What is meant by Sustainable Development?

1. What is meant bySustainable Development? The goal of sustainable development is to enable all people throughout the world to satisfy their basic needs and enjoy a better quality of life without compromising the quality of life of future generations. “We do not inherit this earth from our parents……we borrow it from our children” (African proverb) John King – April 2007

2. Why Sustainability Matters:Living within Environmental Limits Life supporting resources are DECLINING: Clean air & water, stable climate, viable forests & fisheries • Consumption of life supporting resources is RISING: • Population increase from 6bn to 9bn • Consumption per head increases 4 – 6x

3. What is Sustainable Procurement (SP)? Acquiring goods & services that: • Meet users’ needs • Deliver long-term Value for Money • Maximisesocial & economic benefits • Minimise damage to the environment & health *** Ensuring we get the full environmental, social & economic dividend from every £ we spend ***

4. Some General Sustainability Principles LESSMORE - Fossil fuel usage - Energy & resource efficiency - Water consumption - Renewable energy - Transport - Recycled & reusable items - Excess packaging - Local supply - Disposable items - Sustainably managed resources - Hazardous materials - Sweatshop labour

5. Why Buy Sustainably?1. Whole Life Cost Savings Sustainable products • Use less energy, water, emissions & consumables • Create less waste and are easier to recycle • Are less hazardous to use and dispose of • Have a longer life (reusable vs disposable)

6. Why Buy Sustainably?2. Reduces risk & protects reputation • RISK • - Anticipate potential new legislation & costs (e.g. WEEE directives) • Avoid supply shortages by reducing dependency on scarce resources (e.g. use of sustainably managed timber) • Anticipates changing environmental constraints (e.g. buildings designed to operate in hotter, dryer Summers) • REPUTATION • Many examples of organisations tainted by poor procurement decisions: • Govt offices using illegal tropical hardwood • Electronics & clothing firms using sweatshop labour • Contaminated battery eggs causing health scares

7. Why Buy Sustainably?3. Government expectations “Procuring the Future”: UK Action Plan • All Chief Execs held accountable • Mandatory minimum environmental standards • Performance measured against the “Flexible Framework” • Investments & auditing based on sustainable Long Term Value for Money rather than short-term cost cutting

8. Why Buy Sustainably?4. Central Govt targets All Central Govt departments must: • Be carbon neutral by 2012 and by 2020: • Recycle 75% of the waste • Reduce waste by 25% • Reduce water consumption by 25% • Increase energy efficiency by 30% per square metre Councils should aim to meet or exceed these targets!

9. Why Buy Sustainably?5. Delivering long-term Value for Money • Spending public money in the long-term public interest: - for, not against, the Community Strategy - meeting our Wellbeing Powers (1) - without undermining health, environment and opportunities • Delivering pan-public sector savings • Kick starting innovation and new technologies

10. Sustainable Procurement (SP) Local Govt procurement totals around £40 billion p.a. and so has significant purchasing power to drive the market towards the supply of sustainable products and services. However, this can only be achieved if the thousands of public sector procurers work together to send a clear, unified signal to the market.

11. Sustainable Procurement (SP) There is scope to include a wide range of social, environmental and economic policy objectives in public procurement, providing that requirements: • are relevant to the subject matter of the contract • do not undermine the need to secure value for money for the contracting authority in awarding the contract • are non-discriminatory and transparent(contract notices & specifications) • where the EU rules apply, are consistent with the criteria allowed under the Directives/UK regulations for each stage of the procurement process (1)

12. Social Objectives If the Council’s duty to promote race, gender & disability equality is relevant to the goods, works or services to be purchased, then this can be reflected in procurement requirements so as to drive social improvements in the following areas: • Ensuring fair pay & working conditions through the Supply Chain • Increasing levels of employment, skills & equality in the East Midlands • Providing new employment opportunities for marginalised groups • Tackling child labour & slavery • Supporting Fair & Ethical Trading • Encouraging local SMEs & Social Enterprises

13. e.g.: Fair Working Conditions • Standards • ILO / Fairtrade or equivalent • No forced or child labour • Maximum 48 hr week • Paid overtime • Fair, “living” wages (sufficient for a single parent to support their family & dependents) • Freedom to unionise • Freedom from bullying, racial or sexual harassment • Healthy working environment What to demand Evidence • Labour and H&S Policies • Self-assessment audit • Independent audit Scope • Supplier • Supplier + tier 1s • Supplier + tier 1 & 2s Risks • EU guidance unclear • Smaller suppliers may lack resource • Complex to audit without 3rd Party • Market test first

