Cheltenham Borough Council

Sustainable procurement guidance

Aim of this guidance

This guidance document, aims to introduce the theory and practice of sustainable purchasing to all those involved in the procurement of goods and services at the council.

It should be referred to as a guide and signposting document to be used in drafting contract specifications decisions

What is sustainable procurement?

Sustainable procurement is about minimising the environmental and social impact of the purchases an individual or organisation makes.

“Sustainable procurement is all about taking environmental and social factors into account in procurement decisions. It’s about looking at what your products are made of, where they come from and who has made them. It’s even about looking at whether you need to make the purchase at all. If you consider all these factors, you can make better choices about what you buy, who you buy it from and how often you buy it.”

What are the impacts of your procurement choice?

Environmental impacts

The extraction and processing of finite resources such as wood, oil and coal, the use of energy and water, transportation and the production of waste causes a wide range of environmental impacts such as:

  • climate change
  • land and water pollution
  • reduction in habitats and species
  • loss of natural resources
  • ozone depletion, and
  • reduction in local air quality.

If everyone on the planet consumed as much as the average UK citizen we'd need three planets to support us.

Social impacts

The extraction, manufacture and distribution of goods are also linked to a wide range of social issues such as:

  • fair wages;
  • minimum standard of working conditions; and
  • child labour.

Many people in the developing world that produce our everyday products do not earn enough to afford the basic necessities such as clean water, comfortable shelter and education for their children.

Many dairy farmers in the UK are now going out of business because they are earning less money than it takes to produce their milk.

Why should we procure more sustainably?

UK government goals and objectives

Sustainable procurement has been identified as a key area in which the UK can meet government objectives on sustainable development. The public sector spends £150bn a year or around 13% of the UK GDP.

The UK Government’s 2005 Sustainable Development Strategy set the goal to make the UK a leader in sustainable procurement within the EU by 2009. In 2006, The Sustainable Procurement Task Force produced ‘Procuring the Future’ to set out how the objective could be delivered. A major focus of this was a Flexible Framework to guide public sector organisations (including universities) to make sustainable procurement happen. It allows organisations to assess the quality of its procurement activities and gives a clear route map to better performance. The Task Force recommends that public sector organisations should be at Level One on their Flexible Framework by April 2007 and at Level Three by April 2009, for the 2009 goal to be met.

In response to the Sustainable Procurement Task Force, the UK Government Sustainable Procurement Action Plan was published in March 2007. This encouraged this use of the Framework and a wide range of plans to improve Governmental Department Purchasing Practice, to lead by example.

.Future generations will neither excuse us nor forgive us for ignoring the signals that we can see today…But if the latest sustainability strategy, Securing the Future, is driven forward with determination and the government's huge spending power is harnessed as recommended in this report and if the first steps are taken now, right now, future generations will have much to thank our leaders for.”
Sir Neville Simms, Chairman of the SPTF

Cheltenham Borough Council commitments

The council’s business plan includes the ambition to integrate sustainability issues into all its procurement decisions by achieving the requirements of the Sustainable Procurement Taskforce Flexible framework by achieving level 3 by 2010.

Business benefits of sustainable procurement

Sustainable procurement is simply good procurement practice. It can provide a wide range of business benefits, including:

  • reducing and managing risk
  • improved procurement practice
  • legislative compliance
  • increased direction of management focus
  • improved best value selection of products and services
  • fulfilment of current council policies
  • social and economic benefits in the local community
  • increased resource efficiency
  • cost savings
  • opportunities to enhance corporate image

How can you reduce the environmental and social impact of products you buy on behalf of the council?

There is a wide range of ways that employees involved in procurement and contract management can improve sustainable procurement practice at the council. These include:

  • procurement on the basis of need and environmental impact assessment.
  • taking into account the whole life costs of a product.
  • choosing sustainably marked or ‘eco-label’ products.
  • integrating environmental requirements into specifications.
  • managing contracts for continual environmental improvement.

Assessing need and reducing consumption

In procuring goods and services, the need for the product and the environmental impact of the product should be assessed. Preference should be on improving efficiency of use and on low environmental impact products, wherever possible.

In procuring goods and services you should consider the following questions either for yourself or for the person asking you to place an order:

  • Why does your department need this product or service? – Is it vital to the performance of a department or task? Could the need be met through existing products or equipment in the department?
  • Can the need be met another way?
  • Is a suitable product available elsewhere in the council?
  • Can the requirement be met by renting, sharing or hiring rather than procurement? – is there similar equipment in the council that you use?
  • Is the quantity requested essential? – are you buying too much just because it is cheaper to buy in bulk?
  • Is the specification currently being used the correct one for the purpose? – do you need a piece of equipment that has lots of extra functions?

