June 2010

First Steps in Sustainable Procurement EAUC CPD

Michelle Dixon – Director

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Workshop Objectives+

+ To gain an understanding of what sustainable procurement is and why it is important.

+ To help organisations achieve Levels 1&2 of the Flexible Framework and consider the wider agenda

+ To introduce tools and guidance to help you implement sustainable procurement

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Recap on sustainable procurement principles

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Minimising environmental and social impacts of purchases in balance with economic factors

“Procurement to support wider economic, social and environmental objectives in ways that offer real long-term value”.UK Government Sustainable ProcurementTask force

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Hidden costs+

•240 kg (530 pounds) of fossil fuels

•22 kg (48 pounds) of chemicals

•1.5 tonnes of water

•60kg waste

•81% of the energy consumed during a computer’s life cycle is during production

http://www.it-environment.org/

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Our society must adapt!+

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Strategies and Targets+

“ A university’s procurement policy is one of its strongest ways of supporting sustainability”

“The UK should be a leader in sustainable public procurement in the EU by 2009

The Flexible Framework - Level 3 with area in level 5 by 2009

2006 Sustainable Development Guidance “There are a number of ways in which sustainable procurement can lead to better environmental performance without increased cost – and in many cases create actual cost savings”

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Strategies and targets+

For English Universities: Scope 3 emissions baseline for HE by 2012, emissions reduction target by 2013

Low carbon procurement a priority for delivering low carbon economic activity

50 % Green public procurement (GPP) to by 2010

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Strategies and targets+

“All new non-domestic buildings should be zero carbon from 2019, with the public sector leading the way from 2018.”

80% of universities and colleges in Scotland have signed up - a 5-year Climate Change Action Plan, emissions reduction targets including sustainable procurement.

Most Universities will have to buy carbon allowances and will be rewarded and penalised on performance.

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Sector Response+

EAUC Sustainable Procurement Project andEAUC CPD Training

Build capacity , influence supply chains; address process issues; develop measurement and monitoring tools

Promoting Poverty Aware Procurement on Campus: Commodity information sheets, guidelines, videos, podcasts

Sustainable Procurement Category

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Sector Progress+

Sustainable Procurement Centre of Excellence Survey

130 Universities in UK

45% response rate

Only English Universities responded

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Sector Progress+

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Sector Progress+

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Sector Progress+

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Sector Progress+

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Sector Progress+

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Sector Progress+

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Sector Progress+

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Recent developments: Carbon Reduction Target and Strategy, England

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Current target and strategy: • Outlines the carbon management plan requirement• Sets a sector wide carbon reduction target• Scope 1 and 2 emission targets required – result from energy use

Procurement target expected for 2013:• Possible links with capital funding• Sustainable procurement programmes will need to be in place – training, policy and strategy, formulated management actions, supplier engagement, KPI’s

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Legislation is emerging!+

Article 5 of the EU Energy Services Directive, May 2008

Requires the public sector to take an exemplary role and undertake two measures from a ‘shopping list’ of six including:

(b) requirements to purchase equipment and vehicles based on lists of energy-efficient product specifications of different categories of equipment and vehicles (c) requirements to purchase equipment that has efficient energy consumption in all modes, including in standby mode(d) requirements to replace or retrofit existing equipment and vehicles with the equipment listed in points (b) and (c);

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Recent developments: BS8903+

•Provides more in-depth guidance on basic and advanced principles with case studies

•Assists with implementation of the Flexible Framework at more advanced levels

•First detailed guidance for implementing sustainability procurement programmes

•Links directly to the Flexible Framework

•Overcomes some interpretation issues with the Flexible Framework

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Recent developments: BS8903+

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The Flexible Framework – Building Blocks for Progress

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+ Building blocks for progress – key behavioural and operational change programmes, the facets of good procurement across 5 levels

1. People2. Policy, Strategy & Communications3. Procurement Process4. Engaging Suppliers 5. Measurement & Results.

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The Flexible Framework – Building Blocks for Progress

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Where should we be?

+ Level One on their Flexible Framework by April 2007

+ Level Three by April 2009, for the 2009 goal to be met.

+ Progress must extend beyond this

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Tips on getting started with the Flexible Framework

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+ A ‘Flexible Framework’ – means of implementation not set in stone.

