Sustainable Procurement Practice: Shaun Mccarthy

Action Sustainability
Inspiring sustainable procurement
Sustainable Procurement
Practice
Shaun McCarthy
Director
Action sustainability
www.actionsustainability.com
shaun_mccarthy@harg.demon.co.uk
Practice
Welcome
This presentation is about…

 Who?
 What?
 Why?
 When?
 How?
 Where?
 Some controversial stuff
 The future
Who – Action Sustainability…?
Action Sustainability is a social enterprise set up to lead and

inspire sustainable procurement.
How…? Who…?
We are a not for profit social enterprise registered as We support and facilitate the Strategic Supply Chain
Community Interest Company. We manage events Group, a leading authority on sustainable
and seminars to promote more sustainable procurement. We aim to extend the boundaries of
business. We also offer specialist expertise and best practice in this area and advise organisations
services to public and private sector organisations and government on sustainable procurement policy
interested in improving the impact of their supply and strategy.
chain on society.
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 sustainable

procurement.
To lead and inspire good sustainable To extend the boundaries of best

business practice practice
This is achieved through a series of promotion and Through research, benchmarking and thought
awareness events, often working with member leadership in sustainable procurement. To use our
organisations and other groups with an interest in influence with members and their supply chains to
this issue. 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
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
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…?
Employee Stakeholder
expectations Brand demands
Customer
Benchmarking
requirements
Sustainable Licence to
Reputation Procurement
Operate
Risk Legislation &

management Standards
Performance
Business Impact Reduction
efficiencies (environmental)
Why – Private Sector…?

BAA Stakeholder Survey 2003
Q13. To what extent does a sustainable development approach
make growth more acceptable?
0 20 40 60 80 100
Business Partners
Passenger Reps
Business Orgs
Employee Reps
Suppliers
Gov’t Agencies
Retailers
Media
Community Reps
MPs, MEPs
Local Authorities
Pressure Groups
Why – Private Sector…?

When…?
Better make it soon then……..

How…?
What organisations do
UK Government Respond to Make/deliver Buy stuff Account for

4 Priorities customer needs stuff stuff
Sustainable Sustainable Waste minimisation Demand Business planning

Production & products Environmental management
Responsible impact Inventory
Consumption management
marketing
(more for less) Life cycle cost
Efficient products Energy efficient “Green” energy CO2 reporting

Consumer delivery procurement Emissions trading,
Climate change
information Energy services Energy conservation CCL etc.
and Energy
Natural Resource Manufacturing Materials use Reporting (triple

Efficient products
efficiency Environment impact bottom line)
& Env. Environmental
Services minimise of purchases
Enhancement impact
resource use
Community impact Community impact Ethical procurement Charitable donations

Sustainable Social implications Social implications Local suppliers Business ethics
Communities of products of products Community
partnerships
How…?
Buy stuff
Sustainable Demand
management
Production &
Inventory
“Green” energy
procurement
Climate change
Energy conservation
and Energy
Natural Resource Materials use

Environment impact
& Env.
of purchases
Enhancement
Ethical procurement
Sustainable Local suppliers
Community
Communities
partnerships
How…?
Buy stuff
Sustainable Demand
Production & management Hundreds of end users
Inventory
Hundreds of products
“Green” energy
procurement
Thousands of suppliers
Climate change
Energy conservation
and Energy
Countless 2nd, 3rd, 4th
tier suppliers
Natural Resource Materials use
Environment impact
& Env.
of purchases
Enhancement Tens of thousands of
transactions
Ethical procurement
Sustainable Local suppliers
Community
Communities
partnerships Big....Complex...
How - Organisation
Big Ticket Other Corporate
Corporate Environment Environment Responsibility
Responsibility •Noise •Biodiversity •Social
Board •Air Quality •Natural resources •Economic
•CO2/Energy •Contamination •Ethics
•Waste •Etc. •Etc.
BAA Example
Group Businesses
•Policy Policy advice
CAS •Strategy Areas of •External representation
Environment •Governance Expertise •Options
•Talent management •Analysis Strategy
•Policy Implementation advice •Long term
•Legislation •Sustainability
•Strategy framework • impacts
•Policy communication
•Performance reporting
Solutions
Sustainability Guidance •Sustainable
Team •Documents to inform •Performance
Translate outputs Supply Chain*

•SC and Capital processes Advice
•Hands on support
Deliver
Sustainable Facilities
Define knowledge
Learning & Development Capital* Solutions •Planning
•To achieve outputs •Solutions
•Upskilling project teams
Assurance
Process reviews Audit Corrective action
How – Process…?
Supplier
Identification of Specification qualification and
need appraisal
Financial
evaluation
Accounting:
whole life costing
Financial
review
Contract
management Tendering and
and review tender evaluation
Environmental Purchasing – guidance for organisations CIPS/IEMA/NHS PASA 2002

