Sustainable Procurement Key Tools and Tips!

1. Sustainable Procurement Key Tools and Tips! Ian Barham, Defra, Sustainable Public Procurement EAUC March 2012

2. Why embed sustainable procurement? There are a number of reasons, or drivers, why organisations should consider embedding sustainability into its procurement processes, policy and decision making. RISK MANAGEMENT SAVINGS While all 5 factors are important reasons for embedding sustainability into the procurement process... Risk Management, Savings, and Stakeholder Goodwill represent consistent, long term drivers, particular in the context of efficiency reform STAKEHOLDER GOODWILL MARKETING OPPORTUNITIES GOOD PROCUREMENT

3. Why embed sustainable procurement? • PWC recently published report “Value of Sustainable Procurement Practices” estimated that the potential implementation cost of a sustainable procurement programme is about 0.01% of a company’s revenue and that it can for example achieve up to: • 58 times payback from additional revenue • 6 times payback from using less resources and reducing costs • 85 times payback from reduced risks • Link: http://www.pwc.com/gx/en/operations-consulting-services/publications/value-sustainable-procurement-practices.jhtml

4. Embedding Sustainability in an Organisation • Review your procurement policy • Adopt a strategic approach to procurement (board, level etc) • Adopt a category management approach & aggregate volumes • Procurement/Commissioners/Suppliers – Re-think, reduce demand • Where you have to buy - buy sustainable goods and services, consider end of use– use Government Buying Standards! • Work with suppliers to reduce costs and carbon • Make sure that procurers are qualified

5. Benefits of working across organisations By the time the procurement team are asked to buy the materials, 80% of the sustainable procurement opportunities in the average construction contract have been missed!

6. Key Tools Available Defra sponsor a range of tools that will help you to develop and implement sustainable procurement within your organisation. Prioritisation methodology Government Buying Standards (GBS)

7. Prioritisation Methodology • Spend 1 • This is Risk and Opportunity Based • Helps focus resources • Helps to integrate sustainability throughout the procurement process • This is an essential first step when deciding which are the most important categories or product groups to focus on.

8. Prioritisation Methodology • Spend 1 The SP Prioritisation methodology (which is available from http://sd.defra.gov.uk/advice/public/nsppp/prioritisation-tool/)starts by identifying the amount of spend per category. The detail below shows the spend input page within this tool:

9. Spend Prioritisation Methodology 1 • Environmental risks 2 • This is Risk and Opportunity Based • Helps focus resources • Helps to integrate sustainability throughout the procurement process • Socio-economic risks 3 • Risk (other) • Level of existing activity, • Scope to do more, • Reputational risk 4 • Overall risk 1) Accessibility 2) Equality Groups Needs   3) Cultural 4) Appropriate Communication 5) Poverty

10. Spend Prioritisation Methodology 1 • Environmental risks 2 • The spend data by category is then correlated with an assessment of environmental and social risks and opportunities. • In addition existing organisational activity to address the sustainability risks, the scope to do more and the potential impact on the organisation’s reputation are taken into account to assess the overall risk. • Socio-economic risks 3 • Risk (other) • Level of existing activity, • Scope to do more, • Reputational risk 4 • Overall risk • Scope to do more 5 • Influence over the market 6 • Outputs: graphs • Once the overall risk is determined: • the Scope to do more to mitigate this risk is considered in more detail, as well as • the organisation’s Influence over the market. M

11. National Sustainable Public Procurement Training Programme Secure Critical Acquisition Cost Driven Prioritise Action - Risk and Spend Risk Spend

12. National Sustainable Public Procurement Training Programme Quick Win Transform Marginal Campaign Buyer Approach - Scope and Risk Scope Risk

13. National Sustainable Public Procurement Training Programme Challenge Pioneer Encourage Research & Development Market Engagement Strategy - Scope and influence Scope Influence

14. Government Buying Standards • Cleaning products • Construction – covering new builds and refurbishments and a range of construction products • Electrical goods – such as TVs and ovens • Food • Furniture • Horticulture and parks services • Office ICT equipment – computers, printers, scanners etc • Paper and paper products • Textiles • Transport

15. Government Buying Standards But why would a procurer bother to use the GBS????? Government Buying Standards are designed to make it easier for public sector buyers to buy sustainably For more information on GBS see http://sd.defra.gov.uk/advice/public/buying

16. Government Buying Standards – Robust EU GPP Criteria Technical Expertise Producers & Suppliers X Government Procurement Specialists Broad supplier and trade body review

17. Government Buying Standards Barrier - Legal Legal advice Compliance with the EU Procurement Directives

18. Government Buying Standards Barrrier – VFM? Cost/Benefit Analysis • The UK are the only country in the EU to carry out a full CBA on sustainable procurement specifications. We: • Market assessment • Gathering of evidence and analysis • Quantification of costs and benefits over life

19. Government Buying Standards • Furniture: £40m • Food: £39m • Imaging: £46m • IT: £27m • Water Using Products: £4m • Transport: £7m

20. Government Buying Standards Procurer’s Note • Gives procurer’s the understanding to discuss the specifications with suppliers. • Explains what the criteria mean • How information on the criteria can be gathered • How verification can be achieved

21. Case Study – GBS for Furniture • Aligned with EU GPP, including components and spare parts available for at least 5 years after sale • Furniture to be eco-designed • Government departments and their agencies are encouraged to re-use 5% of the office furniture and 10% of the domestic/residential items. • Re-manufacturing

22. Case Study – GBS for Furniture

23. What do I use?

24. Further information Ian BarhamSustainable procurement policy and standards Area 5c, Ergon House, Defra London SW1P 2AL Ian.barham@defra.gsi.gov.uk Government Buying Standards http://www.defra.gov.uk/sustainable/government/advice/public/buying/index.htm

25. Your next steps – making the most of your EAUC Membership… • Resources - visit the dedicated sustainable procurement section on the EAUC resource bank • Training - want learn more - book onto our EAUC sustainable procurement levels 1 and 2 CPD event (April, London) • Recognition - want recognition for embedding a sustainable procurement process - enter the 2012 Green Gown Awards sustainable procurement category. Entries open summer 2012 • Measure and improve - sign up to LiFE- www.thelifeindex.org.uk. EAUC Members receive a significant discount • LiFE offers a dedicated ‘procurement and supplier engagement’ framework Membership matters at www.eauc.org.uk