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Sustainable procurement - CIPS - Leading global excellence ...

Sustainable procurement Introduction 2. Definitions and background 2. CIPS guidance material on Sustainable procurement 2. The case for Sustainable procurement 3. Benefits of Sustainable procurement 4. A case study 4. The CIPS positions on practice 4. Legislation: the risks of inaction 5. Conclusion 6. Useful websites 7. 1 Tel +44(0)1780 756777 Fax +44(0)1780 751610 Email Web MAY 09. Sustainable procurement Introduction Economic impact of sustainability;. We all have an opinion about sustainability, developed for example by our experiences and the media. There are many corporate governance varying definitions, each reflecting the values and needs ethical trading of the particular organisation, person or society.

MAY09 Tel +44(0)1780756777•Fax +44(0)1780751610•Email ckw@cips.org•Web www.cips.org 2 Introduction We all have an opinion about sustainability, developed by our experiences and the media. There are many varying definitions, each reflecting the values and needs

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Transcription of Sustainable procurement - CIPS - Leading global excellence ...

1 Sustainable procurement Introduction 2. Definitions and background 2. CIPS guidance material on Sustainable procurement 2. The case for Sustainable procurement 3. Benefits of Sustainable procurement 4. A case study 4. The CIPS positions on practice 4. Legislation: the risks of inaction 5. Conclusion 6. Useful websites 7. 1 Tel +44(0)1780 756777 Fax +44(0)1780 751610 Email Web MAY 09. Sustainable procurement Introduction Economic impact of sustainability;. We all have an opinion about sustainability, developed for example by our experiences and the media. There are many corporate governance varying definitions, each reflecting the values and needs ethical trading of the particular organisation, person or society.

2 This payment on time CIPS Knowledge Summary takes the opportunity to develop Sustainable procurement in its business context Environmental impact of sustainability;. and detail its application in the purchasing and supply for example management environment. biodiversity climate change and carbon footprints Sustainable procurement is an important issue to CIPS. It is at the heart of the CIPS corporate strategy for 2007- Social impact of sustainability;. 2010, and reflects the growing contribution effective for example Sustainable procurement can make to organisations. diversity (supplier and workforce). human rights. Definitions and background CIPS have adopted the definition of Sustainable It is also helpful to think about sustainability within procurement used by the Sustainable procurement Task business/organisations, on three levels: Force (SPTF).

3 The SPTF was established as a business- 1. Legal requirements led task force by the UK Secretary of State for the 2. Cost and waste reduction Environment and the Chief Secretary to the Treasury in 3. Mitigation of risks, protection of brand and reputation. order to develop a National Action Plan and make the UK a leader in the European Union in Sustainable CIPS guidance material on Sustainable procurement procurement by 2009. CIPS acknowledges the interrelated nature of economic, environmental and social impacts of sustainability on In Procuring the Future1, the output from the SPTF's supply chain activities. Environmental challenges and Sustainable procurement National Action Plan, opportunities are considered as heartland' issues.

4 Sustainable procurement is defined as: established thinking in direct response to the effects of climate change. A number of authoritative studies, a process whereby organisations meet their needs for including the 4th Assessment Report from the goods, services, works and utilities in a way that Intergovernmental Panel on Climate Change (IPCC) and achieves value for money on a whole life basis in terms the Stern Review on the Economics of Climate Change, of generating benefits not only to the organisation, but confirm that human activity is accelerating global also to society and the economy, whilst minimising warming to a point where humans, animals and other damage to the environment. organisms are unable to adapt, with catastrophic consequences.

5 The Stern Review highlighted the The definition then elaborates on the meaning of whole projected economic impact of climate change at life basis' by stating that Sustainable procurement between 1% of global GDP and 20% of global GDP. should consider the environmental, social and economic (dependent on the time taken to stabilise levels of consequences of design; non-renewable material use; greenhouse gases in the atmosphere). The former value manufacture and production methods; logistics; service is based on stabilising greenhouse gas levels3 at delivery; use; operation; maintenance; reuse; recycling between 500 and 550 parts per million (from the current options; disposal; and suppliers' capabilities to address 430ppm of carbon dioxide equivalent).

6 These consequences throughout the supply chain . Sir Nicholas Stern's review has become a reporting In alignment with the European Union's Sustainable benchmark on the potential effects of climate change. Development Strategy (EU SDS)2, true Sustainable The resultant UK Climate Change Bill (and UK Energy procurement should take into consideration economic, Bill) is part of the Government's action plan to reduce environmental and social factors in analysing the impact the impact of climate change and move towards a low of Sustainable procurement on the purchasing and carbon economy. Legislation has thus become a main supply chain environment. Most debate, research and driver for changing behaviour and making private and 1.

7 Procuring the Future is available action have focused on the environmental aspects. This public sector organisations recognise that addressing at is understandable as an initial step, but any framework environmental issues makes good business sense and is for analysis must consider the three pillars of the responsible thing to do. rocurement-action- 2. Further details on the EU SDS. sustainability. To promote this focus, CIPS have (10117/06) dated 9 January 2006. segmented the areas as follows: These issues, together with useful hints and tips for are available at energy buyers, are discussed in the CIPS Insight guide 3. to purchasing energy and carbon footprint impacts. Greenhouse gases (GHG's) is the generic term used to represent gases (including carbon dioxide and methane) that contribute to climate change.

8 MAY 09 Tel +44(0)1780 756777 Fax +44(0)1780 751610 Email Web 2. Sustainable procurement The effective management of waste is part of the The CIPS Supplier Diversity paper, based on the environmental management remit and is covered by the expertise of Professor Monder Ram at the Centre for CIPS Environmental Purchasing in Practice guidance Research in Ethnic Minority Entrepreneurship (CR ME). document. This publication explains in detail how the at De Montfort University, Leicester, emphasises the environment can be considered at each of the key demand and supply side potential of engaging UK. stages in the purchasing process. Complementary to the ethnic minority businesses, to afford them the same CIPS Environmental Purchasing in Practice Guide opportunities as other businesses.

9 Guidance document are many different tools and techniques that can be used, and to see them in relation Identified commercial and societal benefits of a level to purchasing in this way should bring a new level of playing field would include: clarity to the subject. Secondly, it makes the connection new procurement and sales opportunities (with the between supply chain management and environmental supply base also being a potential customer base). management systems (EMS). An EMS requires an increased commitment, flexibility and security from assessment of significant environmental aspects, many the ethic minority business. of which will lie in the supply chain. Where this is the sources of innovation and cost competitiveness (and case, the Institute of Environmental Assessment and the agility for rapid response).

10 Management (IEMA) draft code offers practical guidance mirroring the customer base on how they could be handled. encouraging local economic development and growth developing the organisation's resource base Professor Michael Porter and Mark Kramer, in risk reduction (by meeting stakeholders' societal documenting the link between competitive advantage requirements). and corporate social responsibility4, promote a shift in thinking from CSR to corporate social integration'. CIPS also has a position on supplier diversity contained Similarly, CIPS has recognised the increasing need to in the Supplier Diversity Knowledge Summary. consider social issues in Sustainable procurement decision-making. It can be argued that management of The case for Sustainable procurement the supply base is one of the best value-adding activities The CIPS literature has alluded to risks and to engender innovative solutions for customers.


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