How to build sustainability into procurement: staying on track for carbon net zero Procurement Essentials

From: Crown Commercial Service
Published: Thu Feb 02 2023

Procurement Essentials is a new series of articles to help you overcome common hurdles, understand key concepts, and make your life as a buyer of everyday goods and services easier.

Building sustainability into your procurements is crucial in order to meet the 2050 net zero target set by Government. To get it right, you need to start thinking as early as possible about how to apply it to what you are buying.

What is sustainable procurement and why does it matter?

Sustainable procurement considers social, economic and environmental factors alongside the usual price and quality considerations when buying goods and services.

A sustainable procurement strategy reaches every corner of your supply chain, from sourcing and suppliers to materials and workers. Some examples of sustainable procurement include:

  • purchasing electricity from renewable sources
  • using energy efficient technologies such as LED lighting
  • changing fleet vehicles to ultra-low emission vehicles (ULEV) or electric vehicles (EV)
  • using low carbon construction materials

As sustainability continues to grow in significance on the global agenda, it's becoming increasingly important for public sector organisations to align their procurement strategy with the evolving values of stakeholders, customers and employees.

Before you start any procurement, you should think carefully about whether the goods or services you're going to buy, and the way you are going to buy them, will secure sustainability benefits.

Why procure sustainably?

Sustainable procurement adds value to your organisation through improved reputation and future proofing against compliance issues and supply chain risk. It can also decrease costs through, for example, reducing waste and energy consumption.

Not adopting sustainable procurement practices could have negative consequences. Your organisation could face reputational damage by using a supplier who is not adopting net zero practices. You may also face other consequences if, for example, you have failed to consider how what you propose to buy might improve economic, social, and environmental wellbeing as set out in the Social Value Act 2012.

The challenges

We know that building sustainability into your procurements and staying on track for net zero can be complex. It can be tempting to put it on the back burner when you are faced with other more pressing organisational challenges. Budget constraints can also make meeting the high up-front costs of energy efficiency upgrade projects difficult.

But, did you know, the public sector across the UK, from local authorities, hospitals and schools to central government, emergency services and universities, spends more than 290 billion on procurement every year. With the right procurement solutions in place, your purchasing power can help drive the transition to net zero and deliver real change.

So, where is the best place to start?

Early preparation and engagement is key:

What does good' look like when building sustainability factors into your procurements? What issues are most important and relevant to your organisation? You can't start your sustainability journey unless you know where you are, and where you want to go.

Start by consulting with your key stakeholders, supply market, and customer base, to reach a common understanding of what sustainability might look like for your contract and what matters most. Look into your organisation's pain points, priorities and risks and create realistic goals to address these factors.

You should consider sustainability as early as possible, ideally when your requirement is still in the pre-procurement / development phase. Make sure you're being specific about the themes you'd like bidders to focus on. When outlining these themes, be clear about the sustainability outcomes that you want to achieve and the internal policies you want your suppliers to comply with. Read our article on how to write a procurement specification' for guidance on the specification drafting process.

In the case of a school, sustainable procurement might involve commissioning a project that requires the suppliers bidding for the work to state what environmental benefits they would offer should they win the contract. These could include installing solar panels to supplement the energy supply to sourcing sustainable materials.

For a local authority, this could be requesting that suppliers implement a design for council housing that uses renewable energy where possible in place of fossil fuels.

Supplier compliance

How much background research have you carried out on potential suppliers?

Procurement Policy Note (PPN) 06/21: Taking account of Carbon Reduction Plans (CRP) in the procurement of major government contracts over 5 million, asks that suppliers confirm their commitment to achieving net zero by 2050 by calling on them to produce a CRP. CRP's must set out the measures a supplier has adopted in line with the guidance, for example by including certification schemes or specific carbon reduction measures they have adopted in the PPN. The CRP must then be published on the supplier's website.

Drawing up a CRP is fundamental to achieving net zero emissions. For this reason, you should take steps to ensure your supply base complies with the latest PPN to understand what your suppliers are doing to meet the government's net zero target.

How to evaluate sustainability in your bids

We have discussed how to evaluate bids in another article in this series. The core principles are largely the same for any sustainability questions you have included.

And finally

Implementing sustainable procurement is a slow process, and you need to prepare for the many steps it takes to get there. Learn to celebrate the minor changes and keep your larger goals in mind as you slowly move toward a sustainable future.

How to access grants and funding to support public sector net zero projects

We know funding net zero ambitions can be a barrier. Decarbonisation requires a significant investment in cleaner technologies. With budgets already stretched, meeting the high up-front costs of net zero projects, such as energy efficiency upgrades and solar PV panels, is an extra burden.

Grant information is often scattered across multiple sites and in various formats. Many organisations lack the time and resources to find and apply for net zero grants.

In September, CCS launched a new web page that brings all open CNZ grants and funding opportunities across the government into one place. The CNZ grants and funding page simplifies the process by bringing everything together and identifies potential routes to market. Moreover, CCS will regularly update the listings as new funding becomes available.

Supporting your net zero transition

At CCS we want to make it as easy as possible for you to decarbonise your procurement portfolio. We have identified 36 commercial solutions in areas that can help accelerate the transition to net zero. Our sustainability team can provide guidance, solutions, and services to support your net-zero journey.

Here are a few examples of how our solutions are being used to decarbonise the public sector:

  • low emission vehicles
  • greener energy solutions, including heat pumps and solar panels
  • construction projects using low-carbon materials
  • refurbishment and maintenance of buildings
  • energy efficient cloud storage
  • removing and reducing single-use plastics from public sector supply chains

No matter where you are on your net zero journey, we can help. To find out more visit our carbon net zero webpage.

More: You can now find all of our Procurement Essentials articles in one place on our website.

Company: Crown Commercial Service

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