To drive sustainability, we need to harness the power of procurement
Across real estate, infrastructure and natural resource sectors, the importance of sustainability has been moving up the priority list for many years – not just based on the outcome of a project, but how we get there too. From biodiversity and energy efficiency considerations to broader social value, there have been great strides in awareness, but inconsistency remains in translating this into action.
The upcoming COP27 summit will return climate to the forefront of our minds, amidst an increasingly complex set of domestic and international challenges from economic headwinds to the ongoing conflict in Ukraine. Sustainability objectives will only be met if industries fully consider these wider pressures.
For the built environment, a key enabler for net-zero ambitions, harnessing the power of procurement is critical. Though it is often overlooked as a driver of real change, taking the right approach to sustainable procurement can help clients embed sustainability into their programmes, projects, and established supply chains from day one. There are five key points clients need to understand about making the most of the function to deliver sustainability and social value targets, which underpin our own sustainable procurement service.
1. Build confidence with digital tools for a sustainable supply chain
To boost sustainability in construction, we need to look holistically across the supply chain – from the first designs by architects through to the pouring of foundations, material selection and manufacture. Procurement is the golden thread that brings the supply chain together, and it is here that the potential lies for real and immediate progress.
By embedding sustainability principles across the supply chain and across the life cycle of the project from the very earliest stages, clients can gain confidence that the supply chain appointment can support them in the delivery of their net-zero ambitions.
To do this, there is no shortage of digital tools now available to enable the design, procurement, and delivery of construction programmes. Vendor and solution selection has never been more important. Nor has the system thinking needed to bring these capabilities to bear onto major programmes, delivering social value as well as better environmental and economic outcomes.
The processing power of the software tools we now have was once unthinkable, and programme teams should use them to establish a multi-dimensional, digital environment right from the start, in which not just sustainability, but also performance, commercial and impact metrics are agreed and standardised.
2. Understand and outperform programme baselines
Every supplier and client have scope to improve their sustainability performance and sharing this responsibility in a practical and achievable way requires a proper assessment and understanding. Setting the right deliverable targets is key.
Our own sustainable procurement service includes a bespoke assessment tool which establishes relevant baselines, as well as an action plan for implementation across the supply chain. This process must be proactive and adaptive as technology advances and even evolves. We must also challenge clients and contractors to go above and beyond to outperform programme targets, with measurement of results over a sustained period and beyond the life cycle of a single project.
Exceeding the programme baseline is exemplified in our current role as sustainable procurement lead at Heathrow Airport. As one of the world’s busiest airports, Heathrow has an ambitious sustainability strategy which targets more sustainable outcomes across its entire business – including its supply chain.
Our team has developed a new ‘balanced scorecard’ – with Heathrow’s sustainable objectives at its heart – to tangibly measure supplier performance against Heathrow’s sustainability vision, and to incentivise performance above the baseline through a series of metrics and a gold / silver / bronze scoring.
Beyond the scorecard’s role as pivotal new supplier management tool, it helps to clearly communicate to the supply chain Heathrow’s ambitions around carbon and social value which will play a key role in future contract awards.
3. Stay ahead of the curve and pre-empt regulatory reform
For those investing in sustainable procurement today, there is an opportunity to get ahead of the competition.
Public contracts already include criteria on social value and sustainability and work on the Procurement Bill, expected to come into effect in 2023, is due to place an even greater emphasis on ‘public benefit’ as well as traditional value for money when awarding tenders.
It is important that the industry steps up to meet current legislative, investor expectations and continues to scan the horizon to assess and pre-empt future developments.
4. Think holistically about sustainability
This procurement methodology should also be applied across the much broader area of social value.
The construction sector and Government are aware of the interconnections between environmental and socio-economic value – and joined up action has been taken.
In 2021, The Construction Innovation Hub brought together the views of over 200 industry and Government experts (including contributions from our business) to produce its Value Toolkit. This aimed to redefine traditional ideas of ‘value’ to include social, environmental, and economic outcomes – and to find robust ways to measure it.
It is about reassessing how we look at ‘successful’ outcomes of projects and procurement.
One often overlooked part of improving social value may be, for example, prioritising local supply chains and small businesses – helping build local talent and support growing businesses. Thinking this way can help the climate, but it also has an important role to play in tackling wider social issues including deep-rooted regional inequalities where construction has a positive role to play.
5. Embed sustainable practices in existing chains
Delaying isn’t an option. Sustainable procurement and sustainable improvements need not be limited to future projects or procurement strategies. We can embed the principles with existing partners too.
The industry knows the transformative power that construction and the built environment can bring. It’s now time to fully recognise the role procurement plays within this, to be bold in setting new, ambitious targets, and to initiate vital early conversations and procedures across our supply chains.
Download our guidance to sustainable procurement.