Embedding Sustainability in the Supply Chain Philip Duddell, Sustainable Procurement Limited 10 th September 2015 Conference On University Purchasing 2015

 ‘Golden Thread’  Clarity in Sustainable Outcomes and Innovation  Identifying priorities  Procurement Strategy/Market Engagement Strategy  Mapping Risks and Opportunities to Supply Chain Embedding Sustainability in the Supply Chain

Scotland’s National Purpose High Level Purpose Targets National Outcomes National Indicators Organisational Sustainable Outcomes Organisational Procurement Outcomes Procurement Strategic Priorities Frameworks/ Contracts Sustainable Outcomes delivered

Sustainable Outcomes Environmental Climate Change Socio-economic Employment, skills and training Materials Health and wellbeing Waste Communities Hazardous materials Ethical and fair trade Biodiversity Equalities Water

Behind the headlines WasteWaste - productionIs waste routinely produced from products procured or in service delivery AND/OR is there an opportunity to minimise waste/enhance high quality recycling/composting or recover value in some other way? Waste - prevention/reuse/ recondition/ remanufacture Are there opportunities to prevent waste/ extend products' (procured separately or used within service delivery) useful life, through reuse, repair, reconditioning or remanufacturing, internally or externally?

Source: Green Alliance Circular Economy

Behind the headlines Fairly and Ethically Traded Fairly and Ethically traded - Working conditions Are there potential risks relating to working conditions and labour standards within the supply chain related to the delivery of a related service or products AND/OR are there potential opportunities to improve labour standards by working with the market? Fairly and Ethically traded - Conflict Minerals Are there potential risks regarding human rights abuses as a result of the use of minerals that are mined in areas of conflict AND/OR are there opportunities to ensure that these are verified as conflict free?

Sustainable OutcomeSocial Value Procurement Outcomes Social Value Procurement Outputs Realise relevant and proportionate Social Value from the procurement of services Well trained and educated new entrants who are able to take advantage of employment opportunities Increase in numbers of new entrants with sustainable local jobs that offer opportunities for progression Total number of new entrants recruited No. of new entrants recruited as apprentices No. of other new entrant trainees No. of new entrants recruited who have sustained their place for minimum 13 weeks No. of new entrants who have gone on to secure further employment on other contracts

 Suppliers control and manage many key impacts  Importance of selecting suppliers able to address sustainability  Many major life cycle impacts are found in the manufacturing and logistics stage and suppliers’ own procurement. Supply Chain Risks & Opportunities

Life Cycle Impacts Impacts of obtaining raw materialsImpacts of manufacturing & logistics Impacts during use of product/serviceImpacts at end-of-life / disposal

Impacts of obtaining raw materials Sourcing overseas if demand outstrips supply – impact on carbon emissions Wood should be sourced from legal, sustainable forests/woodlands – forest management critical Potential impact on biodiversity of forests/ woodlands if focus is only on economic viability Support development of an immature supply chain through aggregated demand Opportunities for community woodland schemes to be integral to supply chain Impacts of manufacturing & logistics Carbon emissions from transportation, particularly if local supply chains are inadequate Production of chips/pellets – is renewable energy used Sourcing overseas if demand outstrips supply – impact on carbon emissions Competition for raw materials e.g. chipboard manufacturers Waste products from pellet manufacturing process Impacts during use of product/service Emissions particularly in ‘Air Quality Management Areas’ Shortage of qualified engineers/installers; through aggregated demand an opportunity to influence recruitment and training Disposal of waste products e.g. ash Impacts at end-of-life / disposal Disposal of ash – use as a fertiliser Disposal of boilers

 Devolved  Centralised  Hybrid  Resource constraints  Be clear what your intended sustainable outcomes are:  Legislation  HEFCE  University  Innovation and Universities – natural partners  Focus on priorities Within Universities

Innovation and Sustainability Value Transformation Innovation Engagement Compliance Opportunity

Focus effort according to balance between:  Spend  Environmental Risks & Opps  Socio-economic Risks & Opps  Scope to improve  Influence Identifying priorities

Overall priorities

 Clarify relevant Risks & Opps and where they are  Informs Procurement Strategy  Identify key suppliers across prioritised categories/commodities and priorities for market engagement. Using results

 Key internal and external stakeholders engaged with on views on sustainable outcomes sought  Results of prioritisation cross-referenced with suppliers within prioritised categories/commodities  Targeted programme of stakeholder engagement, promoting continual improvement  Two way communication between procurer, key internal and external stakeholders  Key suppliers targeted for intensive engagement  Supply chains mapped for prioritised spend areas  Best practice shared with other/peer organisations locally, nationally and internationally Using results

 Can you map?  When do you need to? Risks & Opportunity based  Resource constraints  Importance of Contractor  Supply chain  Sub-contractors Mapping supply chains - sustainability

 The Contractor will be expected to maintain security of supply through appropriate and comprehensive supply chain management of risks, which are reasonably within their control, and which may arise due to availability of components, environmental, social or other relevant factors.  the Contractor will be required to demonstrate how they assess the likelihood of conflict minerals within products, and what measures they have undertaken to minimise and eliminate, where practical, such minerals. The Contractor will be required to comply with any new and emerging legislation and/or self-certification system.  The Contractor will be expected to have a comprehensive system which demonstrates an on-going and systematic approach to identifying and managing risks relating to labour standards, working conditions and use of child labour in the supply chains relevant to the Framework Agreement. Relevant requirements

Prioritise  Clarity in intended outcomes  Prioritisation and stakeholder engagement key  Can’t embed sustainability without understanding of market possibilities  Contractors aren’t necessarily focused just on minimum compliance  Bold, visionary and innovative can equal relevant, proportionate and value for money

Philip Duddell, Thank you