Sustainable Procurement Principles

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Sustainable ProcurementPrinciples
Shaun McCarthyDirectorAction Sustainability
www.actionsustainability.com
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Welcome
Shaun McCarthyAction Sustainability
www.actionsustainability.com
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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
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Where were you
1970s - Safety
1980s Quality/TQM
2000s Sustainability
1990s E.business
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Where were you
1970s - Safety
1980s Quality/TQM
Sustainability The new Rock Roll?
2000s Sustainability
1990s E.business
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What Sustainability?

• Development that meets the needs of the present
  without compromising the ability of future
  generations to meet their own needs
• Bruntdland Definition

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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

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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

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Stern Report
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Stern Report
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Stern Report
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Stern Report
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Its 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 Londons 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

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The challenge
Source www.nationmaster.com/index.php
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The challenge
Source www.nationmaster.com/index.php
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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
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Virtuous cycle
Benefit to society
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The challenge - to purchasers
Download a free copy from our website www.actions
ustainability.com Gov response www.sustainable-
development.gov.uk/publications/procurement-action
-plan/index.htm
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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
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Task Force Recommendations

• 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
• RD
• 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

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Government response

• 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.

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Government response

• 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.

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The challenge Flexible Framework
Benchmarking how well you are addressing your
sustainability issues against how well others are
addressing theirs
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The challenge Flexible Framework
Procuring the Future Page 68
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How Will you know?
Self assessment tool www.actionsustainability.com

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Why?
Is this somewhere in your supply chain...?
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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
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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 Londons 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 ICEs Demolition Protocol Use of greywater
for all non potable uses For residential
development achieve BS 82331999 (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.
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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 Clients
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 PARTNERs 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
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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 managers 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?
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Clients
Marks Spencer Plan A
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Why?
Its about risk!
What lies beneath your supply chain?
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Why?
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Why..?

• Mitigate risk
• Meet clients needs
• Higher quality clients
• Improved margins
• Better motivated staff
• Improved investor confidence

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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
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Key Milestones
Training needs analysis
Tailor training material
Deliver training
Initial client discussion
Proposal
Define process requirements
Develop processes tools
Implement processes tools
Workshop to define impacts , risks plan
Consult on impacts
Finalise impact definition
FF evaluation
Initial training
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
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The good news

• Sweden biofuel vehicles
• Manchester City shirts made in Manchester
• DEFRA travel contract
• MS - Plan A
• BQ product life cycle
• IKEA local sustainable policy following bad
  press in Germany

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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 its
  sandwiches from East Kilbride

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Barriers

• Minimum standards
• Wont 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

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Barriers

• Beware Greenwash
• UK Green Tariff energy
• Just a certificate for your wall
• Makes no difference to the environment

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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

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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?

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Thank You
Shaun McCarthyAction Sustainability
www.actionsustainability.com