Sustainable Procurement Practice Shaun McCarthy Director Action sustainability Action Sustainability Inspiring sustainable procurement

Sustainable Procurement Practice

Shaun McCarthyDirector

Action sustainability

Action SustainabilityInspiring sustainable procurement

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Welcome


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This presentation is about…

Who? What? Why? When? How? Where? Some controversial stuff The future


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Who – Action Sustainability…?


Action Sustainability is a social enterprise set up to lead and inspire sustainable procurement.

How…?

We are a not for profit social enterprise registered as Community Interest Company. We manage events and seminars to promote more sustainable business. We also offer specialist expertise and services to public and private sector organisations interested in improving the impact of their supply chain on society.

Who…?

We support and facilitate the Strategic Supply Chain Group, a leading authority on sustainable procurement. We aim to extend the boundaries of best practice in this area and advise organisations and government on sustainable procurement policy and strategy.

Delivery

We provide research, case studies, support, training, benchmarking and consultancy. Our group aims to continuously extend, lead and inspire best practice in sustainable procurement

Who – Strategic Supply Chain Group

To lead and inspire good sustainable business practice

This is achieved through a series of promotion and awareness events, often working with member organisations and other groups with an interest in this issue.

To extend the boundaries of best practice

Through research, benchmarking and thought leadership in sustainable procurement. To use our influence with members and their supply chains to have a net beneficial impact on society.

To act as the primary source of advice and guidance to government policy makers on sustainable supply chain solutions

We help Government to define and shape best practice in sustainable procurement. We support the implementation of the Sustainable Procurement Task Force (link) and the Sustainable Consumption and Production Task Force

To lead and inspire sustainable procurement.


Who – Shaun McCarthy…? Used to be an engineer (got better!) 20 years buying and selling things (Shell and

BAA) Now:

Director of Action Sustainability Head of CR for everything BAA buys and everything

BAA builds BAA – 2nd place in BITC Index 2006

MCIPS and MIEMA Lead BAA Climate Change/Energy policy London Sustainable Development Commissioner

Chair London Olympics Sub-Group Sustainable Procurement Task Force member Chair Strategic Supply Chain Group


[email protected]

What – Sustainability…?

“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”

Bruntdland Definition


What – Sustainable Procurement…?


Sir Neville Sims Definition

“Using procurement to support wider social, economic and environmental objectives, in ways that offer real long-term benefits”.

Sir Neville Sims is Chairman of the UK Sustainable Procurement Task Force

Task force findings – not UK Government Policy

Why…?

Reputation

Performance

Licence to Operate

Brand

Sustainable Procurement

Customerrequirements

Stakeholderdemands

Employee expectations

Benchmarking

Legislation &Standards

Impact Reduction(environmental)

Business efficiencies

Risk management


Why – Private Sector…?


0 20 40 60 80 100

BAA Stakeholder Survey 2003Q13. To what extent does a sustainable development approach

make growth more acceptable?

Retailers

Suppliers

Passenger RepsBusiness Partners

Media

Pressure Groups

Employee Reps

Local AuthoritiesMPs, MEPs

Gov’t Agencies

Business Orgs

Community Reps

Why – Private Sector…?


When…?


Better make it soon then……..

How…?


Sustainable Production & Consumption (more for less)

Respond to customer needs

Make/deliver stuff

Buy stuff Account for stuff

Climate change and Energy

Natural Resource & Env. Enhancement

Sustainable Communities

Sustainable productsResponsible marketing

Waste minimisationEnvironmental impact

Efficient productsConsumer information

Efficient productsEnvironmental impact

Community impactSocial implications of products

Energy efficient deliveryEnergy services

Manufacturing efficiencyServices minimise resource use

Community impactSocial implications of products

Demand managementInventory managementLife cycle cost

“Green” energy procurementEnergy conservation

Materials useEnvironment impact of purchases

Ethical procurementLocal suppliersCommunity partnerships

Business planning

CO2 reportingEmissions trading, CCL etc.

Reporting (triple bottom line)

Charitable donationsBusiness ethics

UK Government 4 Priorities

What organisations do

How…?



Buy stuff








How…?



Buy stuff








Hundreds of products

Thousands of suppliers

Countless 2nd, 3rd, 4th tier suppliers

Tens of thousands of transactions

Hundreds of end users

Big....Complex...

How - Organisation

Corporate ResponsibilityBoard

Big Ticket Environment•Noise•Air Quality•CO2/Energy•Waste

OtherEnvironment•Biodiversity•Natural resources•Contamination•Etc.

Corporate Responsibility•Social•Economic•Ethics•Etc.

CAS Environment

•Policy•Strategy•Governance•Talent management

GroupAreas ofExpertise

Policy advice•External representation•Options•Analysis•Policy Implementation advice

•Legislation•Strategy framework•Policy communication•Performance reporting

Businesses

Strategy•Long term•Sustainability• impacts

Solutions•Sustainable•Performance

Facilities•Planning•Solutions

Supply Chain*

Capital*

DeliverSustainableSolutions

SustainabilityTeam

Translate outputs•SC and Capital processes

Define knowledge•To achieve outputs

Guidance•Documents to inform

Advice•Hands on support

Learning & Development•Upskilling project teams

AssuranceProcess reviews Audit Corrective action

BAA Example

How – Process…?