How - Process BAA Example
Description: Objectives : Relevant Policies
This process identifies the requirements needed for projects to deliver To define what needs to be done to deliver sustainable solutions with
facilities solutions that represent long term value and support BAA’s respect to: Management Policies
 Addressing the impact of a project;
aspirations, policies and standards with respect to Corporate Responsibility  Capital Sustainability Policy
 Responding to planning requirements;
(Sustainability). The process describes the responsibilities of a project,
 Managing reputational risk;
and highlights how sustainability impacts are to be managed.
 Addressing whole life costs; Technical Policies
 Assuring compliance with legal/BAA policy requirements; and
 N/A
 Delivering leading edge performance for priority issues.
Develop performance Define requirements in Report the level of

Define requirements in
Identify & relate relevant requirements in Options Scheme Brief & define Approve CEMP & performance achieved
Production Plan & produce
sustainability issues Brief scope of works for CEMP implement against the Brief's &
CEMP
CEMP
 Issue briefs  Approved Brief Decision  Approved Options  CEMP framework (via  Approved CEMP  Assurance outcomes
 AoE input (where Report Decision Report. Decision Model)  Targets/KPI’s  Target/KPI’s
appropriate – Big  Any planning/regulatory  Design Brief  Approved Scheme Design  Reconciliations
Ticket?) requirements  Project Execution Plan Brief
Inputs  Draft targets/KPI’s
A Development A Development Managers A Development Managers A Project Leaders A Project Leaders A Project Leaders
Primary Managers R Design Managers R Design Managers R Project Groups C Sustainability AoE C Sustainability AoE
Responsibilit C Project Groups C Project Groups C Project Groups C Sustainability AoE
e
C Sustainability AoE
ry
y (RACI) C Sustainability AoE C Sustainability AoE
vi c e
IT/
d l iv
 Decision Model  Decision Model  Decision Model  Decision Model  Decision Model  Decision Model
A De
Managemen
t System
Links
 List of relevant issues  Whole Life Cost factors  Scheme Design Brief  Production Plan  Implemented CEMP  Handover file
 Issues captured in captured capturing issues capturing issues  Self-Assurance checklist containing all relevant
Brief Decision Report  Draft Design Brief  Whole life cost report  Completed CEMP  Cost reconciliation of issues
 Proposed approaches capturing issues  Non conformances with  Approved targets/KPI’s planned versus actual for  Risk Register
for carbon intensity  Energy/CO2, waste & Materials Strategy  BREEAM data all sustainability cost highlighting any
Outputs included in Brief sensitive materials justified and approved lines residual risks
Decision Report. assessments for each  Completed energy/CO2  Knowledge capture
option & waste assessments
 Self-Assurance checklist
 List of relevant
construction activities
How - Process Develop performance
Define requirements in Define requirements in
BAA Example
Report the level of
Identify & relate relevant requirements in Options Approve CEMP & performance achieved
Scheme Brief & define Production Plan & produce
sustainability issues Brief implement against the Brief's &
scope of works for CEMP CEMP
CEMP
Establish the significant Review and develop the Define the issues into Establish the Production Seek approval for CEMP Assess the level of
sustainability issues and issues in detail and relate performance requirements requirements together with and identify the most performance achieved
relate them to the them to the proposed for the Scheme Brief. confirmed construction effective way of against the Brief's/CEMP
proposed approaches. options. Understand construction activities for CEMP implementation. and prepare information
approaches to scope the production. for the handover file.
activities for the CEMP.
Activity
Description
 Decide and agree the  Review in detail the  Re-affirm issues  Re-affirm issues  Assign CEMP  Report the level of
significant issues and agreed significant relevance and refine for relevance and refine for responsibilities in an performance achieved
opportunities relating to sustainability inclusion into Scheme inclusion into Production auditable framework. against the Brief's/Plans
approaches. issues/opportunities Brief. Brief.  Review sustainability cost  Extract notable learning
 Understand the carbon highlighted and develop  Update Risk Plan/Form.  Produce CEMP. lines. and place it into the
intensity of approaches them into performance  Define Whole Life Cost  Update Risk Form.  Meter energy sustainability learning
together with high level requirements for Design factors, including end of consumption during file.
 Fix targets and KPI’s.
renewables opportunities Brief. life costs in model. project and capitalise.  Prepare handover file
 Ensure costs include all
 Ensure significant
Engage where necessary  Work up business cases of all the relevant
sustainability issues (e.g.  Measure waste

