Sustainable procurement practices in the public sector aren’t new. What is new is the importance the UK government and governments globally have assigned to sustainability, making it mandatory in many procurement processes. In the UK, for instance, suppliers bidding on government contracts worth over £5 million must commit to Net Zero by 2050.
Public sector buyers and suppliers are aiming for the triple bottom line (3Ps): People, Planet, Profit. The goal is to create sustainable value for everyone impacted by the tender, including buyers, suppliers, employees, and community members.
The 3Ps can be divided into categories that are relevant to contracting authorities’ pain points, some of which include:
- Environmental protection
- Human rights
- Anti-bribery
- Fair labour
- Equality
- Employee well-being
One of the primary considerations in a sustainable procurement strategy is meeting society’s current needs without taking away from the needs of future generations.
In this post, we’re going to look at why sustainable procurement practices are so important to the government, with a special focus on how SMEs can leverage environmental and economic sustainability and social value to gain a competitive advantage in the dynamic market.
Environmental Sustainability in Public Sector Procurement
SMEs are well-positioned to optimise environmentally sustainable practices. It’s because of their size that they can score some quick wins. Their greenhouse gas emissions are quite low and can be reduced by switching (largely) to renewable energy, banning single-use plastic (SUP) in their business, and reducing SUP in their supply chains. Adopting these eco-friendly practices can also help reduce environmental compliance costs in the long run.
You could implement a carpool policy to reduce carbon emissions and minimise waste by going paperless.
You could also consider environmental factors in your supply chain and collaborate with businesses to adopt more eco-friendly practices, like using recycled packaging material instead of plastic.
Economic Sustainability in Public Procurement
This refers to a company’s long-term sustainability performance through supplier diversity and green business processes that open new business opportunities. For example, you develop a new tool to reduce greenhouse gas emissions in your manufacturing process. The tool actually has diverse applications that are in demand. Suddenly, you’re also manufacturing the tool for the private and public sectors.
You could take a deep dive into your resource allocation so that resources are allocated more wisely. This can make your business processes more efficient, saving time, waste, and costs.
It’s also worth considering sustainability certifications.
The International Organisation for Standardisation has certification options for virtually every need imaginable. You could attain an ISO 50001 certification for effective energy management and energy-efficient business operations.
Social Value in Government Procurement
Social value has been given a minimum weighting of 10% in the supplier selection process, which also emphasises value over price. This gives SMEs a fair shot at public tenders because they can provide a lot of impactful social value that larger enterprises can’t.
With their ears to the ground, SMEs also discover communities’ real needs, which can be addressed in a collaborative and transparent way.
Like the 3Ps, social value is divided into three categories:
- Environmental
- Social
- Economic
Environmental initiatives include park restoration, community clean-up, and integrating renewable energy systems to reduce carbon emissions.
Social initiatives include revamping the community centre, helping an animal shelter raise funds for new kennels, and providing financial support to a local charity that manages a community vegetable garden.
Economic initiatives include running an apprenticeship programme for disadvantaged youths, supporting the local economy by using local services and suppliers, and paying employees a living wage.
Note: You can also get certified for your social value. ISO 26000 is for businesses that operate socially responsibly and demonstrate their commitment to sustainable practices.
Key Sustainability Regulations
The UK already has several social, economic, and environmental regulations that support sustainable procurement, with more on the horizon. Here are some of the regulations suppliers must be aware of.
Procurement Policy Note 06/21
PPN06/21 set the stage for sustainable procurement. Essentially, if you’re bidding on contracts over £5 million per year you must not only commit to Net Zero by 2050 but also provide a Carbon Reduction Plan. The beauty of PPN06/21 is that the government closes the gap to its net zero sustainability goals while securing the best value contracts.
Additional regulations include:
- The Great British Energy Bill: To speed up renewable energy generation and offshore wind.
- The Sustainable Aviation Fuel (SAF) Bill to increase SAF production
- The National Wealth Fund Bill to increase investment in green hydrogen, green steel, industrial decarbonisation, and other growth industries.
- The Planning and Infrastructure Bill to boost upgrades to the national grid as well as renewable energy.
8 Tips to Incorporate Sustainability Into Bid Proposals
It’s important to punt your sustainability credentials in your bid proposals. Here are eight tips to integrate sustainability into tender responses.
1) Understand the contracting authority’s sustainability goals.
When you understand their priorities, you can tailor your proposal to match. Goal alignment is a great way to earn trust. People like people who share their priorities.
2) Tailor your approach to align with local regulations and applicable laws
Your approach must suit the local values, regulations, and culture. The increased relevance makes your sustainability initiative more impactful.
3) Include metrics relevant to the initiative
Measurable outcomes must be relevant to the sustainability initiative and quantify intangible evidence, making it tangible and easier to evaluate.
4) Provide certifications and accreditations
Certifications are highly recommended. ISO 14001 relates to environmental management and like all ISO certifications, stands you in good stead when buyers are evaluating a glut of proposals.
5) Demonstrate successful projects
Use case studies to demonstrate your successful practices, with special care to highlight the positive impact on the local environment, society, and economy. Case studies and testimonials bolster your sustainability credentials.
6) Collaborate with locals
Team up with local businesses, NGOs, or charitable organisations. This increases the impact of your initiatives and demonstrates your dedication to uplifting the local community, whether that’s socially, economically, or environmentally.
7) Keep it transparent and honest
Fruitful relationships are borne of honesty. Be upfront about everything, including the challenges you’re likely to face. Then provide the solutions you’ll implement to overcome said challenges. Being honest demonstrates integrity and trustworthiness and can inspire confidence in your business.
8) Ongoing monitoring and regular updates
It’s important to keep an eye on your sustainability strategy to ensure it’s still compliant with industry standards and regulations and to stay up to date with industry developments and technological advances.
Share Your Sustainability Programmes Easily With Supply2Gov
Supply2Gov is a free tender alert service that also provides a host of other public procurement support services that make it easy to store customisable documents that you can use each time you submit a proposal, this includes things like your sustainability strategy and certifications.
You don’t need to create these documents from scratch for each tender. Instead, you can tailor your strategy to suit each contract you bid on.
Register for a free account now and find out more about our suite of services that simplify public procurement for experienced suppliers, SMEs, and businesses new to the public sector procurement market.