Specification

Supplier qualification and

appraisalIdentification of

need

Contract managementand review

Tendering andtender evaluation

Accounting:whole life costing

Financialevaluation

Financialreview

Environmental Purchasing – guidance for organisations CIPS/IEMA/NHS PASA 2002

Inputs

Issue briefs AoE input (where

appropriate – Big Ticket?)

Approved Brief Decision Report

Any planning/regulatory requirements

Approved Options Decision Report.

Design Brief Project Execution

Plan

CEMP framework (via Decision Model)

Approved Scheme Design Brief

Draft targets/KPI’s

Approved CEMP Targets/KPI’s

Assurance outcomes Target/KPI’s Reconciliations

Primary Responsibility (RACI)

A Development ManagersC Project GroupsC Sustainability AoE

A Development ManagersR Design ManagersC Project GroupsC Sustainability AoE

A Development ManagersR Design ManagersC Project GroupsC Sustainability AoE

A Project LeadersR Project GroupsC Sustainability AoE

A Project LeadersC Sustainability AoE

A Project LeadersC Sustainability AoE

IT/ Management System Links

Decision Model Decision Model Decision Model Decision Model Decision Model Decision Model

Outputs

List of relevant issues

Issues captured in Brief Decision Report

Proposed approaches for carbon intensity included in Brief Decision Report.

Whole Life Cost factors captured

Draft Design Brief capturing issues

Energy/CO2, waste & sensitive materials assessments for each option

Scheme Design Brief capturing issues

Whole life cost report Non conformances

with Materials Strategy justified and approved

Completed energy/CO2 & waste assessments

Self-Assurance checklist

List of relevant construction activities

Production Plan capturing issues

Completed CEMP Approved targets/KPI’s BREEAM data

Implemented CEMP Self-Assurance

checklist Cost reconciliation of

planned versus actual for all sustainability cost lines

Handover file containing all relevant issues

Risk Register highlighting any residual risks

Knowledge capture

Develop performance requirements in Options

Brief

Define requirements in Scheme Brief & define

scope of works for CEMP

Define requirements in Production Plan & produce

CEMP

Approve CEMP & implement

Report the level of performance achieved against the Brief's &

CEMP

Description: This process identifies the requirements needed for projects to deliver facilities solutions that represent long term value and support BAA’s aspirations, policies and standards with respect to Corporate Responsibility (Sustainability). The process describes the responsibilities of a project, and highlights how sustainability impacts are to be managed.

Objectives : To define what needs to be done to deliver sustainable solutions with respect to:

Addressing the impact of a project; Responding to planning requirements; Managing reputational risk; Addressing whole life costs; Assuring compliance with legal/BAA policy requirements;

and Delivering leading edge performance for priority issues.

Relevant Policies

Management Policies Capital Sustainability Policy

Technical Policies N/A

Identify & relate relevant sustainability issues

Advice

Delivery

How - Process BAA Example

How - Process

Mandatory QMS Procedures: detail the procedures that must be adhered to

QMS Standard Forms: list the standard forms that should be used in support of the procedures.

Checklists: list the checklists that should be referenced.

Activity Description

Establish the significant sustainability issues and relate them to the proposed approaches.

Review and develop the issues in detail and relate them to the proposed options.

Define the issues into performance requirements for the Scheme Brief. Understand construction approaches to scope the activities for the CEMP.

Establish the Production requirements together with confirmed construction activities for CEMP production.

Seek approval for CEMP and identify the most effective way of implementation.

Assess the level of performance achieved against the Brief's/CEMP and prepare information for the handover file.

Activities

Decide and agree the significant issues and opportunities relating to approaches.

Understand the carbon intensity of approaches together with high level renewables opportunities

Engage where necessary sustainability AoE input.

Review in detail the agreed significant sustainability issues/opportunities highlighted and develop them into performance requirements for Design Brief.

Ensure significant issues/opportunities are included in Risk workshop.

Include input from any Environmental Impact Assessment (EIA) or other planning requirements/conditions.

Develop outline Whole Life Cost factors using benchmarks.

Understand Materials and Waste issues.

Develop energy/CO2 assessments for options.

Re-affirm issues relevance and refine for inclusion into Scheme Brief.

Update Risk Plan/Form.

Define Whole Life Cost factors, including end of life costs in model.

Work up business cases for potential renewables use and energy efficiency opportunities.

Develop draft energy/CO2 target.

Include Materials Strategy requirements.

Estimate waste generation and any hazardous waste issues.

Prepare a list of construction activities for CEMP.

Re-affirm issues relevance and refine for inclusion into Production Brief.

