Reduce global greenhouse gas emissions by 15% with a sustainable procurement strategy
A sustainable procurement strategy can completely transform your organisation’s procurement management. And because of the scale of public procurement, it means that it has the potential to positively impact the environment.
In this blog, we’ll outline the things you should consider when developing a sustainable procurement strategy for your organisation.
What is sustainable procurement?
Sustainable procurement is the process of procuring goods, services and works in a way that benefits society and the economy. At the same time, the procurement activities should minimise damage to the environment, while achieving value for money.
While producing a sustainable procurement strategy, organisations should consider the following factors:
Social
- Worker’s rights
- Ethical issues
- Fair pay.
Environmental
- Air quality
- Water use
- Recycling
- Greener activities.
Economic
- Local economy
- Life cycle cost.
In the UK, it’s now compulsory for suppliers in the public sector to meet selection-stage criteria relating to carbon reduction. This is part of the UK government’s procurement reform. The pass/fail criteria will assist buyers in selecting suppliers that are committed to achieving net-zero emissions by 2050.
We talk more about procurement reform in the April edition of Procure Insider. Download the newsletter to find out more!
Why do organisations need a sustainable procurement strategy?
The scale of public procurement means that it has the potential to positively impact global efforts to combat climate change. According to the World Economic Forum, public procurement is directly or indirectly responsible for 15% of global greenhouse gas emissions.
Around 70% of that comes from the activities of just six industries:
- Defence and security
- Transport
- Waste management
- Construction
- Industrial products
- Facilities management.
How can buyers increase sustainability in procurement?
The UK government is pledging to stop buying from suppliers that could negatively affect their carbon reduction commitments. As a result, suppliers that are dedicated to fighting climate change will have an advantage when tendering for work.
Another way that organisations can increase sustainability in procurement is to produce a sustainable procurement strategy. This will help buyers to focus their procurement processes on fighting climate change and reducing carbon emissions.
How to produce a sustainable procurement strategy
Your sustainable procurement strategy will depend on many factors, such as the goods or services you’re procuring.
However, this would typically include ways to:
- Optimise the use of natural resources
- Effectively manage supply chain waste
- Manage the delivery of goods and services
- Effectively manage the organisation’s carbon impact
- Raise awareness of sustainability
- Consider ethical factors, such as a living wage.
When purchasing goods and services, you should consider the following:
- Is the purchase necessary?
- Does the product use unsustainable materials?
- Can you and the supplier find ways to reduce packaging?
- How will the product help to reduce energy consumption?
- Are there any local suppliers who can deliver the product or service?
- Do any of the suppliers demonstrate ethical trading practices, such as the living wage compliance?
Are there any challenges?
When producing a sustainable procurement strategy, there are certain challenges that buyers are likely to encounter. Firstly, one of the biggest challenges will be the increased costs for buyers. To reach net-zero emissions, procurement costs could increase by up to 6%.
As a result of these heightened costs, competition between sustainable procurement and other governmental priorities will increase. This could impact public services such as healthcare and education.
In summary
Sustainable procurement is the process of procuring goods and services in a way that benefits society and the economy. Therefore, a sustainable procurement strategy should consider environmental, social, and economic factors. This could be anything from worker’s rights and fair pay to water use and recycling activities.
Organisations need to develop a sustainable procurement strategy to help combat carbon emissions and climate change. According to the World Economic Forum, 15% of global greenhouse gas emissions stems from procurement activities. Of that 15%, 70% can be traced back to the following industries:
- Defence and security
- Transport
- Waste management
- Construction
- Industrial products
- Facilities management.
As a result of this, buyers should aim to increase sustainable procurement practices in their organisations. For example, the UK government has pledged to stop buying from suppliers that could damage their commitments to carbon reduction.
Finally, there are many factors that buyers should consider when purchasing goods and services. For example, ask yourself if the purchase is actually necessary, or consider buying from local suppliers.
How can Hudson Procure help your business?
At Hudson Procure, our procurement experts have nearly two decades of experience. No matter what kind of support you’re looking for, we can help.
Procure Consult
With Procure Consult, we offer support with tender management and ad-hoc procurement consultancy. Our expert team will manage the end-to-end procurement process or offer assistance with any stage, as and when required.
Procure Health Check
With Procure Health Check, we’ll conduct a full review of the strategic and operational procurement processes within your organisation. We’ll identify the areas that need improvement and help you drive greater value from the procurement process.
Procure Analyse
The purpose of Procure Analyse is to conduct a high-level analysis of your spending activity. We’ll help you understand your current purchasing behaviour and highlight areas that can deliver greater value. Procure Analyse is also offered as part of Procure Health Check or as a standalone service.
Procure Outsourcing
With Procure Outsourcing, we deliver a range of procurement solutions on an outsourced basis, completely bespoke to you. This can range from delivering multiple tender projects as a package to delivering the full procurement function of your organisation.
Procure Post
Are you trying to find a supplier for your project? Post your tendering opportunity onto any of our 11 sector-specific portals for FREE with Procure Post!
Housed by our sister company, Hudson Discover, our portals host thousands of tendering opportunities for organisations of all sizes. For an additional cost, we’ll even help you identify your requirements and find the most suitable suppliers for your business.
Get in touch for a consultation and find out how we can help your business grow.
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