Please note this content was originally published in the Summer 2021 edition of the Independent Schools’ Bursars Association (ISBA) termly magazine, “The Bursar’s Review”, issued 11 June 2021, and is reproduced with the kind permission of ISBA.
Recent years have seen sustainability take on a newfound significance across all industries and sectors, with organisations worldwide recognising not only the importance of understanding the environmental and social contexts in which they operate, but also the value and long-term benefits of incorporating sustainable practices into their business strategies and processes.
Tangentially, schools frequently find themselves at the vanguard of the climate change movement: pupils have staged climate protests and walkouts; members of the public have called for reform of the national curriculum around the current global ecological crisis; and the Government announced in March 2021 a future allocation of £932 million towards its Public Sector Decarbonisation Scheme, to include funding energy efficient measures across UK schools.
Indeed, with recent studies suggesting that schools account for approximately 2% of total UK greenhouse gas emissions, they undoubtedly have a role to play in the fight against climate change - a view seemingly shared by parents, who are increasingly conscious of, and engaged with, schools’ attitudes and initiatives in relation to sustainability. This itself reflects the growing impact that sustainability, as well as concerns over wider corporate social responsibility and ‘good governance’, have had on the way consumers interact with, evaluate, and potentially choose to endorse businesses.
Sustainable procurement - what? / why? / how?
An area in which schools have the opportunity to deliver on certain of their sustainability objectives is within their supply chains and via their procurement processes. Sustainable procurement practices can not only contribute to a reduction in schools’ own energy consumption, but also promote environmental, ethical and sustainability awareness amongst suppliers and contractors whilst improving efficiencies, stimulating the market for eco-friendly goods and services and driving local supply chain innovation. A school’s contract with an external catering provider, for example, can provide such opportunities.
The Government’s 2006 sustainable procurement national action plan, Procuring the Future, defines sustainable procurement as:
“a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment.”
Implementing clear sustainable procurement policies can therefore save money in the long-term, contribute to community-wide welfare and development and mitigate the effects of climate change, whilst helping to reinforce a school’s good image, engage with pupils’ expectations and, potentially, serve to attract parents and teaching talent. But it takes more than just buying ‘green’ products to demonstrate commitment to a transformative sustainable procurement strategy. Other fundamental elements include:
- planning ahead to manage demand for goods and services;
- overseeing suppliers’ contractual obligations effectively;
- managing supply chain risks and impacts; and
- continually monitoring and identifying areas for improvement.
How, then, can schools ensure that they incorporate sustainability into every stage of the procurement cycle?
Preliminary planning stage
A procurement policy
Schools should formalise their commitment to sustainable procurement through a clear and comprehensive policy outlining their sustainability objectives and how they aim to achieve these through strategic procurement techniques. Such a policy embeds sustainability into a school’s ethos and frames a school’s commitment to devoting time and attention to matters of environmental, social, ethical and economic importance.
Advance planning is a fundamental stage of any procurement and involves: (i) an assessment of need; (ii) an evaluation of environmental and social impact; and (iii) the adoption of a ‘whole-life costing’ approach towards the purchase of a product or service.
To help inform and prepare for any buying decision, schools might reflect on their sustainability policy and objectives and ask themselves:
- Is the product or service really needed? Many schools, for instance, no longer buy plastic bottles and instead asks parents to supply their children with a reusable bottle that can be refilled at school.
- Can existing products be refurbished or repaired to avoid the need to purchase afresh?
- Can the product be leased?
- If the product is disposable, do reusable alternatives exist?
- Are there ‘green’ efficiencies in the provision of a service that are not being utilised or, if they are, that are not being maximised? For example, as part of the development of Eton’s new Sports and Aquatic Centre, an energy station has been installed to provide access to a viable alternative energy source.
- Can purchases be grouped together, or shared with others, to ensure greater efficiencies?
- How does the initial monetary and environmental cost of purchasing a product or service compare with the lifetime (and ultimate disposal) costs incurred by that same product or service?
- What accreditation schemes exist amongst suppliers that can help deliver a school’s objectives? The Certified B Corporation, for example, is an accreditation scheme aimed at building a more inclusive and sustainable economy and is held by a growing number of new businesses that have to demonstrate the highest standards of social and environmental performance, public transparency and legal accountability to balance profit and purpose.
