single-largest category in our supply chain spending in any given year is collection equipment and the fuel to run it (over 20 percent of total spending). For nearly a decade, we have focused on equipment efficiency and innovations to reduce the GHGs associated with this aspect of our supply chain. Our truck fleet continues to transition from diesel to natural gas, cutting GHG emissions by 21 percent with each new truck. More than 90 percent of the trucks we purchased in 2015 had natural gas engines. We have also worked for years with truck suppliers to develop ways to lightweight our vehicles, using new types of materials as technology develops and safety specifications allow. Waste Management has also been a leader in the use of hybrid vehicles, piloting them for use in our industry.
Waste Management believes that active engagement in business groups and broadly based stakeholder groups is one of the best ways to continually challenge ourselves to do better. Improving the sustainability of our fleet requires collaboration, such as membership in the National Clean Fleets Partnership. This partnership operates more than 1 million commercial vehicles nationwide, and it is committed to finding ways to improve the fuel efficiency of U.S. trucks. We are also members of the U.S. EPA’s SmartWay Transport partnership and of the Energy Security Leadership Council of Securing America’s Future Energy (SAFE), both of which are dedicated to improving heavy-duty vehicle efficiency and reducing emissions throughout the transport supply chain.
At Waste Management, we work to create an environment where everyone has an opportunity to succeed. As part of our commitment, we identify and reach out to underrepresented groups, such as minority-, women- and service-disabled-veteran-owned businesses, to work with us and add value to our supply chain.
Our ongoing supplier diversity program focuses on maintaining a balance between high levels of service, quality and competitive pricing, while assisting businesses that have been historically overlooked in the procurement process. The program ensures that these businesses participate in each bid process where such a supply base exists. In 2015, we purchased nearly $87 million in products and services from diverse suppliers.
All of our Product and Service Agreements contain language that promotes our diversity program. The goal is for our suppliers to have processes in place that encourage 10 percent of the total dollar amount of related purchases of services and materials to be placed with minority, women’s or veteran business enterprises.
Waste Management does not have an internal diversity certification program, but rather recognizes third-party public- and private-sector certifications, such as the National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council (WBENC). In 2015, we conducted an audit of all registered minority-owned businesses for the purpose of:
The audit allowed us to ensure our database is up to date, and that all registered minority-owned businesses have the proper certification on file. Additionally, a new process was introduced so that suppliers can update and upload diversity certifications. This process also sends an automated email reminder from our TSMS system prior to expiration of certificates.