Produce CEMP. Update Risk Form. Fix targets and KPI’s. Ensure costs include

all sustainability issues (e.g. energy, waste, disposal).

Confirm compliance with Materials Strategy or agree any concessions.

Assign CEMP responsibilities in an auditable framework.

Review sustainability cost lines.

Meter energy consumption during project and capitalise.

Measure waste generation.

Report the level of performance achieved against the Brief's/Plans

Extract notable learning and place it into the sustainability learning file.

Prepare handover file of all the relevant information required for release throughout the business.

Measure energy in use and feed into post project review and airports business plan.

Review whole life cost model assumptions, capture benchmarking data and feedback.

Templates

Issue Briefs Decision Model

How to doc’s Decision Model

Decision Model Justification Report Decision Model CEMP Template

Decision Model Decision Model

Develop performance requirements in Options

Brief

Define requirements in Scheme Brief & define

scope of works for CEMP

Define requirements in Production Plan & produce

CEMP

Approve CEMP & implement

Report the level of performance achieved against the Brief's &

CEMP

Identify & relate relevant sustainability issues

Advice

Delivery

BAA Example

How - Risk…?

What is risk...........?

The really bad stuff that happens if you don’t do

something about it

Shaun McCarthy 2006


How - Risk…?


H/L = MM/L = LL/L = L

H/M = HM/M = ML/M = L

H/H = HM/H = HL/H = M

Impact

Likelihood

Low

High

High

How - Risk…?

Impact

Likelihood

TreatTolerateTolerate

TerminateTreatTolerate

TerminateTerminateTreat

Low

High

High


How – To get started…?


management commitment

Business Improvement

Team

budgetholders

usersspecifiers

riskmanager

customersfinance

Procurement,Environment/Energy/ Estates/ Waste

sustainable procurement

risk management


risk assessment


strategy and policy

(adapted from slides courtesy of NHS PASA)

How – will it turn out…?

Air Quality

Climate Change

Noise Surface Access Waste

Water quality Biod. Materials

Humanrights

Local suppliers

Cleaning

Coaching

Baggagesystems

Construction

Architect

Consider your impact on specific issues – not “one size fits all”


BAA Example

How – will it turn out…?


clinical wastemedical consumables

patient transport catering services

energy

uniformsoffice furniture

signage

pharmaceuticalscleaning materials

employment agencyservices

stationery

Profile

Environmental

Risk

NHS Example

How – Do you know…?


BITC Index www.bitc.org.uk

How – Do you know…?


Time

Foundation

Embed Practice

Enhance

Lead Flexible framework

Benchmarking how well you are addressing your sustainability issues against how well others are addressing theirs

www.actionsustainability.com, [email protected]

How – To measure benefits…? Tonnes of CO2 abated No abatement notices for

nuisance Tonnes of waste diverted from

landfill No prosecutions for

contamination or biodiversity Tonnes of aggregate & cement

abated from natural sources Tonnes of HFC/HCFC abated Volume of timber abated from

non-sustainable sources Quantity of PVC not procured Quantity of formaldehyde not

procured No red residual risks related to

human rights


Where – To get help…?

www.actionsustainability.com

www.bitc.org.uk www.iema.net www.cips.org www.lsx.org.uk www.forumforthefuture.org www.wrap.org www.envirowise.gov.uk www.londomremade.com www.thecarbontrust.cu.uk


Where – to get training…?


Do you have the right to procure un-sustainably?

Organisations in the public and private sector are coming under increasing scrutiny by government, non-government organisations, investors and customers to act responsibly. The biggest area of reputation risk lies beneath the supply chain. Organisations need to understand how to translate their environmental and social values through their supply chains to inspire and embed responsible behaviour.

Content

This one day programme provides procurement and environment professionals with the capability and confidence to understand and exploit the benefits of procuring effectively and responsibly. This is a practical seminar with expert coaching and case studies.

Quality

The course is referenced in the Government’s 2006 strategy “Procuring the Future”. This will be the only programme of it’s type to be accredited by the Chartered Institute of Purchasing and Supply

www.cips.org and the Institute of Environment

Management and Assessment http://www.iema.net/,

Delivery

The programme is delivered by leading experts in this field. Barbara Morton, Project Manager for the Sustainable Procurement Task Force, and Shaun McCarthy, Chair of the Strategic Supply Chain Group and Chair of the London Sustainable Development Commission 2012 Sustainability Group.

www.actionsustainability.com, [email protected]

Some controversial stuff

Minimum standards Won’t work on

their own Unlikely to be

complied with UK target for 100%

BREEAM excellent buildings

17% achieved



Beware “Greenwash” UK Green Tariff

energy Just a certificate

for your wall Makes no

difference to the environment



ISO 140001 for suppliers Not the whole

solution One size fits all May not get you

what you need


The Future


How much longer will it be acceptable for organisations to:

Grow their business and increase greenhouse emissions?

Send waste to landfill? Buy from organisations

with poor human rights practices

Deplete natural resources in construction and operations

Disrupt our neighbours


Thank you


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