Delivering Sustainable Procurement
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Transcript of Delivering Sustainable Procurement
Delivering Sustainable Procurement
Barbara MortonDirector – Action Sustainability
National Sustainable Procurement Conference 26 March 2008
Outline
1. Sustainable procurement in the public sector
- Does the public sector have a right to procure unsustainably?
2. Business case for sustainable procurement
3. Priorities and building blocks4. What’s happening – and what’s not?
Who – Action Sustainability…?
• Social Enterprise - to lead and inspire sustainable procurement
• Support and facilitate - Strategic Supply Chain Group
• Provide leading edge commentary and thinking - on sustainable procurement
• Support organisations wishing to procure more responsibly
- with training, awareness, benchmarking, consultancy
www.actionsustainability.com
What – 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”.Footnote:Sustainable Procurement should consider the environmental, social and economic consequences of:Design; non-renewable material use; manufacture and production methods; logistics; service delivery; use; operation; maintenance; reuse; recycling options; disposal; and suppliers' capabilities to address these consequences throughout the supply chain.”
Procuring the Future – June 2006
What – Sustainable Procurement…?
Who is interested and why?
• Sustainable Development Commission in ‘watchdog’ role
• National Audit Office, Audit Commission and Healthcare Commission
• Permanent Secretaries• Sustainable Procurement & Operations
Board• Monitoring, measuring, benchmarking
Business Case for Sustainable Procurement
• Delivering on government SD objectives• £150 billion per annum• Against background of:
- Transforming Government Procurement- Capability reviews
• Sustainable Procurement is good procurement
• Efficiency and sustainability in same package
UK Sustainable Procurement Action Plan
• Central government March 2007• Clear priorities:
• Climate change mitigation• Carbon neutral by 2012
• Natural resource protection• Biodiversity• Illegal logging and sustainable timber
• Consult on need for ‘centre of sustainable procurement excellence’
UK Sustainable Procurement Action Plan
• Government supply chains and public services that are increasingly:- Low carbon- Low waste- Water efficient- Which respect biodiversity and deliver our
sustainable development objectives
• Defra-sponsored SP workshops for OGDs now being delivered
What? Sustainable Operations Targets
Carbon• Government office estate
carbon neutral by 2012.• Carbon emissions down
12.5% by 2010 (30% by 2020).• Carbon emissions from
vehicles down 15% by 2010/11
Energy• Energy efficiency/m2 up 15%
by 2010 (30% by 2020).• 10% of electricity from
renewables by 31 March 2008• 15% of electricity from CHP by
2010
Water• Water consumption down
25% by 2020.
Waste• Waste arisings down 5% by
2010 (25% by 2020).• Waste recycled up 40% by
2010 (75% by 2020).
Local Government & Health Care responses
• Local Government Sustainable Procurement Strategy – November 2007
• Audit Commission role
• Health and social care sector response: Procuring for health and sustainability 2012 – sustainable procurement action plan
Business Case for Sustainable Procurement
• Local government - £40 billion per annum - Sustainable Community Strategies- Commissioning- Comprehensive Area Assessment- Valuing socio-economic benefits- Local economic regeneration- Third sector, SMEs and local suppliers
How? Delivering sustainability through procurement
• 2 Building Blocks of SPTF• Flexible Framework• Prioritisation Methodology
- Risk-based- Helps focus resources
• Integrating sustainability throughout the procurement process
Flexible Framework
Time
Am
bit
ion
Foundation
Embed
Practice
Enhance
Lead
Flexible Framework
• People• Policy, strategy and communications• Procurement process• Engaging suppliers• Measurement and results
National Priority Spend Areas
0
5
10
15
20
25
Construction - Building and refit
Health and Social Work
Construction - Highways and local roads
Food
Uniforms/clothing and other textiles
Waste
Pulp, paper and printing
Construction - Operations and Maintenance
Energy
Consumables - Office machinery and computers
Furniture
Transport - Business TravelTransport - Motor Vehicles
IT Services/ Computer servicesConsumables - White goods
Pharmaceuticals
Telecommunictions, radio, TV
Chemicals
Scores as a % of Totals
Infuence
Scope
Risk
Priority areas
• Construction• Health and Social Work• Food• Uniforms, clothing and other textiles• Waste• Pulp, paper and printing• Energy• Consumables – office machinery and computers• Furniture• Transport
Prioritise Action - Risk and Spend
Risk
Spend >0.5%
Secure
Cost DrivenAcquisition
Critical
Buyer Approach - Scope and Risk
Scope
Risk
Quick Win
CampaignMarginal
Transform
Market Engagement Strategy - Scope and influence
Scope
Influence
Challenge
Research &
Development
Encourage
Pioneer
The Procurement Process
Specification
Supplier qualification and
appraisalIdentification of
need
Contract managementand review
Tendering andtender evaluation
Accounting:whole life costing
Environmental Purchasing in Practice CIPS/IEMA/CIPS 2002
How? Challenging the need
• Influencing behaviours of internal customers- Budget-holders, users, ‘front line’
• Demand management: – influencing the £150 billion per annum at start of process
• New capabilities required = challenging• Informed dialogue with key markets
The procurement process
Specification
Supplier qualification and
appraisalIdentification of
need
Contract managementand review
Tendering andtender evaluation
Accounting:whole life costing
Accounting and budgeting practice
• Engaging finance directors and senior management
• Whole life costing - To what extent is it applied in practice?
• Westminster Sustainable Business Forum – Whole Life Costing and Sustainable Procurement study- Call for evidence
• High upfront capital costs- see UK SPAP ‘invitation’
Page 21 paragraph 6.7
• “…sponsoring Departments will review budgeting arrangements and performance frameworks to ensure any barriers to choosing sustainable solutions are resolved.
• In addition, where Departments believe an upfront cost constraint prevents them from choosing the most sustainable option, they may raise this with HMT.”
What’s happening - and what’s not?
• Building capacity –- SP training for other government departments –
sponsored by Defra
• Local Government Learning Networks- Wakefield & Sefton
• Websites and ‘cupboards’• National Improvement and Efficiency Strategy
- Role of RIEPs?- On their agenda?
What’s happening - and what’s not?
• Re-defining value for money- Wider interpretation- Valuing socio-economic benefits
• Emerging agenda for scrutiny bodies- NAO reports demonstrate lack of progress
• Sustainability embedded into procurement practice?
• Opportunity for procurement to be recognised • Delivering corporate objectives
Thank you for your attention
Barbara MortonAction Sustainability
www.actionsustainability.com
Mobile: 07766 023560