+ Interpretation and application to HE institutions required. + Don’t go it alone - make use of existing sector best practice, related guidance and tools.

+ Keep it simple!

+ Refer to BS8903

Build your own action plan! - You will be given a framework action plan including notes on group discussions from today

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Your roadmap through the Flexible Framework

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+ Do not think of it as a linear action plan

+ Go straight to level two or three in some areas?

+ Complete several related or overlapping tasks at the same time.

+ Which tasks should be completed first?

Road map exercise- create a action flow chart for the flexible framework requirements, Levels 1&2, taking into consideration the these points

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Identify sustainable procurement champions and key procurement staff

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What are the roles and responsibilities of a sustainable procurement champion?

Who are the best people in your organisation to act as sustainable procurement champions?

Who else will play a key role in sustainable procurement?

People – Level 1

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Staff training+People Level 1

+ Suggestion - undertake this after you have identified impacts of procurement and produced a policy.

+ Basic training and induction - use some of the introductory slides• What is sustainable procurement• Why does it matter• What are the social and environmental impacts of purchasing• Introduction to the Flexible Framework

+ Also look at• Identifying need • University policy

Forum for the Future, Sustainable Procurement tool. Demand Review. Tool available on requesthttp://www.forumforthefuture.org/node/1407

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Staff training+People Level 1

+ Suggestion - undertake this after you have identified impacts of procurement and produced a policy.

+ Basic training and induction - use some of the introductory slides• What is sustainable procurement• Why does it matter• What are the social and environmental impacts of purchasing• Introduction to the Flexible Framework

+ Also look at• Identifying need • University policy

Forum for the Future, Sustainable Procurement tool. Demand Review. Tool available on requesthttp://www.forumforthefuture.org/node/1407

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Staff training+People Level 2

+ Advanced training for key procurement staff

• Sustainability questions to ask at pqq stage

• Integrating sustainability into contract specification

• Applying and awarding sustainability criteria

• Whole Life Costing

• Contract management

• Monitoring procurement activity

EAUC Train the Trainer,http://www.eauc.org.uk/training_materials

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Policy, Strategy and Communications – Levels 1 and 2

Policy+

Produce a comprehensive Policy and go straight to Level 2.

What makes a good Policy?+ Clear commitment communicated+ Endorsed by senior management+ Communicates intentions to a range of stakeholders – who is the audience?+ Undergone consultation process – suppliers and staff+ Links to key procurement sustainability impacts and procurement process+ Regularly reviewed

Review the example policies in your groups. Make a note of their strengths and weaknesses and produce an outline policy.

EAUC, Developing a Sustainable Procurement Policy:http://www.eauc.org.uk/training_materials

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Senior Management Endorsement+Level 1 - Policy, Strategy and Communications

Support and endorsement of your Policy and future related activities is perhaps the most crucial element of the programme.

You need more than just a signature on your Policy. What else should you be asking for?

You need to present a business case to your senior managers and get them to buy in to sustainable procurement – one page briefing and a presentation.

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The Business Case+Level 1 - Policy, Strategy and Communications

Make your case by explaining the drivers for sustainable procurement in your organisation: • Compliance with legislation (specifically duty of care in the supply chain)• Cost reduction• Corporate Social Responsibility• Marketing and awards• Internal Policy commitments• External Policy and Strategy • The Sector response and a case study

EAUC, Train the Trainer – Business Casehttp://www.eauc.org.uk/tools_resources

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Making links with the wider sustainable development strategy

+Level 2 - Policy, Strategy and Communications

Aim to embed sustainable procurement into the wider sustainability agenda:

• Environmental Management Systems• Carbon Management Plans• Corporate Social Responsibility• Construction plans

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Communication+Level 1-2 Policy, Strategy and Communications, Level 1 Suppliers

+ A planned approach is necessary in planning communication activities with staff, students and suppliers

+ How we behave is determined by many factors

+ Information provision alone does not facilitate lasting change

+ The Behaviour Change Diamond

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UK Sustainable Development Strategy

What behaviour change initiatives could be applied to Sustainable Procurement in FHE?

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Key impacts of procurement activity+Level 1 – Procurement process, Measurement and Results

Think about impacts throughout the life cycle of a product. Aim to reduce these impacts through the tender process and ongoing supplier engagement.

