making the case for sustainable procurement minutes...working with your supply chain case study...
TRANSCRIPT
Making the Case for Sustainable Procurement
Vicki O’Kelly
Green Blue Skies Limited
What is Sustainable Procurement?Sustainable Procurement is...“a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment”.
Source: CIPS - A Cynic’s Guide to Sustainable Procurement
Sustainability Myths
“Sustainability is about being an environmental activist “
“The sustainable option is going to be more expensive”
“Sustainable procurement is about buying recycled paper”
“Sustainability makes the tendering process more complex ”
Key Benefits
• Reduced operating costs
• Improved identification and management of risk
• Creation of value through enhanced reputation and positive customer response
• Increased innovation
• Enhancing structure and measurement of social and environmental initiatives
Top Tips
• Know your baseline
• Understand your sustainability ‘drivers’
• Review your procurement policy
• Take a risk based approach
• Identify needs vs wants
• Adopt a Life Cycle Costing approach
• Understand how sustainability fits into the procurement cycle
Know Your Baseline
• What you don’t know you can’t measure!!!
• Understand your current spend, supply chain and consumption patterns
Visible Costs
Hidden Costs
TransportationTraining
MaintenanceWaste Disposal
Understand your Sustainability ‘Drivers’
Risks Opportunities
• Legislative compliance
• Supply chain pressures
• Reduce costs
• Competitive advantage
• Employee satisfaction
• Market opportunities
• Corporate image
Supply Chain Pressures
Case study – London Olympics 2012
• Suppliers had to meet the requirements of LOCOGs Sustainable Sourcing Code
• Based on five key questions:1. Where does it come from? 2. Who made it? 3. What is it made of? 4. What is it wrapped in?5. What will happen to it after the Games?
Working with your Supply Chain
Case Study – Unilever
• Partnered with the Rainforest Alliance to drive sustainable production throughout the company’s supply chain for black tea.
• Certified farmers manage their tea crop better, reducing farming intensity and securing higher returns partnership
• Increase sales in highly competitive markets - UK sales increased by 5.6 percent in 2008 following an advertising campaign announcing the partnership.
Legal Obligations
Some Examples....
• Legislation on pollution and waste management
• Taxes on waste, energy and natural resources
• Measures to increase environmental and social reporting
• Best practice guidelines on corporate responsibility and community investment
• Producer responsibility for end-of-life products
• Phasing-out of environmentally damaging substances
• Equality Act 2010
• The Public Services (Social Value) Act 2012
Review your procurement policy
• Is it relevant to your organisation?
• What are your priorities and challenges?
• How does procurement link with wider organisational strategies?
Priorities:
• Reduction in CO2 emissions
• Reduce waste
• Value for money
• Ensure supplier integrity
• Engagement with local suppliers
Challenges:
• Budget
• Legislation
• Environmental taxes
• Hazardous substances
• Stakeholder expectations
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Prioritisation Tool
• Structured approach to assessment of categories of spend: Amount of spend Risk Scope Influence
• Designed to be a standard approach across the public sector (originally for UK)
• Focuses resources in areas with the greatest potential to improve sustainability
• Deliver improvements in priority areas
• http://sd.defra.gov.uk/advice/public/nsppp/prioritisation-tool/
Amount of Spend Risk ScoreScope to do
MoreInfluence
on Suppliers
Identify needs vs wants
Adopt a Life Cycle costing approach
The higher initial price of the greener product is more than compensated by the much lower usageand disposal costs.
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Consider sustainability throughout the procurement cycle
Identify Need and Assess
Risk
Define the Specification
and Invite Bids
Evaluate and Select
Suppliers
Evaluate Bids from Suppliers
and Award
Audit and Improve Supplier
Manage the Contract & Disposal
Route
Useful Tools:
• Flexible Framework
• Government Buying Standards
• Risk Prioritisation Tool
• People
• Policy, strategy and communications
• Procurement process
• Engaging suppliers
• Measurement and results
The Flexible Framework
Government Buying Standards
• A set of sustainable specifications for a range of commonly-purchased products, including IT equipment, white goods, paper, etc.
• They consist of both a set of mandatory minimum standards and best practice specifications.
• The minimum standards are mandatory for central government and its agencies but the best practice specifications are voluntary and highlight the “best in class” products in certain areas.
1. Construction
2. Office ICT equipment
3. Electrical Goods
4. Furniture
5. Paper and Paper products
6. Textiles
7. Transport
8. Food
9. Cleaning Products
10. Horticulture and parks services
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“the measure of success is behavioural change, not the number of glossy Environmental or Corporate Social Responsibility Reports published”
