Sustainable Procurement

Within Future Purchasing we consider sustainable procurement (covering environmental, social and economic value) to be a critical capability for our consulting teams and clients.

Whilst environmental and economic value have long been considered to a greater or lesser degree by public and private sector organisations, social value (such as tackling inequality) has primarily been the preserve of the public sector.

Through The Public Services (Social Value) Act which came into force on 31 January 2013 and more recently Procurement Policy Note 06/20 September 2020 Issue 1 the government requires those who commission public services to consider how they can also secure wider social, economic and environmental benefits. The policy note outlines the actions central government departments should undertake to explicitly evaluate Social Value where the requirements are related and proportionate to the subject-matter of the contract, indicating a minimum weighting of 10%. 

Social value however is not and should not be purely the domain of public contracts, it should be considered by all organisation public or private in delivery of its in-house operations and those that it contracts out to 3rd parties to identify and release value for our communities and the environment.

As a result of more awareness of sustainability and especially social value we are seeing more organisations in public and more latterly private sector addressing this in procurement bid evaluation using evaluation models such as the Social Value Portals National Themes, Outcomes and Measures (TOMs).  Whilst this is positive, we are seeing less evidence of sustainability being built into the DNA of organisations broader commercial activities and particularly into business led category strategies. 

We see this as a significant lost opportunity to deliver ongoing value directly and through the supply chain through the category lifecycle.  In consultation with clients, we have over the past 18 months redeveloped our toolkit, processes and guidance to incorporate social value aspects at its heart.  We have ensured that our key activities and tools such as business requirements, supplier and supply market research and opportunity analysis all identify and assess opportunities to deliver greater social value.

Building on the National TOMS’s we have developed a suite of tools to assist individual category teams to assess holistic sustainability themes for their category and support the definition of robust outcomes and measures.  These outcomes are attributed a value and dynamically prioritised alongside traditional procurement opportunities to deliver value. 

If your organisation is developing or enhancing its existing approach to sustainable procurement and environmental, economic and social value and would be interested in a discussion on this topic please contact Mark Bassington.

Further reading

Blog post: Sustainability in Category Management – what it means for Porters 5 Forces