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Key impacts of paper use+

Is anything missing here?GPP Product Sheethttp://ec.europa.eu/environment/gpp/toolkit_en.htm

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Quick Wins+Level 1 Procurement Process

+ Identify a list of products/contracts that are commonly purchased and that have the potential to make good best practice projects.

+ Refer to DEFRA’s quick win list 2007. A set of sustainability specification is provided on a range of products chosen for

o Environmental Impactso Financial Impacto Political/example setting function

+ Also refer to The Buying Solutions Greenticks initiative

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University of Hertfordshire’s quick win’s

+Level 1 Procurement Process

• Recycled paper

• Purchase of renewable energy

• Biodegradable catering disposables

• e-procurement

• Sustainable building materials

• Fairtrade products and vending

• Green stationary contract

• Energy efficient computers

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Prioritisation and risk+Level 1-2 Procurement Process, Level 1 Engaging suppliers,

+ You need to assess the impact of your contracts in order to prioritise your efforts.

+ Combine the expenditure and impact assessment to build a contract risk database

+ Factors that should be considered:o Level of sustainability risk i.e legislation, pollution, climate change, socialo Level of expenditure – per commodity and contract

+ Also consider contract renewal activity – highlight contracts up for renewal in the next 12 months

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Assessing impacts+Level 1 Engaging suppliers, Level 2 Procurement Process

Impact

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Risk assessment exercise+Level 1-2 Procurement Process, Level 1 Engaging suppliers

Start by assessing the risk of commodity groups. If the risk and expenditure of a commodity group is high also assess the expenditure only of each category.

1) Define high, medium and low impact criteria. Think about legislation, pollution, climate change, social issues. E.g:High - Legislation applicable, extensive natural resources use/ pollution/ transportation/ threat to habitats/human rights issuesMed – No applicable legislation but some natural resources use/ pollution/ transportation/ threat to habitats/human rights issues

2) Assign high medium and low to expenditure category – categories suggested

3) Highlight contracts that are high risk, expenditure and that are alerted for renewal in the next 12 months

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Durham University’s High Risk Contracts

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Hazardous waste;Skip hire;Asbestos Consultancy;Uniforms;Facilities Management;Waste;Food;Car Rental;Pest Control.

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Applying criteria+Level 1 Procurement Process

Sustainability criteria can be awarded in the same way as any other technical specification.

Define the subject matter of a contract in relation to environmental issues.

You can:•Take production methods into account•Exclude any bidders that have been prosecuted under any environmental laws

You must: state the award of criteria on sustainability issues in the tender documents

You must not: act unfairly, including giving preference to a company that had a specific eco-label or EMS (this can however be evidence)

Subject Matter: Examples

“Tender for Energy Star certified computers and laptops”

“Tender for energy efficient computers and laptops”

“Contract for catering services which supply organic food”

“Contract for catering services which supply local produce”

Applying criteria+

GPP Toolkit: Legal Module

Technical Specifications: Examples

“Certified Blue Angel paper”

“Containing at least 80% of post-consumer waste content”

“Totally chlorine free (TCF) paper”

“Durability>100 years, according to ISO 9706 or DIN 6738”

Technical specification+

GPP Toolkit: Legal Module

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Applying criteria+Level 1 Procurement Process

Module 3: Practical module

Refer to GPP Product Sheets for guidance on criteria and awarding points.

General recommendations for 11 product groups is that at least 10-15% of the award points should be for sustainability criteria.

http://ec.europa.eu/environment/gpp/toolkit_en.htm

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Whole life costing+Level 1 -2 Procurement Process

+ Considers the economic costs throughout the lifetime of a product from extraction of natural resources through manufacture and transportation to disposal

+ Emphasis on ‘most economically advantageous option’ and ‘value for money‘

+ Top level commitment required

+ Apply to high risk contracts and purchases.

+ Link to contract and product specifications and application of criteria

+ Tasked to the Sustainable Procurement Champion?

Forum for the Future Whole Life Costing Tool

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Whole life costing+Level 1 -2 Procurement Process

+ Considers the economic costs throughout the lifetime of a product from extraction of natural resources through manufacture and transportation to disposal

+ Emphasis on ‘most economically advantageous option’ and ‘value for money‘

+ Top level commitment required

+ Apply to high risk contracts and purchases.

