|20th March 2023||Member Update|
Author: Leigh Kopec, Head of SUPC
Whether directed by public legislation or organically shaped by an organisation’s internal and external stakeholders, sustainability is a critical component of strategic thinking and touches all sectors.
Terms such as sustainable procurement, green procurement, Environmental, Social and Governance (ESG) or Corporate Social Responsibility (CSR)-focused procurement, procurement with purpose, and responsible procurement all seem to be used interchangeably. Put simply, they all refer to integrating responsible business practices and sustainable corporate behaviour into the procurement processes, decisions, and policies.
Almost all universities have made the commitment to Net Zero Carbon. This provides a challenge to procurement teams: ‘greener’ often means ‘more expensive’, so how do procurement teams balance financial value against environmental value?
With growing financial challenges that make it harder to simply survive for some, can universities afford to spend the time and resources to focus on environmental sustainability? Can they afford not to?
Why does Sustainability matter?
Procurement is key to sustainable value creation. We’re able to look at the environmental, social and economic impacts of an organisation’s products or services over their whole lifecycle. Some of the greatest opportunities for an organisation (often up to 80%) for impact occur downstream in the supply chain. Moving the focus beyond just risk mitigation to embracing sustainability initiatives that drive positive longer-term impact could unlock new opportunities and create measurable value. Data, such as the Sustainable Procurement Barometer, are repeatedly showing that organisations who are committing more fully to sustainable procurement practice are benefiting across a range of factors including increased resilience, sales, talent attraction, innovation and risk mitigation.
We are all becoming increasingly aware of their societal impact. Thus, their concern about how purchasing affects the environment is increasing. It is therefore ever more crucial that institutions reduce their carbon footprint to help combat climate change and demonstrate a clear commitment to high social values in order to attract and retain staff and students.
How does this relate to universities in practice?
Our old favourite, the Pareto principle, is an area of focus here. For most institutions there will be a select number of activities that, when given greater focus, can achieve a significant return on investment. There are some excellent examples of sustainable procurement strategies I have seen across the HE sector, which rightly focus on energy usage, travel, food and waste, with clear guidelines built into their policies and procurement practices. Whether the impact of these is then measured is less clear. In a thought-provoking keynote speech at the recent SUMS Annual Conference, Professor Craig Mahoney highlighted benchmarks like the University People and Planet league tables. This measures universities against sustainability and ethics criteria, which puts further pressure on universities to demonstrate action to remain competitive.
The focus area most visible in the sector is the environmental one around carbon emissions and a drive towards Net Zero (with most universities committing to achieving this goal ahead of the government mandate). Many universities are getting a grasp on Scope 1 and 2 emissions. More difficult to understand, and yet significantly more impactful on CO2 emissions is Scope 3. Without supply chains clearly mapped out and a deep understanding of suppliers through the tiers of these supply chains and their activities, can we ever get a good grasp on this area of emissions? For most it remains in the ‘too difficult’ box. This is something explored further in our recent SUMS thought piece Making Strides to Net Zero.
Very few universities can afford specialist responsible procurement roles within their teams and so developing the knowledge and expertise for implementing good practice usually falls to those with wider role responsibilities. This also means opportunities are often missed and capacity isn’t there to properly influence business stakeholders and measure results. This further exacerbates the need for universities to come together as a sector and share best practice, case studies and ideas for collaboration.
How procurement can help at all levels
Procurement is uniquely positioned within organisations to have a good view across all operations, both internal and through those delivered by supply partners, and is therefore well placed to influence and impact decisions across this breadth.
For public sector buyers operating within the public procurement regulations, there is legislation to adhere to as well as support and advice available, including mandatory government buying standards that set out minimum standards, and ‘questions to ask’ across a range of product and service categories.
Procurement managers should challenge themselves on not asking questions for the sake of it and making responsible procurement sections within tenders that equate to much more than a box-ticking exercise. Peter Smith (author of Procurement with Purpose) is going to be a guest speaker at the UKUPC Conference in September. He rightly questions where organisations are taking approaches such as requesting carbon reduction plans from suppliers as part of policy. Is this to drive genuine change or is it “performative” – being seen to do something? An interesting question that I think will resonate with many universities considering their environmental and social approaches to procurement.
How can SUPC help my institution?
At SUPC we have partnered with EAUC to support our responsible procurement (RP) initiatives including embedding RP into our own procurement activity, as evidenced by the robust sustainability metrics now in place as part of our recently launched Servers, Storage and Solutions Agreement (SSSNA). Responsible procurement is also a core theme measured by our revamped Procurement Maturity Assessment, which universities can use to assess and benchmark their own procurement maturity. At SUPC we host a regular Responsible Procurement Group for our members, in collaboration with the London Universities Purchasing Consortium (LUPC) to share knowledge and open discussion around hot topics. In response to the growing interest and demands around sustainability, our sister company, SUMS Consulting, has now launched a Sustainability Services offer, with tailored modules to support specific needs of our members. From better understanding scope 1, 2 or 3 emissions with associated action plans for reduction, to improved understanding of the environmental impact of your university’s estates and travel activities, or better collection and use of data to inform decision-making.
If you’d like to find out more about how SUMS / SUPC can support your organisation in any aspect of your sustainability journey, contact us.