14. e.g.: Encourage SMEs & Social Enterprises Consider the potential to: • Use local lotting to break down larger contracts • Ring-fence a pilot contract for local or Social Enterprise supply • Encourage collaboration between local SMEs & Social Enterprises • Encourage larger suppliers to sub-contract to local SMEs and Social Enterprises • Hold supplier briefings prior to ITT to ensure that specifications are deliverable by smaller firms • As a minimum: • Advertise in local press and on “Source Notts” web portal • Minimise red tape and financial requirements

15. Environmental Objectives • Reduction in carbon emissions and ozone depletion from offices & vehicles • Reduced waste arisings (waste prevention) • Less water pollution • Increased level of recycling • Improved resource management (e.g. energy, water, forestry) • Improved energy efficiency • Reduction in biodiversity loss

16. Economic (Financial) Objectives • Reduced utility bills & operating costs by specifying energy, water & resource efficient products, services & buildings • Lower waste management fees through the procurement of environmentally preferable products

17. Sustainable Procurement should consider the environmental, social and economic consequences of:

18. Key SP Policy Principles • Minimising or Eliminating the Need to Purchase: Avoiding the need for the product in the first place: Using e-mail instead of traditional paper memos can eliminate the use of large amounts of paper while saving on purchasing, filing, storage, and disposal costs. Cutting down on the materials required for a task: Packaging for product transportation reduces the need to recycle or dispose of these materials when they are no longer needed. Buying durable, repairable & upgradeable products & equipment: Because these products need to be replaced less frequently, they reduce both waste & the amount of energy & materials needed to manufacture new products, while lowering purchasing costs.

19. Key SP Policy Principles Improving storage, inventories & stock management: Can help to reduce the costs of spoilage through obsolescence, and minimise administrative, transportation and distribution costs. Buying products in bulk & in concentrated form (when possible): Minimises the shipping and packaging waste associated with delivery and defers the need to buy new products. Utilising Product Service Systems: This means using a service, rather than a physical object to meet the end users’ needs, e.g. cleaning contracts, leasing office furniture, a piece of equipment or vehicles. This can eliminate the need to buy, maintain, and ultimately dispose of material while minimising environmental impacts.

20. Key SP Policy Principles Postponing the replacement of products (for as long as possible): Organisations that use products as long as they function obtain maximum value from their purchases. Training employees on more efficient use of the equipment: For example, training on energy-efficient features of the office equipment helps reduce electricity costs. Ensuring that maximum value is extracted from products at the end of their useful life: More and more alternatives to landfill are becoming available, from textile manufacturers that offer recycling programs for used carpet to re-manufacturers that clean and resell unneeded computers, reuse the parts in other machines, or recycle the components as scrap.

21. Key SP Policy Principles • Advertise locally and remove barriers to SMEs and Social Enterprises: www.sourcenottinghamshire.co.uk • Introduce mandatory minimum standards for products & services where cost & risk allow • Provide annual sustainability training to all ‘buyers’ • Communicate SP Policy to suppliers • Report on social & environmental as well as financial benefits of tenders

22. Key SP Policy Principles • Review contracts against sustainability impacts – address opportunities through tender process • Evaluate tenders against Whole Life Costs • Reflect sustainability opportunities in spend analysis & work planning • Use innovation & supplier development to drive sustainability & cost

23. Whole-Life Costing Approach The costs throughout the product’s life-cycle must be considered, i.e. the costs of purchasing, operating and maintaining, and disposing of the product. Despite the higher up-front costs (price in the diagram), for many green products the reduced operating & disposal costs (use and waste) mean that they offer a significant return on investment.

24. Building Blocks The Sustainable Procurement Task Force (SPTF) identified three building blocks for sustainable procurement: ( A ) “Flexible Framework” approach ( B ) Setting priorities ( C ) Toolkits for procurers

25. ( A ) The Flexible Framework: a ‘route map’ to making progress • Tool to be able to check: - where are we now (benchmark) - where we want to be (set aspirational goals) - how to get there (measure progress) • Common language to compare public sector performance • To help identify an average level to benchmark progress against EU members in 2009

26. Flexible Framework Targets Flexible Framework identified as the tool to help meet the target set in UK Govt’s Sustainable Development Strategy for UK to be a leader in Sustainable Procurement by 2009: • Target level 1 for April 2007 • Target level 3 by Dec 2009 • Level 5 in at least one area by Dec 2009

28. Lead Flexible Framework Enhance Practice Ambition Embed Foundation Time

29. ACTIONS TO SUPPORT PEOPLE Level 1 Level 2 Identify SP Champion All people involved in procurement activity have received sustainability training Key Procurement staff trained in the basic principles of sustainability (environmental, social, community benefits and regeneration etc) Key staff have received advanced sustainability training SP principles included in key employee induction programmes Procurement Job descriptions include requirements for SP competencies. All relevant job descriptions include requirement to support sustainability principles Recruitment includes SP criteria in candidate selection

