Sustainable procurement

1. Sustainable procurement Train the Trainer Jimmy Brannigan

2. EAF Programme • Background • Three year project • Reducing negative environmental and social impacts through purchasing • Steering group, partners from Further Education and Higher Education • Training • Train the trainer • Policy and strategy development • Risk based approach to procurement • Supplier engagement • Social issues in procurement

3. Sustainable procurement Agenda 09.00 Registration 09.30 Introductions and objectives 10.00 What is sustainable procurement? 10.20 Barriers to sustainable procurement 10.45 Break 11.00 The business case – Presentations 12.00 Networking Lunch

4. Sustainable procurement 12.45 Where are the opportunities? Review the latest guidance on implementing sustainable procurement 14.15 Break 14.30 What can we do now? How can we use the latest guidance on implementing sustainable procurement?

5. Sustainable procurement 15.15 Report back and prioritisation – Including communication styles 15.45 Action planning 16.00 Close

6. Style of the day • Challenging • Practical • Dialogue based • Interactive

7. Objectives • Develop a shared understanding of what we mean by sustainable procurement • Develop a thorough understanding of the business case for sustainable procurement • Support participants communicate sustainable procurement to key players within their organisation

8. Objectives • Develop participants confidence when implementing sustainable procurement within their institution • Introduce participants to the latest guidance materials and support when implementing sustainable procurement

9. Introductions • Briefly • You and your organisation • Why you are here

10. What is sustainable development?

11. What is sustainable procurement? Definition for a non procurement professional

12. Definition “Sustainable purchasing is all about taking environmental and social factors into account in purchasing decisions. It’s about looking at what your products are made of, where they come from and who has made them” HEPS Sustainable Purchasing Guidance – Section 1

13. Definition “Sustainability in the supply chain is fundamentally about identifying problematic social, environmental and H&S issues throughout the supply chain. Assessing their impact and risks, and then trying to improve them” www.nordicpartnership.org

14. What are the barriers to sustainable procurement within your institution?

15. Barriers to Sustainable ProcurementNational Audit Office • Whist there is a high level of commitment to national targets; there is often a low level of understanding of the exact requirements, therefore creating an ‘implementation gap’ – the gap between policy and practice. • Even with a high level commitment in the shape of policies and specific targets, this becomes heavily diluted by the time it reaches the Procurement Departments. A lot of the sustainability issues are lost and replaced instead by ‘best value’ often easily translated to cheapest price. • The link needs to be made between sustainability, efficiency and cost savings.

16. Barriers to Sustainable ProcurementNational Audit Office • Procurement staff are often not trained in sustainability issues and do not understand how to achieve the targets. It is often the case that the will to procure in a sustainable manner is strong, yet the procurement teams are unable to complete the task. This often includes a basic misunderstanding of the term ‘sustainable procurement’. • Lack of knowledge in this area has often resulted of the seeming lack of understanding of the role of sustainability in risk assessments.

17. Barriers to Sustainable ProcurementNational Audit Office • In Summary • Lack of sustainable procurement training and guidance • Poor understanding of targets and requirements • Taking a short term view.

18. Presenting the business case Presentations

19. Presenting the business case • Read through the summary document of all of the reasons and explanations as to why this is a good thing ‘the business case’ and prepare 8 minute presentation to convince one of the following • Finance manager • Devolved purchaser • Estates manger / project manager construction project • A student

20. Presenting the business case De-brief

21. The business case – why do it? Employee expectations Stakeholder demands Benchmarking Customer requirements Risk management Legislation & Standards Business efficiencies Impact Reduction (environmental)

22. Current management focus Impacts and Opportunities (Environment) High Environmental Footprint Natural Resources Transportation Manufacturing Product Distribution Consumers Low Supply Chain

23. Current management focus Current Management Effort (Environment) High Environmental Footprint Natural Resources Transportation Manufacturing Product Distribution Consumers Low Supply Chain

24. Current management focus Mismatch between the two High Environmental Footprint Natural Resources Transportation Manufacturing Product Distribution Consumers Low Supply Chain

25. Where are the opportunities? Review of the latest guidance

26. Review of the latest guidance • What guidance exists? • What does it say? • How do you use it?

27. Review of the latest guidance • What guidance exists? • Sustainability and Local Government Procurement November 2003 - IDeA • Environmental Purchasing in Practice September 2002 – iema • HEPS Purchasing for Sustainability: Guidance for Higher Education Institutions – Forum for the Future • Procuring the future