Remember that it is ok to ask questions and make alternative suggestions if you are being asked to purchase something on somebody else’s behalf. Exercise assertiveness with diplomacy!

Assessing and reducing environmental and social impacts

When purchasing goods and services, the financial should not be the only consideration. It is council policy to choose the most ‘economically advantageous option’ i.e. the best value. The Whole Life Costs (WLC) of a product should be considered. This covers aspects such as functionality and product efficiency during the lifetime. You need to think about the environmental and social impact of the:

  • use of natural resources;
  • manufacture;
  • distribution and delivery;
  • operating costs including energy, water usage and maintenance; and
  • end of life costs including decommissioning and disposal.

Remember to look out for Eco-labels. These are products that have a special symbol that show the sustainability of a product.

The European Eco-label has been developed by the European Union to encourage the development of products which keep the impact on the environment to a minimum. It is a voluntary scheme and the 'flower' symbol is awarded to products that meet a set of stringent environmental and performance criteria. These criteria take into account all aspects of a product's life, from its production and use to its eventual disposal (cradle-to-grave approach). About 400 products - from washing machines to footwear - currently carry the label. Packaging is included in this life cycle analysis where it is integral to the product, such as washing up liquid or laundry detergents.

Use of natural resources:

The extraction and processing of raw materials such as wood, stone, minerals or chemicals, etc, that go into our products, generally means the depletion of non-renewable resources, generation of polluting emissions to air and water, and the use of energy (itself dependent on extraction and burning of fossil fuel). Many of these raw materials are located in remote areas of the world or areas of outstanding beauty, some of which contain rare species or are valued for the diversity of their flora and fauna. Where extraction and processing takes place in the developing world there may also be issues about working conditions.

What can you do? Ask your supplier for:

  • A sustainability or corporate social responsibility statement to ensure their operations are ethically sound and they are working to minimise their impact on the environment
  • Products that have maximum durability, reparability, reusability and upgradeability. A long-life product will cost less, financially and environmentally.
  • Products made of recycled materials. The higher the percentage of recycled material (also known as post-consumer waste) the better.
  • products from sustainable sources such as Forest Stewardship Council wood and paper products.
  • Minimum use of packaging that makes use of recycled or biodegradable material.
  • Ethically produced products such as ‘Fairtrade’ products

Look out for the following symbols

This is the label of the Forest Stewardship Council. Any product produced from wood, including paper can be accredited by the FSC. If a product displays the FSC label it would have been certified by the organisation as coming from a responsibly managed forest, where the harvest of timber and non-timber products maintains the forest's biodiversity, productivity and ecological processes.

This symbol denotes an object contains x% of recycled material. It may be used without specifying the % of recycled materials it uses.

Fairtrade products guarantee a better deal for producers in the developing world. It ensures:

•A price that covers producer’s costs.

•A premium for producers to invest in their communities –clean water, healthcare, education, the environment.

•Long-term and more direct trading relations.

A new symbol found on biodegradable plastic packaging. The symbol signifies that the packaging has been tested, and is suitable for putting into home or local authority composting systems.

United Kingdom Cartridge Recycling Association - This symbol indicates that certain environmental criteria for toner cartridge recycling have been met.

National Association of Paper Merchants - To be given this mark, paper or board must be made from a minimum of 75% genuine waste paper and / or board fibre, no part of which should contain mill produced waste fibre.

Recyclable aluminium

Recyclable steel

Recyclable plastic. This symbol indicates a type of plastic called Polyethylene Terepthalate.

Manufacture : The manufacture of products requires the use of energy and water and produces waste. It can also involve the emission of pollutants such as as ozone, volatile organic compounds (VOCs), CO2, NOx and SOx. Where products are manufactured in the developing world there may also be issues about working conditions.

What can you do? Give preference to companies that are actively reducing the environmental and social impact of their manufacturing processes. Such companies will have:

  • an environmental policy and/or corporate social responsibility policy? and named person to implement this.
  • An environmental management system that will probably be certified by either ISO14001 or EMAS.

Distribution and delivery: Goods are usually distributed to the end user (individual consumers or other companies) by road, rail, sea or air. Increasing globalisation means that these journeys can be thousands of miles long , with components for a particular product coming from all corners of the globe. The use of fuel for transportation results in the production of greenhouse gasses such as carbon dioxide that lead to climate change, and other pollutants. It also requires the building of roads and associated infrastructure and the manufacture of vehicles, etc. This all puts a strain on the environment through loss of natural resources, wildlife habitats and pollution.

