Sustainable Procurement Principles

1. Sustainable ProcurementPrinciples Shaun McCarthyDirectorAction Sustainability www.actionsustainability.com

2. Welcome Shaun McCarthyAction Sustainability www.actionsustainability.com

3. 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

4. Where were you… 1970s - Safety 1980s – Quality/TQM 2000s – Sustainability 1990s – E.business

5. Where were you… 1970s - Safety 1980s – Quality/TQM Sustainability – The new Rock & Roll? 2000s – Sustainability 1990s – E.business

6. What – Sustainability…? • “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” • Bruntdland Definition

7. What – Sustainability? • Living within environmental limits • 1.8 Global hectares per capita • 2 Tonnes CO2 per capita per year • Living in an equal world • Gini coefficient 0.25 to 0.35 • Ratio of most advantaged to least advantaged

8. Inter-Government Panel on Climate Change • CO2 levels highest for 650,000 years • Climate change “unequivocally” happening • Global temperature will rise between 1.8oC and 4oC in the next century, worst case 6.4oC • In the worst case, Trafalgar Square would be under water

9. Stern Report

10. Stern Report

11. Stern Report

12. Stern Report

13. It’s not just about carbon…! • Resources • If the whole world lived like Western Europe we would need 3 planets resources to sustain life • Inequality • 25% of London’s Black Caribbean community is unemployed compared to 2.5% of the Indian community • 25% of the UK population has a physical or mental disability • 3.8M children were living in poverty in the UK in 2005/6 • Health • UK childhood obesity is increasing at the same rate as the USA, we are breeding a generation that will have a shorter life expectancy than their parents • Average male life expectancy in Tower Hamlets is 7 years shorter than Kensington • Waste • Landfill capacity is likely to be non-existent within 20 years

14. The challenge Source www.nationmaster.com/index.php

15. The challenge Source www.nationmaster.com/index.php

16. The challenge More efficient social housing. Benefit to tenant Fewer people in Fuel poverty More efficient social housing. Cost to developer Fewer people in poor health

17. Virtuous cycle Benefit to society

18. The challenge - to purchasers Download a free copy from our website www.actionsustainability.com Gov response: www.sustainable-development.gov.uk/publications/procurement-action-plan/index.htm

19. The challenge – to purchasers “Using procurement to support wider social, economic and environmental objectives, in ways that offer real long-term benefits”. Sir Neville Simms Chairman Sustainable Procurement Task Force

20. Lead by example Clear policy leadership Integral part of public sector procurement Audit long term value Set clear priorities Clearly defined Local policy Rationalise existing policy tools Raise the bar Knowledge base Engage key markets Set mandatory standards R&D Further work on social impact Build capacity Create delivery team Effective management and information systems Train staff Flexible framework Level 1 by 07, level 3 by 09 Remove barriers Simplified Treasury Guidance Budgeting to support sustainable procurement Efficiency fund Building Schools for the Future programme Address cross departmental cost/benefit Capture Opportunities New technology Task Force Recommendations

21. Clear commitment to meet the challenge laid down by “Procuring the Future”. Implementation is to be part of the personal objectives of senior staff. There is a clear proposition for leadership from the Ministerial Committee on Energy and the Environment through the Defra Minister acting as “Lead Minister” and a Permanent Secretary Champion. OGC have a role to embed sustainable practice into the procurement profession. Flexible Framework receives conditional endorsement. Use is endorsed for now, pending “New Procurement Framework” from OGC and “where it helps to improve procurement practice”. There is no mandatory requirement to apply the Flexible Framework. Environmental impacts only. Climate change mitigation and natural resource protection are the highest priorities. The plan makes reference to targets for energy, water, biodiversity and waste (recycling). There are no specific targets related to recycled materials, environmentally sensitive materials or ethical, social or economic issues. New guidance from Treasury. New Green Book guidance from Treasury is expected to provide greater clarity around environmental appraisal during 2007. Help is at hand (eventually). Defra is tasked with consulting during 2007 with a view to establishing a Centre for Sustainable Procurement Excellence. Reinforcing mandatory standards. Mandatory standards for timber, vehicles and use of “quick win” products are to be implemented. Government response

22. Watchdog role for Sustainable Development Commission. The UK SDC is to have a role in scrutinising departments’ achievement against this agenda in 2008. Focus on key sectors. Particular reference is made to estates, construction projects, capital expenditure, facilities management, IT, energy, travel and vehicles. Clothing, food and health/social care are also referenced in the body of the document. The initial priority is given to the construction sector. Risk management. Departments will be expected to consider reputation risk in their procurement activities. This is referenced in the summary but there is no further expansion of this important subject in the body of the report. EU Myth dispelled? The Introduction sets out the context clearly and helps to dispel the myth that EU procurement rules are a barrier to sustainable procurement Local government response in Summer 07. This response refers to central government departments only, which represents £60Bn of the £150Bn expenditure identified by the Task Force. A local government response is expected in “Summer 2007”. Cross-Department PSAs. The intent to set cross-cutting Public Service Agreements to include sustainability should help to support this agenda. Government response

23. The challenge – Flexible Framework Benchmarking how well you are addressing your sustainability issues against how well others are addressing theirs

24. The challenge – Flexible Framework Procuring the Future Page 68

25. How – Will you know…? Self assessment tool www.actionsustainability.com

26. Why…? Is this somewhere in your supply chain...?

27. Why…? Or this...? Sheep's wool roof insulation Solar panels on German Federal Chancellery Water Cooled Chiller plant. Zero emissions compared to previous CFC versions

