Five tips for greener supply chains

posted by Dan Gibson
16 August 2021

Climate change might be the defining global issue for the next decade, but in many countries, public procurement is still focused on sourcing low carbon products rather than greening wider supply chains and buying practices.

Embedding sustainability into procurement processes and external partnerships is no easy feat – it’s tough to control and to evaluate - and that’s why the conversation is stuck on increasing demand for greener goods, achieving economies of scale and driving down prices.

These are all important steps, but if housing associations, councils, hospitals and universities want to maximise their efforts to cut greenhouse gas emissions, they need to look further than purchasing low carbon products. Involving every aspect of their organisation in the sustainability drive is vital, and that includes internal buying techniques and external suppliers. Here are five tips on how:

1.     Strengthen tender evaluations. Just asking how suppliers are reducing their operational carbon footprint isn’t enough. Procurement managers must give net zero its own ring-fenced proportion of the assessment weighting in tenders, and also ask how bidders – as trusted partners – will help public sector organisations to become more sustainable. This type of scrutiny will identify those suppliers who share your values around net zero and those who see it purely as a statutory requirement.

2.     Use more carrot, less stick. Traditionally, performance management has been a punitive supply chain practice, but applied to sustainability, an incentive-based approach can be more effective. Use techniques such as bonus payments that, in the past, were handed to suppliers for achieving ‘On Time In Full’ KPIs but apply them to carbon performance instead.

3.     Green your contract management. In the tender process, explore and assess how a supplier plans to use innovative practice and alternative delivery methods to cut carbon, for instance fewer product drops or increased use of electric vehicles. Building in greener practices, right from the start, can intrinsically reduce emissions.

4.     Question low carbon intentions. Delve deeper into exactly what suppliers mean when they talk about sustainability in a tender. For example, distinguish between construction suppliers who have a fabric first approach (where they prioritise insulation ahead of add-ons like solar panels) and those with a technology approach, where there is an ongoing maintenance requirement – such as driving round to service and fix solar panels which will, in itself, increase carbon. Do suppliers have a whole life perspective around carbon reduction rather than just centring, in isolation, on the item or service that is being procured?

5.     Support greener manufacturing. Look at the climate footprint of how suppliers are producing green products, not just the finished items. For instance, there’s a big global push around modern methods of construction (MMC) right now and that’s because factory-built buildings can help their buyers to cut carbon through honed factory processes, reduced lorry deliveries, less travel to different sites for workers and a smaller amount of waste on site.

Ultimately public procurement professionals must lead by example and examine their own role in embedding sustainability. They can mandate suppliers to implement green manufacturing processes or optimise waste recycling but if they still demand daily drops of products in low volumes, across multiple locations, the overall impact is going to be mitigated, regardless of whether the supplier’s van is diesel or electric.

  Dan Gibson is a senior procurement consultant at Procurement for Housing

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