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Sustainable procurement: a powerful tool for net zero

18 Apr 2023


Nearly two thirds of councils in England have pledged to become carbon neutral before the Government’s 2050 net zero ambition1. A key element of this is for councils to reduce carbon emissions from their own operations. In the race to achieve this, many authorities have focused on reducing their scope 1 and 2 emissions, which mainly come from their own buildings and vehicles. However, scope 3 emissions could offer the biggest gains yet. 

Ricardo’s net zero analysis for local authorities has shown that scope 3 emissions can account for up to 90% of a council’s greenhouse gas emissions, with most of this coming from purchased goods and services. Hence sustainable procurement to decarbonise their value chain can be one of the most powerful tools at a local authority’s disposal. It is also a great way for local authorities to show leadership by example to other businesses and organisations in their local area on decarbonising supply chains.

What is sustainable procurement and why is it important for local authorities?

Sustainable procurement is the process in which an organisation makes conscious purchasing decisions that factor in environmental and social factors such as climate impact and community benefits, alongside balancing cost, quality and risks inherent to their supply chain. 

Sustainability criteria might vary from one organisation to the other, depending on their strategic priorities, sector, and targets.

Sustainable procurement is an essential element for local authorities to deliver net zero commitments and provides important local benefits. Working towards carbon neutrality, whilst also influencing and supporting local suppliers to do so is a win-win process that, by replication, accelerates the overarching ability to reach targets at a local level. By not encouraging sustainable procurement, councils may lack visibility of potential risks throughout their supply chain, like reputational damage and environmental footprint increases. Conversely, this could also mean missing potential opportunities for innovation, local growth and social inclusion.

How can you get started with sustainable procurement?

First, it is important to determine the key programmatic activities (social housing, waste management, etc) that will be delivered by the council and its net zero objectives. 

Next, it is essential to determine how the different procurement categories are currently managed within the procurement function, and the potential for decarbonisation both in terms of the category itself and in terms of market maturity and availability.

Some of the questions a council may need to ask include: What am I purchasing? Are there alternative/carbon-neutral solutions available on the market? Is the market for goods and services within this category highly competitive? Is my purchasing power as a client large enough to influence change?

The result of this process will determine the decarbonisation priorities within your procurement portfolio. Using this approach, Ricardo regularly works with councils to understand their priorities and further refresh them in future, as needed. 

What do local authorities need to consider in delivering sustainable procurement?

First and foremost, leadership engagement is paramount. Sustainable procurement shouldn’t be delivered as a standalone piece of work, but as part of an overarching commitment to deliver net zero within the council.
While buyers and stakeholders need to be equipped to make better purchasing decisions, suppliers also need support in this effort: transition takes time, and councils need to onboard their suppliers in that effort, setting appropriate objectives in line with their suppliers’ operational maturity and capacity to innovate.

Finally, implementing supportive processes and systems are critical in delivering net zero commitments as efficiently and smoothly as possible. Any authority that is serious about practising sustainable procurement needs to carefully examine its supply chain operations and the tools it uses, as much as how supplier relationships and performance are assessed to ensure its practices are as sustainable as possible.

How are others embedding sustainable procurement?

Informed by technical experience, we have developed a proven approach to the planning and delivery of a successful sustainable procurement strategy. Our experts employ a robust framework for embedding sustainability within organisations, whereby each step of the process carefully identifies the different drivers, opportunities and areas of improvement for procurement and supply chain. 

After identifying that over 80% of its carbon emissions stemmed from the Council’s scope 3 purchased goods and services, Mid Sussex District Council wanted to implement sustainable procurement mechanisms to reduce emissions from its supply chain. To support the Council in its ambitions, Ricardo provided support to reduce emissions arising from the procurement of goods and services across future contracts and ensure the procurement strategy aligned with the council’s net zero commitment.  

We undertook a spend analysis to help the council understand the emissions linked to purchasing and prioritise efforts towards reducing carbon emissions through future contracting, including the identification of short, medium and long-term priority products and services.

Finally, recommendations were made to assist the council’s procurement and commissioning teams to embed low carbon principles across future tendering exercises. As a result of implementing these measures, the council now anticipates a significant reduction in carbon emissions within the next 10 years.

From procurement strategy and governance to material management, Ricardo has extensive experience, knowledge and skills in delivering sustainable procurement support. Utilising our expertise, our team can work with you to tailor the right approach that fits your organisation’s needs, aspirations and desired results.

If you have any questions or want to discuss how Ricardo could help your organisation decarbonise its supply chain, get in touch.