Sustainable Procurement are we prepared for the challenges? Sandy Duncan CIPS Yorkshire Branch Email: [email protected] LinkedIn Group: CIPS Yorkshire Branch Twitter: @yorkshirecips #cipsyorks Welcome to The Rose Bowl Leading global excellence in procurement and supply Sustainable Procurement are we prepared for the challenges? Tonights Agenda Welcome and Introductions 18:15 Sustainable Procurement what is it & is it important? A personal view from Sandy Duncan, Sourcing Manager, Lloyds Banking Group Sustainable Procurement are we prepared? Survey findings and best practice overview from Dr. Alfred Chinta, Senior Lecturer
Supply chain management & Course Leader - MSc Supply chain management, Leeds Metropolitan University Delivering Social Value - procurements role? Sustainable Procurement, beyond just green issues - Bernadette Speight, Social Value & Social Enterprise Development Specialist from People Help People Q&A Session Any Other Business Event Close and Informal Networking 20:10 Leading global excellence in procurement and supply Sustainable Procurement What is it and is it important? A Personal View Leading global excellence in procurement and supply The Big Picture The World is Changing
Leading global excellence in procurement and supply And Procurement Needs To Change Too o All too often we are still seen as; transaction, cost focused and tactical o But many have moved (or are moving) to become; more strategic, value add and embedded o What does this mean in respect of Sustainable Procurement? Leading global excellence in procurement and supply My Personal View o Value Chain Understand the end to end process and impacts o Strategy Society should be placed at the centre of our thinking o People Good people want to work for good businesses, growing importance in attracting and retaining talent o Reporting Measure material things, roughly right vs accurately wrong The Classic Sustainability
Model o Key Challenges supply chain resilience, safety/no-harm and innovation/value release inc. Social Vlaue Leading global excellence in procurement and supply Sustainability : Are we prepared for the challenges Dr.A.C.Chinta Senior Lecturer - Supply chain management Leeds Metropolitan University Why study sustainability? Increased focus by the governments Demand from customers
Demand from Investors Supply chains shoulder the responsibility of implementation Aid policy formation for training and education at Universities and CIPS Gauge Supply chain pressures The Survey Covered CIPS members in Yorkshire and Northeast 124 responses Collected over a 4 week period Conducted by electronic means Anonymous 3.Percentage of total spend on sustainable products and services % of proc spend on sus prod and services 9.2
Don't know / Can't remember 5.9 Between 5% and 25% 5.9 41.2 Less than 5% More than 50% 14.3 Between 26% and 50% No answer 23.5 4. Sustainability spend in 3 years time Sus spend in 3yrs time 1.61%
11.29% 20.97% 9.68% 10.48% 45.97% Neither increase nor decrease Don't know Increase Increase significantly Blank Decrease 5.Is sustainability a part of initial Supplier evaluation Initial supplier evaluation 1.61% 12.10%
13.71% No Yes Sometimes, depending on the supplier's products and services Blank Don't Know 34.68% 37.90% 6.Is sustainability a part of your regular supplier performance reporting criteria? Is sustainability a part of your regular supplier performance reporting criteria? 17 31 3 No Yes
Sometimes, depending on the supplier's products and services 46 Don't know 27 No Reply 7. Which, if any, of these measures does your organisation use to assess suppliers' sustainability? 8-Which, if any, of these measures does your organisation use to assess suppliers' sustainability? 70 60 50 40 30 20 10 0 ge sa u
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O p r( e th y) cif e sp se a le 8.Do your key customers require you to use sustainable suppliers / raw materials? 16-Do your key customers require you to use sustainable suppliers / raw materials? 11 24 19
No Some prefer it, but it's not mandatory Don't know Yes, some of them 19 Blank 9 42 Yes, most of them 9.To what extent do you agree or disagree with the following statements about procuring sustainable products? 50 45 40
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10.00 11.29 9.68 5.65 5.65 5.00 0.81 0.00 P CI te ca fi ti er SC PS
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di lc u te ra , in o a t c re Do ra e th yo n a % of respondents 15.What is the primary source of your training on sustainability? 5.69%
3.25% 23.58% No info 8.94% CIPS training I haven't received any sustainability training Internal training organised in the organisation 19.51% External training by a consultant 17.89% Self Taught University degree 21.14% 17. Employees in procurement 35-How many employees in your organisation are involved in procurement?
