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Key considerations

  1. What are the benefits of sustainable procurement?
  2. How can we develop a sustainable procurement process?
  3. How can we increase procurement from Small and Medium Enterprises (SMEs) and local businesses?
  4. How can we increase sustainable procurement capability among staff?
  5. How can we measure our progress in delivering sustainable procurement?
  6. Are there any minimum environmental standards that we should comply with in relation to procurement?
  7. What are the key logistical considerations?

     

1. What are the benefits of sustainable procurement?

There are a number of organisational benefits to be derived from adopting a sustainable procurement policy, including the following.

  • It can offer an opportunity to reduce costs, for example by reducing energy demand by procuring more efficient boilers or through procuring products with a longer lifespan meaning that replacement purchases have to be made less frequently.
  • It can stimulate innovation in the marketplace and encourage new product development.
  • Supply chains are a potential source of risk. Managing procurement sustainably can can help organisations to mitigate these risks and protect reputation.
  • Procuring from a sustainable source helps ensure security of supply.
  • It contributes towards other organisational objectives such as Community Strategy priorities for local authorities or corporate social responsibility (CSR) agendas.
  • It helps organisations to comply with environmental law.
  • Improving social, environmental and economic conditions has wider health benefits for society.

 2.  How can we develop a sustainable procurement process?

The Sustainable Procurement Task Force developed a 'Flexible Framework' setting out five levels of maturity within a number of areas of sustainable procurement (People; Policy, Strategy and Communication; Procurement; Engaging suppliers; and Measurements and Results).  The Framework can be used as a basis for developing a sustainable procurement process as it provides details of the actions an organisation should take to achieve each level of maturity.

By building sustainability into the procurement process at an early stage, the Metropolitan Police increased by 500% the amount of recycled content products they procure.

A number of tools and other pieces of guidance have been produced to help organisations to develop sustainable procurement processes including the following.

  • The Office of Government Commerce (OGC) and Defra have produced a 'Joint Note on Environmental Issues in Purchasing', showing how environmental issues can most effectively be taken into account during the procurement process.  The OGC has also produced a note on considering social issues during the procurement process.  Both documents break down the procurement process into five steps and explore the opportunities for building sustainability in at each stage: Identifying a procurement need; Creating a product/service specification; Selecting candidates for tender; Tender evaluation and Contract management.
  • OGCbuying.solutions' 'Top Ten Procurement Tips for Sustainability' provides a quick checklist of simple activities that can be undertaken to improve the sustainability of procurement.
  • Waste & Resources Action Programme (WRAP) works in partnership to encourage and enable organisations and consumers to be more efficient in their use of materials and to recycle more things more often.
  • Specifically for local authorities, the LEAP GPP website contains a suite of tools and guidance showing how to develop and implement a sustainable procurement strategy.  The Sustainable Procurement Information Network has a number of useful tools to help local authorities improve their procurement process, including model specification clauses for food supply contracts, case studies and toolkits.
  • The Mayor of London’s Green Procurement Code is a free support service helping London-based organisations to procure recycled products.
  • Tools and guidance for improving procurement practices in the NHS can be found in their Good Corporate Citizen toolkit developed in conjunction with the Sustainable Development Commission.  Forum For The Future has also developed sustainable procurement tools for local authorities and the NHS.
  • The Scottish Executive has developed guidance on public procurement and sustainable development which explores issues such as whole life costing, value for money and the purchaser’s role in the procurement process.
  • There are a number of sites that look at particular issues relating to procurement.  Examples include the OGC guide to sustainable procurement in relation to construction, the NHS Purchasing and Supply Agency guidance on waste procurement.
  • The European Union has also produced its own 'Buying Green Handbook' covering public procurement.
  • The Ethical Trading Initiative is an alliance of companies, non-governmental organisations (NGOs) and trade union organisations that promotes and works to improve the implementation of corporate codes of practice which cover supply chain working conditions.  Sedex (Suppliers Ethical Data Exchange) is a web based system that enables member companies to share data on labour practices in the supply chain.  The SA8000 Standard and verification system is a credible tool for assuring humane workplaces based on the International Labour Organisation conventions, the Universal Declaration of Human Rights and the UN Convention on the Rights of the Child.

 3.  How can we increase procurement from Small and Medium Enterprises (SMEs) and local businesses?

Research by the New Economics Foundation suggests that every £1 spent with a local supplier is worth £1.76 to the local economy, compared with only 36p if it is spent outside the area.  This means that spending locally is worth almost 400% more to the local economy.

Research by the Welsh Assembly Government indicates that for every 1% extra spent on procurement within Wales, 2,000 jobs are created.  Their charter for SME procurement aims to promote access to the public sector marketplace.

Increasing tenders from small and local producers is also one of the aims of the Public Sector Food Procurement Initiative.  One potential means of achieving this is by breaking down large procurements into smaller "lots" as this may enable SMEs to effectively compete for contracts.

The Third Sector also has a role to play in delivering sustainable procurement.  Details of how they can contribute to the health and social services sector can be found in the Department of Health report 'No excuses'.  Increasingly social enterprises are becoming involved in delivering public and private sector services.  A social enterprise is a business that trades  for a social or environmental purpose, reinvesting the majority of its profits to further these goals. 

The Northern Ireland Central Procurement Directorate has produced guides for both SMEs seeking to widen their customer base to include the public sector and also public sector purchasers seeking to procure from SMEs.

 4.  How can we increase sustainable procurement capability among staff?

Sharing best practice

There are an increasing number of networks which offer advice and support and an opportunity to share knowledge around developments in sustainable procurement, including the following.