What can you do? Do your best to reduce the miles that your products travel:

  • Choose products that are produced nearer to home.
  • Place larger orders so fewer deliveries are required.
  • Try to avoid procuring products that have been transported by air.

Operating costs: For many products, the most significant environmental impact occurs during their operation or use. This is particularly the case for those products which require the use of energy (electricity, gas or petrol). Energy use is associated with the production of carbon dioxide and other pollutants that cause environmental and health impacts.

What can you do? Choose products that will use less energy and will be less polluting to the natural environment: Ask your supplying company for:

  • At least A-rated energy efficient appliances (A++ are now the best available)
  • Products with minimal use of toxic chemicals (e.g CFC’s, Ozone, Volatile Organic Compounds (VOC’s))

Look out for the following symbols

The EU energy label rates products from A++, (the most efficient) to G (the least efficient). By law, the label must be shown on all refrigeration and laundry appliances, dishwashers, electric ovens, air conditioners, lamps and light bulb packaging.

The Energy Saving Recommended logo given by the Energy Saving Trust identifies the most energy efficient products in their category.

Dangerous for the Environment- AVOID products marked with this symbol. It shows that it contains chemicals that may harm the environment.

Disposal: Disposing of waste through landfill is a waste of natural resources and it results in the production of greenhouse gases that cause climate change. Landfill sites are also becoming increasingly costly to use and are in short supply.

What can you do?

  • Reduce waste as much as possible by choosing reusable or repairable products instead of disposable ones.
  • Ensure that waste goods and their packaging are either reused or recycled.
  • Ensure that no hazardous waste is sent to landfill, this needs to be specially treated. Hazardous waste includes batteries, electrical equipment and products containing any chemicals that may be toxic or harmful.

Some other Eco- labels

Integrating environmental requirements into specifications

Environmental criteria can be applied in the award of contracts. For this to be effective the contract award criteria need to be set at an early stage. You need to follow EU purchasing guidelines in relation to environmental issues.

Under European Community Law you can:

  • Define the subject matter of a contract in relation to environmental issues.
  • Include environmental issues in best value for money considerations or ‘economically most advantageous’ options.
  • Adopt a whole life costing approach in the preparation of award criteria to improve the environmental position.
  • Give organisations preference and award criteria on environmental performance providing it relates to the subject area and technical specification (performance based or functional). Criteria can be awarded in the same way as any other technical specification.
  • Specify any relevant environmental production methods and materials.
  • Use eco-label or Environmental Management System standards when defining technical requirements.
  • Take into account production methods and materials in relation to environmental issues in the technical specification.
  • Exclude companies that have acted against environmental legislation or regulation.
  • Select suppliers and set environmental criteria on the basis of environmental technical competence.
  • Include environmental considerations in the contract performance clauses such as the way goods are transported, waste disposal and staff training and competency.

Under European Community Law you must:

  • Provide equal opportunities and act fairly.
  • Only include specifications in relation to the subject matter.
  • State the award of criteria on environmental issues in tender documents, as any other.
  • Use criteria that are specific and objectively quantifiable. All reasonably well-informed tenderers of normal diligence should interpret them in the same way.
  • Respect all standard EC Laws.

Under European Community Law you cannot:

  • Set requirements for companies to have a specific eco-label or environmental management system. Although these may prove the ability to fulfil technical specifications.
  • Ask for anything that does not relate to the subject matter of the contract.
  • Confer unrestricted freedom of choice.

Pre-qualification

During the pre-qualification process you should assess the potential suppliers of goods and services to ensure they meet the council’s requirements of the procurement strategy and any subsequent policies.

In formulating your pre-qualification questions, consider the following:

  • A systematic approach to the management of environmental and social issues (e.g. through the use of ISO 14001, EMAS, BS8555, SA8000).
  • An Environmental or Sustainability Policy – this should have top management commitment and a commitment to continuous improvement.
  • A commitment to publishing a CSR or sustainability report.
  • Records of Health, Safety and Environmental incidents.

The following are indicators that companies do not take CSR seriously:

  • Use of vague statements e.g. “we comply with all relevant regulations”.
  • Concentration on peripheral issues – e.g. overemphasis on community involvement and charitable giving.
  • Lack of transparency – no published CSR or sustainability report.

Buy Sustainable - Quick Wins

The Government’s 'Buy Sustainable - Quick Wins' list is specifically designed for procurers. It is a set of sustainable standards for a range of commonly-purchased products, such as IT equipment, white goods, paper, etc. The products assessed were chosen for their environmental/financial impact, scope for environmental improvement and political or example-setting function. The council will endeavour to use these useful standards in its procurements of goods.