16.94% 23.39% 2.42%2.42% 15.32% 25.81% 13.71% One 2 to 5 6 to 15 16 to 50 Over 50 Blank Don't Know Can't remember 19-In which sector is your organisation based? Blank Manufacturing 1.61%
Public administration and defence; compulsory social security 1.61% 0.81% 6.45% Education 2.42% 2.42% 25.81% 3.23% Other (please specify) Electricity, gas, steam and air conditioning supply; water supply, sewerage, waste management and remediation activities 3.23%
Human health and social work activities Real estate activities; professional, scientific and technical activities; administrative and support service activities Accommodation and food service activities 20.97% 13.71% Financial and insurance activities Transport and storage; information and communication Construction 7.26% 10.48% Wholesale and retail trade; repair of motor vehicles and motor cycles Info on the sample of respondents Mainly from large businesses with more than 35
million turnover 70% with more than 2 years of experience in procurement More than 70% have a sustainability policy Mostly buyers, Supply chain managers, procurement Directors Key Findings of the Survey Most businesses have a Sustainability policy Few small businesses have participated However very few enforce sustainability as a requirement for their suppliers Many businesses do not report sustainability as part of their procurement reports Most respondents are full members of CIPS Conclusions from the survey There is some understanding of Sustainability but it is varied Confusion on standards for Sustainability CIPS and University degrees are primary source of knowledge Need for clearer guidelines for procurement
professionals to evaluate and select suppliers Sustainable procurement needs significant improvement Challenges to procurement due to Sustainable requirements Lack of knowledge internally standards, Lack of knowledge externally in the supply chain Setting the right targets Keeping focus - as Sustainability is achieved over the long term Redesign and re-evaluate procurement strategies Defining sustainability Sustainable development has been inuentially defined as development that meets the needs of the present without
compromising the ability of future generations to meet their own needs (WCED, 1987) Sustainability can be thought of as a process, as opposed to an end-state (Parker, 2002) Global reporting initiative G4 guidelines provide a standard for all companies to report their sustainability initiatives Rauch and Newman(2008) define metrics for sustainability in four areas of emissions, water, energy and material use Reporting Sustainability-Evidence from Supermarkets Tesco-Tesco knowledge hub, Overall Carbon footprint Sainsbury-Responsible sourcing, puts all waste to positive use, difference to community, great place to work Marks and spencer-19% of food products meet sustainability standard, 100% palm oil is RSPO certified, 85 clothing suppliers use energy efficient practices, 0 construction waste to landfill, 34% increase in energy efficient 68% reduction in A/c emissions ASDA-Reduced waste, expanded locally grown produce, support women around the world, Renewable energy, direct farm program, diversity and inclusion
Morrisons-Responsible sourcing, healthy lifestyles, reducing impact, colleagues, engage with communities FMCG Companies Unilever embedding sustainability health & hygiene improving nutrition greenhouse gases water use waste & packaging sustainable sourcing fairness in the workplace opportunities for women inclusive business sustainable living news P&G Resource & Waste Summary Energy Waste Emissions
Water Compliance Employees Nestle environment impact, nutrition health and wellness, social impact From awareness to implementation How can procurement professionals respond? Undertake an audit of the business Identify gaps in knowledge Identify how sustainability will be measured and reported work with key stakeholders Identify improvements to be made to procurement processes to conform to sustainability requirements Transfer sustainability in procurement knowledge internally and externally Sustainability model (Hogevold, Svensson, 2014) References
Parker, H.W. (2002), Sustainability as a process, in Sikdar, S.K. (Ed.), Sustainable Engineering Conference Proceedings, American Institute of Chemical Engineers Annual Meeting, November 3-8, pp. 2-12. G4 (2014) G4 Sustainability reporting guidelines, Available at https:// www.globalreporting.org/resourcelibrary/GRIG4-Part2-Implementation-Manual.pd f , Accessed on [11-06-14] Forbes (2014) The World's Most Sustainable Companies Of 2014, Available at http://www.forbes.com/sites/jacquelynsmith/2014/01/22/the-worlds-most-sustai nable-companies-of-2014 / Accessed on [11-06-14] Confino,J.(2014)Best practices in sustainability: Ford, Starbucks and more Available at [http://www.theguardian.com/sustainable-business/blog/bestpractices-sustainability-us-corporations-ceres] Accessed on [11-06-2014] Tesco (2013) What matters now: using our scale for good, Available at http://
www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf , Accessed on [11-06-2014] Hogevold and Svensson (2012) A business sustainability model: a European case study, Journal of business and industrial marketing, 27/2, 142-151. Introducing social value Bernie Speight People Help People Support for social value One week left to apply Social Enterprise UK have support programme for Health bringing CCGs procurement & suppliers together to co-design what social value will look like and how it will be measured & evidenced in your area. www.socialenterprise.org.uk People Help People
Our Vision An inclusive society where people help each other for the greater good of humanity Our Mission Harnessing our knowledge and experience we enable people to focus their passions and talents, in collaboration with others, to achieve sustainable & positive change in society Social Value terms Objectives what you want to do Values how you will deliver Activities individual tasks or projects Outputs the quantitative countable stuff Outcomes the qualitative stuff / change that happens quickly Impact - longer term sustained change
Social Value Social Value Social Value Why social value important? Values Walk the Talk. Outcomes the change you empower Evidence the story, testimony Improvement and innovation Added value / Value for money How can you PROVE? Social Value Social Value
OutCOME indicators What has happened as a result of your actions? What difference has it made? More qualitative Records the change Requires consultation with stakeholders Social Value People Help People Supporting you to deliver social value Building Social Value Programme Building Social Value Supply Chain Programme Employee Resilience and Wellbeing Programmes People Help People Foundation
People Help People Building Social Value Supply Chain Programme Enables: Your social value aims and objectives to be delivered on a wider reaching basis through supply chain Enhanced relationships with your supply chain partners. You are supporting them and they are supporting you Robust action planning and monitoring throughout the supply chain People Help People Building Social Value Supply Chain Programme Measurement and evidence of your supply chain social value delivery Statutory and regulatory requirements to be met Budgetary and resource challenges to be met. No direct cost to you
Collaborative approach enables enhanced community engagement of your organisation. You are supporting all stakeholders in your community People Help People www.peoplehelppeople.co.uk [email protected] T: 0113 217 2705 M: 07850163488 facebook.com/peoplehelppeeps twitter - @PeopleHelpPeeps Question Time Leading global excellence in procurement and supply Finally, The Usual Reminders 1. Join Our LinkedIn Group 2. Maintain your MyCIPS Profile
http://www.cips.org http://www.linkedin.com/groups 3. Update Your CPD 4. Keep in Touch with your branch Email [email protected][email protected] Leading global excellence in procurement and supply Thank you Im off home to watch the football! Leading global excellence in procurement and supply
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