sustainability AoE input. issues/opportunities are information required for

for potential renewables energy, waste, disposal). generation.
included in Risk release throughout the
use and energy efficiency  Confirm compliance with
workshop. opportunities. business.
c e
 Include input from any
i
 Develop draft
Materials Strategy or
agree any concessions.
ry
 Measure energy in use
Activities
v
Environmental Impact energy/CO2 target.
i ve and feed into post
d
Assessment (EIA) or project review and
l
 Include Materials
other planning
A De
Strategy requirements. airports business plan.
requirements/conditions.  Review whole life cost
 Estimate waste
 Develop outline Whole
model assumptions,
Life Cost factors using generation and any
capture benchmarking
benchmarks. hazardous waste issues.
data and feedback.
Mandatory QMS Procedures: detail the Understand Materials
QMSand :
 Prepare a list of
Standard Forms list the standard forms :
Checklists list the checklists that should be referenced.
Waste issues. that should be construction activities for
procedures that must be adhered to used in support of the procedures.
CEMP.
 Develop energy/CO2
assessments for options.
 Issue Briefs  How to doc’s  Decision Model  Justification Report  Decision Model  Decision Model
Templates  Decision Model  Decision Model  Decision Model
 CEMP Template
How - Risk…?
What is risk...........?
The really bad stuff that

happens if you don’t do
something about it
Shaun McCarthy 2006

How - Risk…?
L/H = M M/H = H H/H = H
High
L/M = L M/M = M H/M = H

Impact
L/L = L M/L = L H/L = M

Low
Likelihood High
How - Risk…?
High Treat Terminate Terminate
Tolerate Treat Terminate

Impact
Low Tolerate Tolerate Treat
Likelihood High
How – To get started…?

management commitment sustainable procurement
strategy and policy
Procurement,
Environment/
Energy/ Business
Improvement
Estates/ Team sustainable procurement
Waste
risk risk assessment
manager
budget
holders sustainable procurement
specifiers users
risk management
customers
finance
(adapted from slides courtesy of NHS PASA)
How – will it turn out…?

BAA Example
Noise Air Climate Surface Water Local Human
Quality Change Access quality suppliers rights Biod. Waste Materials
Cleaning
Coaching
Baggage
systems
Construction
Architect
Consider your impact on specific issues – not “one size fits all”
How – will it turn out…?

NHS Example
pharmaceuticals clinical waste

cleaning materials medical consumables
employment agency patient transport
services catering services
energy
uniforms
stationery office furniture
Environmental signage
Risk
Profile
How – Do you know…?

BITC Index www.bitc.org.uk
How – Do you know…?

Lead
Flexible framework
Enhance
Practice
Embed
Foundation
Time
Benchmarking how well you are addressing your sustainability issues
against how well others are addressing theirs
www.actionsustainability.com, shaun_mccarthy@harg.demon.co.uk
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 Quality
This one day programme provides procurement and The course is referenced in the Government’s 2006
environment professionals with the capability and strategy “Procuring the Future”. This will be the only
confidence to understand and exploit the benefits of programme of it’s type to be accredited by the
procuring effectively and responsibly. This is a Chartered Institute of Purchasing and Supply
practical seminar with expert coaching and case
www.cips.org and the Institute of Environment
studies.
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, shaun_mccarthy@harg.demon.co.uk
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
Practice
Thank you

Sustainable Procurement Practice: Shaun Mccarthy

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Action Sustainability

Inspiring sustainable procurement

This presentation is about…

Who – Action Sustainability…?

Action Sustainability is a social enterprise set up to lead and

Who – Strategic Supply Chain Group

To lead and inspire sustainable

To lead and inspire good sustainable To extend the boundaries of best

To act as the primary source of advice and guidance to government policy

Who – Shaun McCarthy…?

What – Sustainable Procurement…?

Sir Neville Sims Definition

“Using procurement to support

Task force findings – not UK Government Policy

Risk Legislation &

Why – Private Sector…?

Why – Private Sector…?

Better make it soon then……..

UK Government Respond to Make/deliver Buy stuff Account for

Sustainable Sustainable Waste minimisation Demand Business planning

Efficient products Energy efficient “Green” energy CO2 reporting

Natural Resource Manufacturing Materials use Reporting (triple

Community impact Community impact Ethical procurement Charitable donations

Natural Resource Materials use

Translate outputs Supply Chain*

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

Develop performance Define requirements in Report the level of

sustainability AoE input. issues/opportunities are information required for

i ve and feed into post

assessments for options.

The really bad stuff that

Shaun McCarthy 2006

L/M = L M/M = M H/M = H

L/L = L M/L = L H/L = M

High Treat Terminate Terminate

Tolerate Treat Terminate

Low Tolerate Tolerate Treat

How – To get started…?

How – will it turn out…?

How – will it turn out…?

pharmaceuticals clinical waste

How – Do you know…?

How – Do you know…?

How – To measure benefits…?

Where – To get help…?

Where – to get training…?

Some controversial stuff

Some controversial stuff

Some controversial stuff

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