28. Review of the latest guidance • What guidance exists? • Develop Ethical Purchasing Practice, 2001 – CIPS • The ethical decisions – An executive guide to corporate social responsibility, 2004 – CIPS • Social issues in purchasing, February 2006 – Office of Government Commerce

29. Review of the latest guidance • What does it say? • Understanding of the environmental and social impacts • Risk based approach • Opportunities throughout the procurement process • Identification of need • Specification • Supplier selection • Evaluating tenders • Contract management and supplier development

30. How do you use it?

31. Identifying need • What do we want to buy? • Why do we need this product or service? • Can the need be met another way? • Is a suitable product available elsewhere in the institution? • Can the requirement be met by renting, sharing rather than purchasing? • Is the quantity requested essential? • Is the specification currently used the correct one for the purpose? • Can the product serve a useful purpose after its initial use?

32. Identifying need • Challenge repeat purchases! • Important as it can free up thinking to look for more sustainable options • The more ambitious the environmental objective the more fundamental the re-examination needs to be • Good purchasing practice requires fundamental questions are routinely asked about the value being delivered

33. Reduce Replace Re-use Recycle and return Identifying need Re-think Copyright Barbara Morton Increasing order of Priority

34. What are the impacts? • In groups identify the environmental impacts and the social considerations related to the goods or service being purchased • Moves • IT

35. What are the impacts? • This exercise is an essential part of the process • Can been done as an individual but is better in small groups • Encourage devolved purchasers do this with colleagues / environmental professionals • This can feed into specification, award criteria, tender evaluation, supplier appraisal

36. The specification • Defined as a “statement of needs to be satisfied by the procurement of external resources” Or • What the purchaser wishes to buy and what the supplier is expected to supply

37. The specification • As discussed in ‘Modern Procurement Practice’ 3 types of specification are generally used • Functional – defines function and duty of the product or service • Performance – defines performance (output specification) • Technical – physical characteristics on an item

38. The specification • By placing the emphasis on the functional and performance based specifications this provides an opportunity for the supply market to innovate including reducing environmental and social impact • Also key as this indicates to suppliers that environmental and social considerations are important to the client

39. The specification • Fitness for purpose and value for money • Resource, energy and water efficiency • Minimum use of virgin and non-renewable materials • Maximum use of post consumer materials • Non (or reduced) polluting with minimum use of toxic chemicals, CFC’c ozone and other pollutants

40. The specification • Maximum durability, reparability, reusability, recyclability and upgradability • Minimum packaging • Design for disassembly • Fault controls to prevent unnecessary waste • Health and safety standards • Biodegradability

41. The specification • Eco-labels • Used by supplier to demonstrate the environmental credentials of goods and services • Widely recognised and on the whole very robust • DEFRA’s Green Claims Code is a good source of advice on misleading labels • Achieving the standard can be costly and time consuming

42. ECO-labels

43. The specification • Under the procurement regulations you can use eco-label criteria to help determine environmental specifications • Can accept eco-labels as proof of compliance – but other proof must also be accepted • You cannot stipulate that products must have an eco-label certificate • ICLEI guide recommends you always add the words ‘or similar requirements’ and attach the criteria of the relevant eco-label

44. Supplier selection • Pre-qualification • Vetting potential suppliers of goods and services to ensure they meet the required standard • Environmental Management Systems – if relevant to the subject matter of the contract • A simple starting point is to include environmental and social considerations as part of the process • Policy’s in place / management commitment • H&S record • Environmental incidents

45. Supplier selection • Supplier appraisal • Used to assess the suppliers environmental and social impacts • More important for high risk goods or services or on strategically important contracts

46. Supplier selection • Using questionnaires • They are a familiar tool • Can be cost effective way of gathering information • Can produce a lot of data quickly • Can be used at pre-contract to influence the tendering process or post contract as part of contract management

47. Supplier selection What are the potential pitfalls of questionnaires? Exercise

48. Sphere of Control Sphere of concern Sphere of influence Sphere of control

49. Tender evaluation • Opportunity to incorporate your priorities into tender for goods and services • Helps integrate into an essential part of business operations • Need to set out contract award criteria at an early stage • Opportunity to apply weighting to environmental criteria • Award criteria must be linked to the subject matter of the contract

50. Contract management • What can you do? • Set target related to your own organisational objectives and relevant to the contract – KPI’s • Encourage innovation around reducing environmental and social impacts • This sends out a clear message to the market that this is on the agenda and will develop further • Use past performance in award of new contracts • Discuss alternative products & services with suppliers