30. ACTIONS TO SUPPORT POLICY, STRATEGY & COMMS. Level 1 Level 2 The Council’s sustainability values have been identified, e.g. local economic regeneration, SME/BME/Third Sector engagement The Council’s sustainable development values have been described in greater detail, e.g. local economic regen, SME/BME/third sector engagement Overarching organisational sustainability objectives agreed An organisational Sustainable Development Strategy is in place Links between organisational sustainability objectives and procurement have been made Key stakeholders in relation to SP have been identified A simple SP policy is in place and endorsed by the Chief Executive A detailed SP policy is in place, endorsed by Chief Executive which is part of a wider Sustainable Development Strategy The SP policy is communicated to all staff within procurement, key specifiers and others as necessary The SP policy is cascaded throughout the organisation A programme to raise supplier awareness of sustainability issues is in place The SP policy is formally communicated to key suppliers & their views actively sought

31. ACTIONS TO SUPPORT THE PROCUREMENT PROCESS Level 1 Level 2 High-level Council expenditure analysis has been undertaken and key expenditure areas have been identified Detailed organisational expenditure analysis has been undertaken & this has been assessed for key sustainability risks, scope to change & buyer influence Basic sustainability criteria integrated into key contracts to improve performance (product environmental performance, emissions, energy consumption.) Expenditure & sustainability risk, scope and influence are used to drive contract/ expenditure/ procurement resource prioritisation and allocation RFQs/ITTs start to ask for alternative solutions that are more sustainable. Where benefits are clear the more sustainable solution is chosen, e.g. clear criteria & weightings Key contracts are assessed for basic sustainability risks with actions being taken to manage the risk, e.g. at identification of needs, specification, evaluation stages All costs associated with the procurement process are assessed so that the total cost is determined over the anticipated/stated life of the purchase/service (e.g. purchase price + energy consumption + spares + training + maintenance + insurance + consumables + disposal costs, etc) Those submitting tenders are actively encouraged to offer more sustainable solutions and where benefits are clear the more sustainable solution is chosen, i.e. value for money over whole life Purchases take into account all “Quick-win” criteria identified by central government. If a “Quick-Win” product is available it is always bought Consideration of Whole-life-cost analysis for key contracts (signpost to Green Book guidance)

32. ACTIONS TO SUPPORT ENGAGING SUPPLIERS Level 1 Level 2 Organisational supplier spend analysis has been undertaken and the key suppliers to the organisation have been identified, e.g. by spend and criticality Detailed supplier analysis has been undertaken and the spend for all key suppliers to the organisation have been identified A high level examination of the sustainability performance of key suppliers has been undertaken A detailed examination/ update of the sustainability performance of high impact suppliers has been undertaken Key suppliers are targeted for communication about the new sustainable procurement policy, their views are sought to inform the policy and identify areas for greater sustainability in the contracts A programme of supplier engagement has been initiated, with senior management involvement Suppliers are beginning to identify their key suppliers and a sustainable approach to supply chain management is beginning to evolve

33. ACTIONS TO SUPPORT MEASUREMENTS & RESULTS Level 1 Level 2 Major sustainability impacts of procurement activity have been identified, e.g. major environmental, economic and social impacts. A detailed appraisal of the sustainability impacts of procurement activity has been undertaken. Simple measures based on achieving all aspects of the foundation level of the flexible framework are put in place and delivered. Measures are implemented to manage the high-risk impact areas identified, e.g. monitor product and service performance using KPI’s, report non compliance, failures, incidents.

34. ( B ) National Priority Areas • Construction (building & refit, highways & local roads, operations & maintenance) • Health and Social Work (operating costs of hospitals, care homes, social care provision) • Food • Uniforms, clothing and other textiles • Waste • Pulp, paper and printing • Energy • Consumables (office machinery & computers) • Furniture • Transport (business travel, motor vehicles) ‘Local’ priorities can also be added to the above national priorities using a prioritisation matrix

35. ( C ) SP Tool for Procurers to Plan Tenders • Start with Contracts Database??!! • Identify best opportunities using Prioritisation Matrix • Deploy a Sustainable Procurement Tool (under review) to assess contracts against sustainability impacts and to address social, economic and environmental opportunities through the tender process (PQQ, Specifications, Evaluation, Contract Review) • Establish Procurement Plan

36. Prioritisation Matrix High 3 Impact 2 1 Low 1 2 3 Easy Hard Ease of Implementation

37. Tender Process Supplier PQQ(limited opportunities) Steps you could legally take to select more sustainable suppliers • No prosecutions for environmental or H&S breaches in given period • Demonstration of how suppliers could support the Council’s Community Strategy? For service provision on Council sites: • Evidence of environmental and H&S policies and management systems to demonstrate ability to comply with Council standards

