Boost for innovators as Government sets sights on green procurement

That was the key message to come out the inter-departmental jamboree Leading by Example – Sustainable Procurement in the Public Sector this week.

Central to the debate was the belief that Government must pay more attention to social and environmental concerns when allocating the £125 billion it spends on goods and services every year.

And this can only be good news for environmentally-oriented suppliers and innovators.

Sir Neville Simms, chairman of the Sustainable Procurement Taskforce which will shepherd in the changes in the way Government does business, told delegates the Prime Minister has set the UK the target of becoming a world leader in sustainability by 2009.

“It’s a huge task and even though some small steps have been taken along the road we will have to speed up significantly in order to meet this challenging goal,” he said.

“As a responsible, mature society this is a natural progression which we must now pursue.”

With it huge financial clout the public sector could play a major role in this, he said, and would have an enormous influence on sectors such as construction, energy markets and food production.

Nay sayers will argue that sustainability comes at a financial premium that will put pressure on the public purse – inevitably leading to higher taxes or cuts in service delivery.

But Sir Neville insisted it was not a case of compromise.

“It’s not about sustainable procurement at a price,” he said.

“We can deliver better value for the public purse while receiving better goods and service.”

He said the public sector needed to move away from ‘cost is king’ thinking when looking at tenders and take a more holistic, long-term approach basing decisions on true value rather than the price tag alone.

“Sustainable procurement is about changes in the way we think, changes in the way the market works and changes in the way goods and services are prepared and delivered,” he said.

“One of the tasks is to work out how to add apples to pears to oranges – environmental considerations to social considerations to economic considerations.

“We don’t underestimate that task.”

While sustainability’s climb up the political agenda will doubtless help established socially and environmentally aware businesses with existing products and services, perhaps the biggest boost will be felt by innovators.

Dr Jack Frost, chairman of the Government’s Environmental Innovation Advisory Group, outlined his views on how best to move the UK towards sustainability.

Trying to re-educate the consumer was flogging a dead horse and rather than expecting people change, the market needed to change.

“The green consumer is a red herring,” he said.

“The people who buy things on the basis of entirely green criteria are a minority.

“Sustainable choices can be too costly, risky or just too ugly – who wants to own an energy saving lightbulb [because of its aesthetics]?”

“The benefits of sustainability accrue to society but the risks and cost accrue to the buyer, so the balance is wrong.

“We need to design and generate new products that are sustainable and people might actually want.”

Innovative ideas were not the problem, he claimed.

But a Catch 22 exists in that before a product exists there is no demand for it, so investors are reluctant to back it.

This makes the step from idea to production and marketing huge, and all to often impossible, he said.

The way to overcome this gap did not rest with grant culture and subsidies which, he said, were a bad way of encouraging sustainability as they are not in themselves sustainable.

What is needed, argued Dr Frost, was a combination of legislation and ‘forward procurement’ whereby the Government could help by creating aspirational advance orders.

“They could say ‘we know this doesn’t exist, but we’d buy it if it did.’

“Government can say: I’ve got this need, is there anyone out there who can meet it.”

“Then a company knows that if it meets these requirements, it can sell a product.

“That amounts to an order note and an innovator can take that to the bank and ask for investment on the strength of it.”

The bulk of the Sustainable Development Task Force membership comes from the business sector and there are also representatives from the public sector, NGOs and voluntary groups.

Details of its plans and activities can be found at its website.

By Sam Bond