Training

There are a number of courses that look specifically at sustainable procurement, including the following.

  • National School of Government runs two courses on sustainable procurement. 'Buying a Better Future - Purchasing as if the Planet Mattered' aimed at procurement officers and decision-makers and 'High-Performance Sustainable Development in Government', a workshop that encourages leadership in procurement by demonstrating real sustainable soluitions.  They also offer a course 'Introducing the EU Procurement Directives', which includes their impact on sustainability.
  • NHS Purchasing and Supply Agency (PASA) runs a similar course aimed at NHS staff.
  • Chartered Institute of Purchasing and Supply provides a wide range of training courses, conferences, workshops and seminars and professional qualifications relating to procurement.
  • actionsustainability provides training tailored to the individual requirements of an organisation.  They are a social enterprise that supports the Strategic Supply Chain Group, a cross sector sustainable procurement group made up of Directors and Senior managers from the UK's leading private companies, Government departments, professional institutes and academic organisations.
  • Business in the Community (BITC) delivers a Responsible Supply Chain Management training course for procurement and purchasing teams and managers to understand and resolve dilemmas that could carry a high reputational or business risk, as well as providing tailored responsible supply chain management training.
  • Ethical Trading Initiative provides a training programme that covers ethical trade including workplace auditing, strategic issues such as embedding ethical trade principles into core business practices and working effectively with other stakeholders. 

New courses are being developed all the time, if you know of any others that you think should be included, please let us know.

To find out how to increase sustainability capacity generally among staff, explore the Skills module.

 5.  How can we measure our progress in delivering sustainable procurement?

actionsustainability has developed a pilot benchmarking tool based on the Flexible Framework to help organisations benchmark their performance against the Sustainable Procurement Task Force recommendations.

Forum For The Future has also developed a Public Sector Sustainable Procurement Assessment Tool.

Procura+ has developed a Procurement Scorecard to help public authorities keep track of their sustainable procurement activities.

 6.  Are there any minimum environmental standards that we should comply with in relation to procurement?

Increasingly companies are being benchmarked on their sustainability performance, for example, FTSE4Good and Dow Jones Sustainability Indices.  Many of these indicies set minimum levels of expected performance.  FTSE4Good have published criteria for supply chain labour standards that they expect identified companies to meet to maintain a place in or enter the index.

Central government departments are expected to meet certain minimum environmental standards when procuring common products such as IT equipment, white goods and construction materials.  These standards are set out in the Defra owned 'Quick Wins' publication, hosted on the Government's sustainable development website.

Procura+ is an initiative designed to help support public authorities across Europe in implementing sustainable procurement.  The campaign has looked at 6 product groups that have a particularly high potential for sustainable procurement activities, and has developed a set of simple purchasing criteria for each.  The products are: buses, cleaning products and services, electricity, food and catering services, IT products and building construction and renovation.

From 1 April 2009, only timber and timber products originating from independently verified legal and sustainable sources or from a licensed FLEGT partner will be demanded for use on the Government estate; appropriate documentation will be required to prove it. From 1 April 2015, only legal and sustainable timber would be demanded.  The Central Point of Expertise on Timber Procurement's website provides details of how public sector buyers and their suppliers can meet the UK Governments UK timber policy requirements.

The International Labour Organization promotes minimum social standards including: rights at work, encouraging opportunities for decent employment, enhancing social protection and strengthening dialogue on work-related issues.

In the Energy White Paper, the Government committed to achieving an average carbon performance of 130g/km CO2 or lower for new cars in the government fleet by 2010/11.  It will apply to all new cars bought for administrative purposes and will help government to meet the wider target of a 15% reduction in carbon emissions from road transport across government by the same year.

 7.  What are the key logistical considerations?

The transportation of raw materials and manufactured products poses a key risk to sustainability, particularly in the private sector.  In 2004, for example, it is estimated that 33.7 million tonnes of carbon dioxide were emitted as a result of domestic freight transport.  In the same year the breakdown of carbon dioxide emissions by mode of domestic freight transport was as follows:

  • HGVs 78.5%
  • Vans 13.3%
  • Waterways 6.8%
  • Rail 1.1%
  • Pipeline 0.3%
  • Air 0.1%

The overwhelming sustainability issue associated with transport is its significant contribution to the emission of greenhouse gases and particulates.  It has been estimated that freight transport accounts for approximately 6% of total carbon dioxide emissions in the UK (based on 'end user' values).  Further implications of this include the social costs such as congestion, accidents, the destruction of roads and noise pollution, that arise from freight transportation.

The Climate Change Working Group of the Commission for Integrated Transport (from which the above figures were taken) provides a more detailed analysis of UK carbon dioxide emissions.

Since the mode of transport a company elects to employ to transport goods can have such a significant impact on the level of carbon dioxide produced it is therefore of the utmost importance that appropriate and informed decisions are made.  There are several sources of information which are available to help organisations to take the most environmentally sound decisions in term of transportation.  These include the Department for Transport’s Freight Best Practice website, Defra’s 'Reducing the External Costs of the Domestic Transportation of Food by the Food Industry' study, and publications by the Sustainable Development Commission.

For more specific information on logistics in the food sector explore the Food sector module.

In recent years in recognition of the substantial contribution of supermarket related food transportation to UK greenhouse gas emissions, the consequent environmental and climate implications, and their significant potential to positively contribute to more sustainable practice, many of the major supermarket chains have begun to employ innovative and less environmentally damaging transport strategies.

Are there key considerations we haven’t included?  If so, please let us know.

Do you have another example of how these challenges can be overcome?  If so, please submit a case study.