Description
Work with colleagues to understand the primary need, including how the purchase aligns with your organisation’s sustainability goals. Identify sustainability risks, opportunities, and crucial criteria for your purchase decision.
Develop and share your needs statement
Collaborate with colleagues to understand their purchasing needs and sustainability objectives. Begin by setting aside specific or technical details and instead ask more fundamental questions: for example, is the need to purchase electric vehicles or is it about decarbonising logistics?
Further refine the need based on, learnings from previous procurement processes, your business' context, and timeline. For instance, at early stages in your sustainability journey, sustainable procurement may need more time and resources. Finally, consider alternative sourcing options such as reusing or renting.
Once you understand your procurement needs, summarise them in a ‘needs statement’. The summary should include your sustainability goals and alternative sourcing opportunities. Then share the statement with colleagues, suppliers, and others to gather feedback and to help inform the next steps in the procurement process.
EXAMPLE: Energy company pivots to meet its need with existing infrastructure
Alliander, an energy distribution company, planned to expand its office space with sustainably certified buildings. However, after clearly defining the core need, it became evident that Alliander’s need was more specifically additional workstations. Suppliers were able to offer creative solutions to the need using existing buildings, which avoided procuring new materials.¹
Consider your sustainability commitments as well as key risks and opportunities
At this stage your aim is to identify priorities for the procurement that can later be incorporated into your RFx and evaluations. To do this you will need to define your sustainability goals for this procurement. These should be informed by, a review of your organisation's sustainability commitments, input from colleagues, and relevant risks.
To understand the procurement’s potential sustainability risks consider the full life cycle of the product or service. Then make a preliminary list of associated risks and opportunities to improve sustainability. This should draw upon any work already undertaken to EVALUATE RISK in your supply chain and consider previous contract data, where available. Make sure to also review your supply chain's legal risks and assess who has duties of care.
Be prepared to address concerns about conflicting goals, such as cost versus sustainability, by explaining to colleagues how sustainable procurement can add value. For instance, through innovation, efficiency, risk management, supplier relations, and customer loyalty. Life Cycle Costing and Return on Sustainable Investment (ROSI) tools can help to quantify this value.
EXAMPLE: Mining company discovers in-house waste stream that meets its need
A mining company regularly procures new mudflaps for their haul trucks. After considering alternative ways to meet this need, the company discovered that an in-house waste stream — worn-out conveyor belts — could be repurposed to produce mudflaps in a resource-efficient way.3
EXAMPLE: Sustainability prioritisation in Dutch Government procurement: the ambition web approach3
Using an 'ambition web', the Dutch government's central procurement prioritises sustainability, focusing mainly on reducing emissions, minimising raw materials, and mitigating chemical impacts. Secondary ambitions involve human rights and social costs. As a result, in ICT equipment tenders’ evaluation, nearly 87% of the quality score relates to sustainability.
Plan for how you will assess and weight sustainability factors
To influence and inform how much attention and consideration sustainability receives during the procurement process, begin planning now for how sustainability criteria and weighting will fit into the procurement’s specifications, award criteria, and contract conditions.
The detail and rigour of your criteria will depend on the resources you have available to evaluate sustainability, such as time, expertise, data, and ability to verify supplier claims. Based on your capacity think about how your team can develop an effective scoring system that assigns weightings to sustainability factors in the procurement process. This preparation is particularly important in public procurement, as your weighting cannot be changed once the call for tender is published. It is also important to plan market engagement activities to test on the feasibility of your scoring system. And get feedback such as, what information and data suppliers are able to provide.
Consider purchasing strategies that can incentivise sustainability
During the planning stage consider ways you can leverag spending power to get a competitive market response that meets your sustainability objectives. For example, joint procurement with other buyers can aggregate spending power to motivate the market to innovate on sustainability.
Longer term relationships can also be used to motivate suppliers. This could be in the form of Framework agreements, popular in public procurement, or listing suppliers in sustainable product catalogs and online marketplaces that gives them access to ongoing opportunities. Such resources can also make it simple for your colleagues to find sustainable products and services.
