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

NB: This article was originally published on 1 February 2023. All information was correct at the time of writing, but may not be fully applicable following the introduction of the Procurement Act 2023.

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 commercial activities, from what and how you buy it to who you buy from and what happens after your contract is signed.

Some examples of sustainable procurement include:

• purchasing electricity from renewable sources
• purchasing refurbished IT hardware, or sending your existing equipment to be recycled/re-used at the end of your contract 
• 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 maximise 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 continue as you’ve always done before or when you are faced with other organisational challenges. Budget constraints can make up-front costs of energy efficiency upgrade projects seem higher –  yet they make savings during the life of the contract.

This is where we come in. The UK public sector, from local authorities, hospitals and schools to central government, emergency services and universities, spends more than £393 billion on procurement every year. With the right procurement solutions in place, your collective purchasing power can help drive down the cost of 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. As the supply chain matures, understand what sustainable requirements you can specify up front- don’t just leave it to the quality evaluation. For example, many suppliers may be able to provide electric fleets and other sustainable modes of transport for deliveries – establish that at the start and sustainability is already baked in.

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.

For example, a local authority looking to build new social housing, may specify that the successful supplier will be required to use sustainable construction materials and include renewable energy for residents. They may also ask potential suppliers to explain how they would mitigate the environmental impact of construction, including reducing waste to landfill or using sustainable fuel for vehicles as part of their quality evaluation. They could then include KPI’s and metrics into the contract to measure the sustainable benefits that are realised.

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.

Considering the whole life of your contract

To deliver true sustainability, you need to consider the whole life of your contract, not just the initial procurement activity. 

Have you considered the total cost of the contract, beyond the initial upfront cost? Many sustainable contracts might be slightly more expensive upfront than the traditional technologies, however may deliver significant savings during the life of the contract through energy efficiencies and waste reduction.

What will the repair and maintenance look like for the asset? Can it easily have new component parts sourced to extend its lifecycle?

Can you resell the asset after you’ve finished or is there a process for decommissioning or recycling the component parts? Try and consider how you can ensure as little waste to landfill after the fulfilment of your needs.

After award

Selecting your supplier is just the start of the journey. Think about any reporting requirements you need to build to ensure you can monitor the sustainability of your contracts. Also think about how you’re going to manage your contract and suppliers to ensure the sustainable benefits are realised. What gets measured, gets monitored!

And finally…

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

Our grants and funding web page brings all open CNZ grants and funding opportunities across the government into one place. This page simplifies the process by bringing everything together and identifies potential routes to market. 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 a comprehensive range of 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.