38. Tender Process Specifications (best opportunity to design-in sustainability!) • Use specifications to establish minimum acceptable performance • Specify out undesirable features; specify in positive aspects • Always market test your specifications before issuing ITT: - they must be challenging but deliverable & affordable - take care to maintain competition - use supplier briefings & Requests for Information to gauge suitability • If unsure whether a specification is achievable, either - request variations from suppliers - use evaluation criteria to reward performance above & beyond minimum standard

39. Tender Process Specifications (useful short cuts!) • Ecolabels provide a source of best practice specifications (e.g. Nordic Swan, Blue Angel, EU Ecolabel, EnergyStar, FairTrade, Soil Association, FSC Timber, etc) • Whilst you can’t insist on Ecolabel certification, you can demand performance equivalent to their specifications! • Source direct from OGC Buying Solutions “QuickWin Contracts”

40. Tender Process Evaluation: DON’T: • Use evaluation criteria as a substitute for robust specifications • Give sustainability a 10% weighting then forget about it! • Evaluate on “purchase price” alone DO: • State sustainability as a criterion in the OJEU Notice • Reward performance above & beyond specifications • Reward strong “method statements” and credentials • Ensure products are durable & “fit for purpose” • Evaluate on Whole Life Costs

41. Tender Process Contract Monitoring: • Ensure delivered products & services continue to meet your original specification • Monitor quality, performance & durability • Ensure suitable metrics are in place • Use incentives/penalties/caps to encourage good performance - gainshare energy savings with building contractors or energy firms - cap waste costs to encourage waste contractors to minimise waste

42. Sustainable Procurement Website New “SuPro” website to be launched 1st May 2007 as a support tool for Local Authorities across the East Midlands RCE area www.i4learnlive.co.uk/procurement/sustainability/index.asp  

43. IT Products: ‘green’ procurement PCs – Laptops – Monitors – Printers – Photocopiers MFDs – Scanners – Fax machines Key environmental impacts: • Consumption of electricity & resulting CO2 emissions • Damage to human health & the environment caused by certain hazardous substances included, generation of large quantities of waste, emissions of electromagnetic radiation & noise. Approach: • Purchase energy efficient models • Set limits for substances and emissions • Encourage a prolonged lifetime, ensure take-back & recycling at the end of the useful life • Limit packaging & ensure effective training • More innovative approaches (consider thin-client systems)

44. IT Products: ‘green’ procurement Purchase of environmentally friendly PCs (or printers, MFDs, etc. as appropriate) Specifications: All products offered must meet the latest Energy Star standards for energy performance (www.energystar.gov)or equivalent. The Energy Star label will be accepted as proof of compliance, as will reliable technical documentation provided by the supplier that the criteria are met.

45. IT Products: ‘green’ procurement Further ideas: • Limit the use of mercury in monitor backlights • Ensure the long life of your product by requiring long guarantees, the availability of spare parts, and the easy upgradability of machinery • Make sure the product is easy to disassemble and recycle at the end of its useful life • Set limits for electromagnetic emissions • Limit noise emissions • Think about buying a multi-functional device (MFD) which combines several functions (printing, copying, faxing, scanning) in a more efficient way

46. IT Products: ‘green’ procurement Further ideas: • Cut down on the amount of paper and ink your IT products use. Specify that devices are suitable for recycled paper and are equipped with the duplex function. Limit the use of substances such as cadmium, lead, chromium or mercury in ink. Cartridges should also be refillable • Provide simple training to users on how to save energy using their IT devices • Consider switching to a “lean client system”, where processing and programmes are concentrated in one central server

47. Vehicles: ‘green’ procurement Key environmental impacts: • Local health problems caused by particulate matter & ground level ozone • Environmental damage caused by acidification, eutrophication & ground level ozone • Generation of greenhouse gases through consumption of fossil fuels • Noise pollution

48. Vehicles: ‘green’ procurement Approach: • Purchase vehicles with low emissions • Improve efficiency of driving style • Purchase buses with low noise emissions Other approaches to reducing environmental impacts include considering the use of alternative fuels such as biofuels, and considering the disposal of the vehicles at the end of their useful life.

49. Vehicles: ‘green’ procurement Purchase of low emission vehicles Specifications: • Vehicle engines must be certified as meeting the EEV standard for emissions, according to EC Directive 1999/96/EC • All vehicles are to be fitted with driving-style meters to monitor fuel usage • Vehicle noise emissions must not be higher than 75 dB (A) for vehicles with an engine power between 75–150 kW & 77 dB (A) for vehicles with an engine power above 150 kW

50. Cleaning Products:‘green’ procurement Key environmental impacts: • Air pollution, ozone formation (smog), bioaccumulation or food chain exposure and maybe hazardous effects on aquatic organisms due to the use of certain chemicals within cleaning agents. • Negative impact on the occupational health of employees due to the use of certain cleaning agents that contain solvents classified as harmful to health