+ Link to contract and product specifications and application of criteria

+ Tasked to the Sustainable Procurement Champion?

Forum for the Future Whole Life Costing Tool

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Supplier engagement+Level 1-2 Supplier engagement

+ Design a supplier engagement programme to ensure you influence your supply chain

+ Think about how you can influence your suppliers at each stage of the procurement process• Tender opportunity adverts• Pqq• Tender specification• Contract interviews• Award of contract• Contract management

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Supplier engagement+Level 1-2 Supplier engagement

+ Decide on methods of engagement• Written communication – seek views or inform on Policy?• Performance questionnaires• Workshops • One-to-one meetings• Incentives• Targets

Remember the behaviour change diamond!

What targets could key suppliers be set?What incentives could be set?

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Supplier engagement+Level 1-2 Supplier engagement

Supplier engagement Defra's Story

The Approach – developed gradually through consultation

- Annual Conference with awards - Quarterly Supplier Fora- Group Workshops- Individual workshops- Sustainability action plans- Involvement in wider sustainability strategy

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Supplier engagement+

Support and advice for businesses and organisations to help them reduce their sustainability impact:• Toolkits• Accreditation• Awards• Newsletter• Free consultancy• Promotional opportunities

http://www.greenprocurementcode.co.uk/

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Measuring and Monitoring+Level 2 Measurements and Results

+ Monitoring is required for effective management

+ How can we monitor sustainable procurement activity? o Progress tracking on the flexible frameworko Setting KPI’s o Monitor high risk contracts – meetings, reports, contract penaltieso Efficiency Measurement Model – now called “Measure”o Other software?

What KPI’s could be used to measure progress on sustainable procurement?

How could progress against KPI’s be recorded efficiently?

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Measuring and Monitoring+

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Sustainability appraisal of procurement activity

+Level 2 – Measurement and Results

Undertake a review of procurement activity:

How are purchasing activities carried out, what is already happening and how that will impact your development through the Flexible Framework?

+ Centralised or decentralised?+ Use of OGC contracts+ Outsourcing and PFI + Current good practice + Current commitment and support

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Related Guidance+

+Forum for the Future, Buying a Better World

+ European Commission, Buying green! A handbook on environmental public procurement.

+ Forum for the Future and HEPS , Purchasing for Sustainability Guidance for Higher Education Institutions.

+ OGC, Social Issues in Purchasing.

+ OGC, Buy green and make a difference.

+ WRAP, Sustainable Procurement: Regional Guidelines, Sustainable Procurement: Making it happen.

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Implementation Tools+

+ EAUC Training Materials – Policy and Strategy, Social Issues, Supplier Engagement, Risk Based Approach, Train the Trainerhttp://www.eauc.org.uk/training_materials

+ Forum for the Future, Sustainable Procurement tool. Available on requesthttp://www.forumforthefuture.org/node/1407

+ European Commission, GPP Toolkit. Training, Action Planning, Criteria – Legal and Practicalhttp://ec.europa.eu/environment/gpp/toolkit_en.htm

+ WRAP, Sustainable Procurement: Regional Guidelines, Toolshttp://www.wrap.org.uk/nations_and_english_regions/english_regions/regional_case_studies_and_projects/sustainable_procurement_regional_guidelines/tools.html

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Implementation Tools+

+ DEFRA. Buy Sustainable - Quick Wins.http://www.defra.gov.uk/sustainable/government/what/priority/consumption-production/quickWins/

+ Efficiency Measurement Model http://www.procureweb.ac.uk/2153

+ Public Sector Food Procurement Initiative, Food Procurement Tools. http://www.defra.gov.uk/farm/policy/sustain/procurement/resources.htm

+ Action Sustainability, Evaluation Tool. http://www.actionsustainability.com/evaluation/flexible_framework/

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Where from here?+

What are the barriers that you think you will need to overcome?

How will you overcome them?

What help do you need?

How can Universities work together?

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Help and assistance+

Revise: Delivering Sustainable Resource Solutions

Michelle Dixon – Director Tel: 0845 643 1783Mob: 07595 820660Email: michelle.dixon@srs-eu.comWeb: www.srs-eu.com