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Delivering Sustainable Procurement

Delivering Sustainable Procurement. Barbara Morton Director – A ction Sustainability. National Sustainable Procurement Conference 26 March 2008. Outline. Sustainable procurement in the public sector Does the public sector have a right to procure unsustainably?

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Delivering Sustainable Procurement

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  1. Delivering Sustainable Procurement Barbara MortonDirector – Action Sustainability National Sustainable Procurement Conference26 March 2008

  2. Outline • Sustainable procurement in the public sector • Does the public sector have a right to procure unsustainably? • Business case for sustainable procurement • Priorities and building blocks • What’s happening – and what’s not?

  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. What – Sustainable Procurement…? “Sustainable Procurement is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment”. Footnote: Sustainable Procurement should consider the environmental, social and economic consequences of: Design; non-renewable material use; manufacture and production methods; logistics; service delivery; use; operation; maintenance; reuse; recycling options; disposal; and suppliers' capabilities to address these consequences throughout the supply chain.” Procuring the Future – June 2006

  5. What – Sustainable Procurement…? Economic Environmental Social

  6. Who is interested and why? • Sustainable Development Commission in ‘watchdog’ role • National Audit Office, Audit Commission and Healthcare Commission • Permanent Secretaries • Sustainable Procurement & Operations Board • Monitoring, measuring, benchmarking

  7. Business Case for Sustainable Procurement • Delivering on government SD objectives • £150 billion per annum • Against background of: • Transforming Government Procurement • Capability reviews • Sustainable Procurement is good procurement • Efficiency and sustainability in same package

  8. UK Sustainable Procurement Action Plan • Central government March 2007 • Clear priorities: • Climate change mitigation • Carbon neutral by 2012 • Natural resource protection • Biodiversity • Illegal logging and sustainable timber • Consult on need for ‘centre of sustainable procurement excellence’

  9. UK Sustainable Procurement Action Plan • Government supply chains and public services that are increasingly: • Low carbon • Low waste • Water efficient • Which respect biodiversity and deliver our sustainable development objectives • Defra-sponsored SP workshops for OGDs now being delivered

  10. What? Sustainable Operations Targets Carbon • Government office estate carbon neutral by 2012. • Carbon emissionsdown 12.5% by 2010 (30% by 2020). • Carbon emissions from vehicles down 15% by 2010/11 Waste • Waste arisings down 5% by 2010 (25% by 2020). • Waste recycled up40% by 2010 (75% by 2020). Energy • Energy efficiency/m2up 15% by 2010 (30% by 2020). • 10% of electricity from renewables by 31 March 2008 • 15% of electricity from CHP by 2010 Water • Water consumptiondown 25% by 2020.

  11. Local Government & Health Care responses • Local Government Sustainable Procurement Strategy – November 2007 • Audit Commission role • Health and social care sector response: Procuring for health and sustainability 2012 – sustainable procurement action plan

  12. Business Case for Sustainable Procurement • Local government • £40 billion per annum • Sustainable Community Strategies • Commissioning • Comprehensive Area Assessment • Valuing socio-economic benefits • Local economic regeneration • Third sector, SMEs and local suppliers

  13. How? Delivering sustainability through procurement • 2 Building Blocks of SPTF • Flexible Framework • Prioritisation Methodology • Risk-based • Helps focus resources • Integrating sustainability throughout the procurement process

  14. Flexible Framework Lead Enhance Practice Ambition Embed Foundation Time

  15. Flexible Framework • People • Policy, strategy and communications • Procurement process • Engaging suppliers • Measurement and results

  16. Priority areas • Construction • Health and Social Work • Food • Uniforms, clothing and other textiles • Waste • Pulp, paper and printing • Energy • Consumables – office machinery and computers • Furniture • Transport

  17. Secure Critical Acquisition Cost Driven Prioritise Action - Risk and Spend Risk Spend >0.5%

  18. Quick Win Transform Marginal Campaign Buyer Approach - Scope and Risk Scope Risk

  19. Challenge Pioneer Encourage Research & Development Market Engagement Strategy - Scope and influence Scope Influence

  20. Supplier qualification and appraisal Identification of need Specification Accounting: whole life costing Contract management and review Tendering and tenderevaluation The Procurement Process Environmental Purchasing in Practice CIPS/IEMA/CIPS 2002

  21. How? Challenging the need • Influencing behaviours of internal customers • Budget-holders, users, ‘front line’ • Demand management: – influencing the £150 billion per annum at start of process • New capabilities required = challenging • Informed dialogue with key markets

  22. The procurement process Supplier qualification and appraisal Identification of need Specification Accounting: whole life costing Contract management and review Tendering and tenderevaluation

  23. Accounting and budgeting practice • Engaging finance directors and senior management • Whole life costing • To what extent is it applied in practice? • Westminster Sustainable Business Forum – Whole Life Costing and Sustainable Procurement study • Call for evidence • High upfront capital costs • see UK SPAP ‘invitation’

  24. Page 21 paragraph 6.7 • “…sponsoring Departments will review budgeting arrangements and performance frameworks to ensure any barriers to choosing sustainable solutions are resolved. • In addition, where Departments believe an upfront cost constraint prevents them from choosing the most sustainable option, they may raise this with HMT.”

  25. What’s happening - and what’s not? • Building capacity – • SP training for other government departments – sponsored by Defra • Local Government Learning Networks • Wakefield & Sefton • Websites and ‘cupboards’ • National Improvement and Efficiency Strategy • Role of RIEPs? • On their agenda?

  26. What’s happening - and what’s not? • Re-defining value for money • Wider interpretation • Valuing socio-economic benefits • Emerging agenda for scrutiny bodies • NAO reports demonstrate lack of progress • Sustainability embedded into procurement practice? • Opportunity for procurement to be recognised • Delivering corporate objectives

  27. Thank you for your attention Barbara MortonAction Sustainability www.actionsustainability.com barbm110@aol.com Mobile: 07766 023560

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