Supply chain reaction
Four years ago the government set itself the target of becoming one of the EU's leaders in sustainable procurement by 2009. With the help of the environmental consultancy firm ADAS UK, it has made progress. Here the firm's Richard Laverick reveals the insider's view - and how being involved energised the companyAs the UK's largest employer, with more than six million employees, the UK government has the potential to influence people's choices for the better, resulting in a cumulatively less negative impact on the environment. Spending some £3.2B on food, £4.5B on waste treatment, £5.4B on transport and billions of pounds on maintenance every year, the government uses a supply chain of thousands of companies from across the globe. Consequently, public expenditure, some £175B or around 13% of GDP, represents a tremendous opportunity to improve the sustainability of the UK economy and its trading partners.
In 2005, the Secretary of State for Environment, Food and Rural Affairs and the Chief Secretary to the Treasury appointed Sir Neville Simms to convene a business-led taskforce to devise a National Action Plan to deliver its 2009 leadership goal. The Sustainable Procurement Task Force was given one year in which to deliver the National Action Plan.
It agreed a definition of sustainable procurement: "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."
Following publication of the group's report, Procuring the Future in June 2006, Simms said: "Future generations will neither excuse us nor forgive us for ignoring the signals that we can see today. But if the latest sustainability strategy, Securing the Future, is driven forward with determination and the government's huge spending power is harnessed as recommended in this report and if the first steps are taken now, right now, future generations will have much to thank our leaders for."
Following Sir Neville's report and together with the Treasury's Transforming Government Procurement report, the Sustainable Procurement Action Plan (SPAP) represents the government's strategy in which the key goals are defined as a move towards:
- a sustainably built and managed central government estate that minimises carbon emissions, waste and water consumption and increases energy efficiency
- sustainably built and managed properties and roads throughout the public sector
- government supply-chains and public services that are increasingly low carbon, low waste and water efficient, which respect biodiversity and deliver wider sustainable development goals
Supplier engagement programme
Commenting on the objectives of the supplier engagement programme, a Defra spokesperson said: "Our approach to supplier engagement takes account of the diversity of our suppliers providing opportunities to both large and small suppliers.
"It is very encouraging that in this period of financial difficulty, businesses are approaching us to find out more about how they can be more sustainable and more resource efficient. We've noticed an increase in appetite to participate in our programme."
The practical measures referred to include:
- standard product specifications for government procurement to deliver quick wins in areas such as energy efficiency
- permanent secretaries are accountable for their department's overall progress against the SOGE targets and for ensuring that staff have performance objectives and incentives that drive the implementation of the SPAP
- timber procurement policy shift and guidance
- Salix funding for low carbon initiatives
- a strategy and tips to greening government ICT
- carbon emissions reductions from operational activities such as air travel and vehicles
- the work of the Collaborative Procurement Network, a group of finance and procurement professionals from the Core Department and the Network of Executive Agencies and Non Departmental Public Bodies whose remit includes sustainability in addition to its efficiency objectives.
In the process of engagement with its key suppliers, Defra initially chose companies on the basis of annual spend, potential for sustainability wins and its ability to influence others. ADAS was chosen as one of the key suppliers to participate in Defra's pilot project on sustainable procurement.
ADAS is one of the UK's largest independent providers of environmental consultancy, rural development services and policy advice. It has 750 staff, offices across the UK and a long-standing history in the science behind environmental protection.
Defra's sustainable procurement programme is a powerful catalyst for change, going beyond mere aims and aspirations, it provides practical tools and resources which ADAS has employed to engender change throughout its business and beyond into the supply chain. As part of its engagement with Defra, the firm has signed a Joint Sustainability Action Plan that specifies a range of actions with targets, areas for improvement and deadlines. The plan involves participation in Defra workshops in addition to Defra-supported workshops at ADAS premises involving senior management, central procurement staff, those that deliver and procure goods or services into contracts in the field, and key suppliers.
A core feature of the action plan is communication. To achieve maximum benefit and impact from this, ADAS recruited environmental communication firm Buttonwood Marketing. These initiatives introduced a group wide operating philosophy based on the Ten Principles of One Planet Living.
The company also created a corporate social responsibility intranet site that reports live data on greenhouse gas emissions associated with business travel and the emissions of the company. This helps staff to understand the challenge posed by the targets and makes the environmental impact of business practices visible to all. Staff have commented that watching the data grow through the year makes the issue more real.
This programme of activity is underpinned by CSR-related newsletters to maintain the profile of the initiative and to seek new ideas from staff for improved sustainability. All organisations must appreciate that without the full engagement of all staff, genuine and rapid progress towards more sustainable practices is simply not possible; effective communication and awareness is therefore essential.
ADAS has employed two tools from the Sustainable Procurement Task Force initiative. The first is the Flexible Framework for Sustainable Procurement, which measures competency by setting out the actions required to make progress along a defined path in the five key areas:
- strategy and communications
- procurement process
- supplier engagement
- measurements and results
The framework has been useful for ADAS and has driven a range of sustainability initiatives. Work that Defra has undertaken with ADAS is now being replicated in what ADAS is doing with its own suppliers; meeting a key goal of the Defra initiative, to cascade sustainability throughout the supply chain.
The second major tool employed is a prioritisation methodology which is designed to help organisations identify those elements of the supply chain that offer the best opportunity for benefits. These are assessed on the basis of risk, scope and influence.
Participation in the Defra Sustainability Action Plan is voluntary. However, aside from the company's moral and ethical responsibilities, involvement in work such as this is essential for businesses that wish to succeed in the new low carbon economy.
Bids for work in the public sector now require the inclusion of detailed sustainability information and evidence of a working corporate responsibility policy with real and challenging performance indicators in areas such as greenhouse gas emissions and sustainable procurement. There is also a growing trend (currently about 25%) for sustainability information to be specified when bidding for work in the private sector.
Moving forward all organisations will need to work in partnership with their clients and suppliers to reduce risk in the supply chain; only then can the UK make tangible progress towards meeting its sustainability targets.
For ADAS, involvement in the scheme has helped to energise the company's sustainability work; the tools and assistance provided by Defra have made the process simpler and much more efficient and the joint sustainability action plan provides a focus for continued improvement. As a result, just as Defra is seeking a lead position on sustainable procurement, ADAS is able to demonstrate leadership in its sustainable development. By being able to provide detailed emissions data for the travel related to each delivered project, ADAS can help clients and government to appreciate their impacts and improve their own sustainability performance. Underpin this with a policy for sustainable procurement and clients can be assured that the firm is doing everything possible to reduce the overall impact of its work and in the goods and services which it procures into client contracts.
While commitment from all stakeholders is vitally important to the success of sustainability initiatives, it is also important for significant impetus to come from senior management. ADAS's managing director, Colin Speller says: "We are in the process of remodelling our business to adapt and thrive in the new low carbon economy - to be more sustainable in every sense of the word."