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August 12, 2022

August 12, 2022

Making sustainable procurement a reality

Sustainable public procurement has never been more of a priority. In this blog, we dive into the challenges councils face in implementing it. We also outline some of the key steps councils can take to ensure sustainability is embedded in every step of the procurement process.

Public procurement represents $13 trillion (USD) of global public spend and 15% of global GHG emissions. It is a hugely significant lever for making our economies more sustainable, innovative, and inclusive.

This implies that the job of the modern-day procurement or commercial team has never been so important — or complex. Not only do they need to deliver high-quality goods and services for the best possible price, but they also need to be at the forefront of an authority’s longer-term sustainability goals. 

That’s why we at PUBLIC have been doubling down on our efforts to help public authorities tackle this challenge and make sustainable procurement a reality. And by ‘more sustainably’, we mean delivering on concrete environmental, economic, and social outcomes. 

This includes our recent work with the Open Contracting Partnership (OCP). We assessed best practice from around the world and constructed a toolkit for  organisations that want to successfully implement sustainable public procurement (SPP). Our toolkit is being used by commercial teams around the world. It can further provide inspiration, case studies, templates and step-by-step guides for governments starting their sustainable procurement journey. 

Below, we outline some of our key insights from helping authorities to procure more sustainably, with a particular focus on the challenges — and opportunities ahead — for UK public authorities.

The challenge — and opportunities — for authorities in the UK

The changing policy landscape in the UK emphasises SPP. Procurement notes like PPN 06/20, PPN 06/21, WPPN 12/21 stress the weight of sustainability criteria in public contracts. The UK’s commitments to achieving Net Zero have created urgency for councils to review and improve their processes. 

Reflecting this, over 75% of the UK’s councils have declared climate emergencies, and 182 have made commitments to Net Zero by 2025-2030. The opportunity for councils to meet targets by leveraging supply chains is enormous: almost 96% of a council’s Scope 3 emissions comes from a council’s supply chain. 

SPP has been made even more important by the Social Value Act. Many authorities have policies or strategies aimed to support local economic growth, promote diversity and inclusion, and deliver on other broader sustainability outcomes. It is possible for councils to unlock the opportunities SPP brings: look at Wales’ Social Partnership and Public Procurement Bill. It is a great example of the scale of some authorities’ ambition to drive sustainability and social value in all areas of their procurement strategy.

So, the direction of travel at the policy level is clear: authorities in the UK need to develop tools and processes to make these strategic commitments a reality. Fortunately, there are steps forward. Here are 7 of PUBLIC’s key principles to help authorities get started with sustainable procurement. 

Key steps to embed sustainability in procurement 

We’ve surveyed hundreds of national and local governments in their attempts to establish sustainable procurement approaches, and have identified some key principles for success. That said, every authority’s sustainability journey is different. While there is no simple one-size-fits-all guide to procuring sustainably, we would recommend the following 7 key steps as a good place to start.

  1. Understanding where you are: The first stage of your sustainable procurement journey is usually taking stock of your current processes, capabilities, and resources to get a clear picture of sustainability ‘as-is’. This includes conducting high-level sustainability assessments for live and pipeline contracts and suppliers, capabilities assessments for procurement teams, and evaluating existing SPP processes and available resources (e.g. procurement systems, internal workflows, guidance for how to assess Carbon Reduction Plans etc.). Keep an eye out for the provisions for sustainability in your existing contracts, frameworks and catalogues!
  1. Establishing sustainability goals & identifying priority categories: Having gathered insights into the sustainability status quo of your organisation, you then need to identify specific sustainability priorities and objectives. This includes mapping the policies and regulations affecting your procurement processes, engaging with stakeholders, and identifying priority procurement categories. Categories could be prioritised according to strategic value, sustainability impact, and spend based on the goals identified. Take a look at our guidance on SPP in the construction and IT sectors — they are usually top-priority categories. 
  1. Developing an action plan: Based on insights from your internal diagnosis above, an action plan should be developed. The plan should include a well-defined governance structure and distribution of responsibilities. This can be based on organisational capacity, budgetary needs, and evidence for business cases. It can also include details of the resources needed to support your procurement team and suppliers in meeting sustainability requirements. The plan should incorporate clear targets and metrics to ensure progress and success are measured consistently. It is also absolutely key to set out how you can reach those targets. This can be done by using a clear M&E framework to capture and measure data on sustainability performance. Your organisation should pay due attention to how data can be collected from e-tendering, contract management, ERP or financial management systems. It can’t just live in siloed spreadsheets — it has to be joined up to core business-as-usual data reporting.
  1. Collaborating with your suppliers: To be effective, SPP must be a collaborative effort. This means working with your suppliers to understand where they are. To do so, you can set requirements, including ecolabels and standards, that meet market capability, especially when engaging with MSMEs and local businesses. It is essential to provide guidance to suppliers to ensure they can meet sustainability requirements and to establish ways of working with them to embed SPP. Check out Hackney Council’s Green Business Programme to see how councils can support small businesses in reducing their carbon footprint. 
  1. Measuring: To bolster your SPP implementation, you can set up methods to track progress, adapt to feedback, and quantify success. The data collection and reporting methods put in place should enable your team to capture meaningful sustainability data and use it for iterative improvements. This could include the use of innovative sustainability and e-Procurement tools like Ignite or Responsibly across the supply chain. 
  1. Embedding sustainability into evaluation processes: It is useful to develop a standard approach for embedding sustainability into contract evaluation processes. This saves time, and ensures that sustainability requirements are consistent and comprehensive across agreements. Some methods to do this include creating a bank of contract templates and standardised category-specific tender criteria to incorporate into every contract, such as enhanced sustainability requirements or certifications. Developing a life-cycle costing tool is usually a big help here. 
  1. Training: After assessing your procurement team’s and suppliers’ capabilities, it is useful to develop training and guidance materials to help build or expand SPP-relevant skills. For suppliers, training could include sustainability workshops to help suppliers measure and reduce Scope 3 emissions. For procurement teams, training could encompass SPP-specific topics like how to conduct life-cycle costing assessments, how to assess supplier Carbon Reduction Plans, and how to measure and report Scope 3 emissions, social value requirements, etc. Upskilling your procurement team ensures that SPP is embedded in procurement workflows. 

Each of these steps should be adapted according to your organisational context, but we believe that they provide a solid foundation for structuring your organisation’s SPP initiatives.

How can PUBLIC help?

Sustainable procurement is not easy. Getting it right requires the right balance of sustainability and commercial expertise. At PUBLIC, we can help you achieve that balance. PUBLIC supports authorities in making the procurement lifecycle more sustainable. We can: 

  • Assess and measure your current performance against multiple sustainability metrics
  • Help you to create your first ever sustainable procurement action plan
  • Create lists of sustainable suppliers and partners
  • Embed life-cycle costing and evaluation approaches into your tendering processes
  • Develop new digital tooling and data collection techniques 
  • Benchmark your performance against local and international comparators.

Some of this guidance for implementing SPP is available on the toolkit we introduced above. If you need help taking the next step, or want our advice as you embark on your SPP journey, get in touch with Leyre (leyre@public.io) and Radhika (radhika@public.io).

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Leyre Villaizan

Associate

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