As ever, there are many ways in which best practice can develop. At a general level, for example:
- schools can develop their procurement expertise by engaging with local sustainable procurement initiatives and sharing know-how and experiences (for example, of specific sustainable suppliers or products) with other schools; and
- coordinating and partnering with other schools to deliver on sustainability commitments can lead to both the sharing of services and equipment and the formation of local buying consortia: inter-school collaboration can increase collective purchasing power, which in turn has the potential to achieve better overall deals on sustainable goods and services and, for instance, reduce packaging, delivery fuel and associated costs. Overcoming any sense of “our need is different to yours” - when in truth it really isn’t - is often the challenge to this sort of collaboration; but good local partnerships and open dialogue can facilitate this.
Schools can also build their sustainability objectives into specific stages within the procurement process.
Whilst market engagement is encouraged throughout the procurement process, it is of particular importance at the pre-tender stage. This is a key point at which schools can investigate and test their sustainability objectives and requirements with potential suppliers, openly discuss possible options and solutions, and consider the likely overall cost of the proposed procurement strategy. Schools can use pre-market engagement to ‘test the waters’ with potential suppliers by assessing whether or not tender specifications are realistic and, by modifying their approach if necessary, settle on their final tender requirements confident in the knowledge that there is a market for them.
The tender stage (ie, the Invitation to Tender or the Request for Proposal) provides the opportunity to build the sustainability objectives into the procurement, and to assess the suitability of a supplier to deliver such requirements from a cost and quality perspective. Most obviously, this can be achieved by reflecting these requirements in the tender specification and then hard-wiring them into the selection criteria so that they are meaningfully scored as part of the evaluation stage.
Specification. Incorporating environmental and social requirements into the tender specification highlights to suppliers the importance of sustainability to both the procurement and the future contractual relationship. Simplified for the purposes of illustration, an environmentally conscious specification might include requirements as to:
- the use of biodegradable or recycled material [paper];
- the organic and/or fair-trade certification of a product [school food];
- the reduction of harmful materials in a product [cleaning materials];
- the energy efficiency rating of products [white goods]; and
- the maximum acceptable emissions level of vehicles [school coaches].
Selection Criteria. The chosen selection criteria, together with the related scoring and weightings, can then enable schools to collect sufficient information and ensure a thorough and consistent assessment of the sustainability commitments outlined in suppliers’ bids and proposals. Whilst price and quality will remain key criteria in any procurement, introducing other elements realigns the weightings given to those two items, the overall intention being to procure products and services with a greater emphasis on whole-life cost.
In addition to collecting information in relation to, for example, carbon emissions, waste and resource use (both current and anticipated), schools might also question how bidders intend to monitor the socio-environmental practices/commitments of any sub-contractors, thereby ensuring that lower-tier suppliers are included in the overall procurement strategy and thus encouraging sustainability throughout the supply chain.
Needless to say, the provisions of a successful tender must be effectively and fully ‘contractualised’ to ensure that suppliers deliver on their sustainability commitments made at tender stage, and schools must undertake active and collaborative contract management to monitor ongoing performance.
The initial challenge, however, is translating the ‘marketing speak’ in which the tender will inevitably be written into the precise and certain commitments that will become legally binding obligations under the contract; such detail will usually populate schedules that are attached to the main legal terms and conditions. This endeavour will typically be undertaken by the purchasing team and the legal advisers to ensure consistency across the contract documents.
Depending on the nature of the procurement, a contract could include specific terms and conditions to reinforce the commitments, for example by:
- insisting upon robust clauses to reflect a zero-tolerance approach to modern slavery;
- imposing active and regular reporting requirements on the supplier;
- using improvement targets and key performance indicators to monitor performance;
- reserving certain rights if the supplier fails to meet, eg, energy efficiency targets or associated obligations, such as service credits or, in more serious cases, the ability to terminate; and/or
- allowing the school (or a third party on its behalf) to conduct its own monitoring and audits of the supplier.
The Sustainable Development Commission has calculated that 42% of carbon emissions from the schools sector come from procurement activities. It is clear, therefore, that schools’ day-to-day buying decisions have the potential to influence, for better or for worse, the ecological crisis that we are currently facing.
Implementing a sustainable procurement policy does not necessarily require a radical rethink of schools’ existing purchasing processes and procedures, nor should it detract from the environmental initiatives that many schools already have in place. However, in an age where organisations (and their reputations) are subject to increasing levels of scrutiny in respect of their procurement activities, schools can help themselves further by introducing sufficiently robust strategies to demonstrate that they have serious intentions to address their environmental, economic and social responsibilities.
Through actively engaging with their suppliers and the supply chain, schools can not only meet their sustainability goals, but can also mitigate risk, reduce long-term purchasing costs and, importantly, shape connections with pupils, parents, staff and local communities.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, July 2021