Sustainable Procurement
What is sustainable procurement?
Sustainable procurement involves considering environmental and social principles at every stage of the procurement process: from justifying the need, specifying innovation, to supplier development. In its 2005 Sustainable Development Strategy, the UK Government set out the ambitious goal of making the UK a leader in sustainable procurement in the EU by 2009, recognising that this was an important step in moving towards a more sustainable economy.
The UK has already put into place several mechanisms to increase the sustainability of Government procurement, including targets for individual departments and local authorities. Although, not governed by the public sector targets, some private sector companies have recognised that there are economic benefits to be gained from responsible procurement. Organisations that lag behind are at risk of impacts to both their reputation and their bottom line.
What is sustainable procurement?
Sustainable procurement is a precautionary approach to managing impacts of a product or service over the whole life cycle. It involves procuring necessary products and services with minimal environmental and social impact, whilst securing value for money and good quality over the whole life of the product and service. Environmental and social principles must be considered at every stage of the procurement process: from justifying the need, to specifying innovation, to supplier development.
How is the public sector leading the way?
In its 2005 Sustainable Development Strategy, the UK Government set out the ambitious goal of making the UK a leader in sustainable procurement in the EU by 2009, recognising that this was an important step in moving towards a more sustainable economy. The UK has already put into place several mechanisms to increase the sustainability of Government procurement, including targets for individual departments and local authorities.
The scale of public sector spend on goods, services, works and utilities, £150million a year on goods and services in the UK, is capable of stimulating the market for more sustainable goods and services. Furthermore, public sector leadership could help shift the consumption patterns of business and consumers.
What is the private sector doing?
Conversely, there are currently no obligations on the private sector to procure more sustainably. Those companies that are leading in sustainable procurement and have demonstrated good procurement practices are driven mainly by cost efficiency and savings, ‘self-motivation, enlightened leadership or shareholder pressure. B&Q, for example, was prompted several years ago by a journalist enquiry into the source of their tropical timber. Recognising that customers would expect to be provided with this information, B&Q formed a partnership with WWF to work towards the establishment of an independent organisation.
The Forest Stewardship Council (FSC) grew out of this project, and is now able to provide the type of independent assessment sought by many customers and procurement managers. About 75 per cent of B&Q timber products now carry FSC approval, with remaining suppliers either working towards this certification with B&Q's assistance, or operating under other certification schemes appropriate to specific timber types.
As the sustainable procurement agenda gains momentum, businesses that have not yet embraced sustainable procurement principles may find that their reputation and profitability suffer.
How can I drive sustainable procurement within my own organisation?
There are several steps that an organisation can take to begin the journey towards sustainable procurement.
Step 1: assess how your organisation is currently performing in relation to the Flexible Framework. This is a matrix of key behavioural and operational change programmes against which progress can be measured. (The Framework was developed by the UK Government’s business-led Sustainable Procurement Task Force)
Step 2: analyse expenditure and identify the areas of greatest spend. Identify the sustainability impacts and risks associated with those goods and services. This risk-based approach allows organisation to prioritise high-risk areas and target quick wins.
Step 3: build capacity for sustainable procurement practices within your organisation. To attain higher levels of performance, sustainable procurement principles must be integrated into company policy. There must be capacity and expertise within your organisation to enable this to happen, therefore strong leadership and engagement with suppliers throughout is essential.
In all cases, with respect to sustainable procurement, a decision hierarchy similar to that used for waste should be applied which takes into account the following considerations in order: 1 being the most favourable and 4 being the least favourable. 4 should only be implemented after all other options have been considered.
1) Rethink the need for the good or service;
2) Reduce or use less of the good or service;
3) Re-use the good or service;
4) Recycle the good or service.
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