28. The Mayors Sustainable Design and Construction Standards 50% timber and timber products from Forest Stewardship Council (FSC) source and balance from a known temperate source. Residential developments to achieve average water use in new dwellings of less than 40m3 per bedspace per year (approximately 110 litres/head/day). Major developments should be zero carbon emission developments (ZEDs) Major developments should make a contribution to London’s hydrogen economy through the adoption of hydrogen and/or fuel cell technologies and infrastructure 90% structural timber from FSC source and the balance of timber products from a known temperate source Residential developments to achieve average water use in new dwellings of less than 25m3 per bedspace per year (approximately 70 litres/head/day) All residential development should be designed to meet wheelchair accessibility standards or be easily adaptable to meet wheelchair standards Incorporation of or access to new waste recovery facilities (anaerobic digestion, pyrolysis/gasification) especially to provide a renewable source of energy eg methane or hydrogen. Wherever outdoor lighting or other electrically powered street furniture is proposed on site, it should be solar powered and minimise light lost to the sky No peat or natural weathered limestone used in buildings or landscaping Before demolition, appraisal of maximising recycling of materials by use of ICE’s Demolition Protocol Use of greywater for all non potable uses For residential development achieve BS 8233:1999 (Table 5) ‘good’ standards for external to internal noise and improve on Building Regulations (2003) Part E for internal sound transmission standards by 5dB (See Ecohomes) Low emission developments that are designed to minimize the air quality impact of plant, vehicles and other sources over the lifetime of the development Use prefabricated and standardized modulation components to minimise waste. If this is not feasible use low waste fabrication techniques Provide facilities to recycle or compost at least 35% of household waste. By 2015 this should rise to 60% Provide facilities to recycle 70% of commercial and industrial waste by 2020.

29. Client Demand • SUSTAINABLE PROCUREMENT • The DELIVERY PARTNER shall develop a Sustainable Procurement Plan to demonstrate how the DELIVERY PARTNER will use best endeavours to carry out the Services in compliance with the Sustainable Procurement • The DELIVERY PARTNER shall, within three months of the date of this Agreement, submit the Sustainable Procurement plan to the Client’s Representative for approval. • The DELIVERY PARTNER shall carry out the Services in accordance with the approved Sustainable Procurement Plan. • The Client may monitor the DELIVERY PARTNER’s compliance with the requirements of this clause and, for the avoidance of doubt, any failure by the DELIVERY PARTNER to comply with such requirements shall be deemed a breach of a material term or condition of this Agreement for the purpose of clause 29.1. Contract clause March 2007, RDA

30. Client Demand • While your team will be very familiar with site waste issues and other site related impacts, most of the solutions for a building come from the design teams. Can you take any credit for this? • How will you ‘educate’ the design team if you see ideas in the scheme that you know are not environmentally effective? • How do you go about reconciling your commercial manager’s desire to complete a building cheaply – which may be at odds with long term cost in use benefits? • How do the buyers in your organisation weight the environmental impact of materials they are buying? For example, if a block cost 10p more per m2 but contained 50% more recycled product. Or how much more could a price be before they decided not to purchase it locally? • We have a finite budget and so cannot achieve everything. How should we go about design the building so that we first achieve maximum reduction to environmental impact for least cost?

31. Clients Marks & Spencer Plan A

32. Why…? It’s about risk…! What lies beneath your supply chain…?

33. Why…?

34. Why..? • Mitigate risk • Meet clients needs • Higher quality clients • Improved margins • Better motivated staff • Improved investor confidence

35. Why…? Future generations will neither excuse or forgive us for ignoring the signals we see today. They will not accept that it is too difficult or too costly to keep our economic aspirations in balance with the impact on the environment and the effect our decisions will inevitably have on society. Sir Neville Simms Chairman Sustainable Procurement Task Force

36. Key Milestones Training needs analysis Tailor training material Deliver training Initial client discussion Proposal Define process requirements Develop processes & tools Implement processes & tools Initial training FF evaluation Workshop to define impacts , risks & plan Consult on impacts Finalise impact definition Supplier communication event Implement supplier group Report & recommendations Identify competitive advantage Develop products Implement products Report & recommendations Workshop to define measures Develop measures Implement measures & review

37. The good news • Sweden – biofuel vehicles • Manchester City – shirts made in Manchester • DEFRA – travel contract • M&S - Plan A • B&Q – product life cycle • IKEA – local sustainable policy following bad press in Germany

38. The bad news • Government target 100% BREEAM Excellent buildings – 17% achieved • MOD measured on how much recycled paper it buys • “We have no recollection of being asked to address the water saving target” Major contractor to government • Car manufacturer in the Midlands buying all it’s sandwiches from East Kilbride

39. Barriers… • Minimum standards • Won’t work on their own • Can measure the wrong things • Unlikely to be complied with • Government “Quick Wins” list not seen as mandatory • Buying responsibly is not enough • To be leading edge we must change markets

40. Barriers… • Beware “Greenwash” • UK Green Tariff energy • Just a certificate for your wall • Makes no difference to the environment

41. Where – To get help…? • www.actionsustainability.com • www.bitc.org.uk • www.iema.net • www.cips.org • www.lsx.org.uk • www.forumforthefuture.org • www.wrap.org • www.envirowise.gov.uk • www.londomremade.com • www.egeneration.co.uk • www.thecarbontrust.cu.uk • www.business-business.co.uk • www.ipfprocurement.net • www.sedex.org.uk

42. The future… • How much longer will it be acceptable for organisations to: • Grow their business and increase greenhouse emissions? • Deplete natural resources in construction and operations? • Send waste to landfill? • Buy from organisations with poor human rights practices?

43. Thank You Shaun McCarthyAction Sustainability www.actionsustainability.com