Balancing act – sustainability and curbing expenditure

Is sustainability less of a priority now that public spending is increasingly under the spotlight? With the government setting itself strict targets to reduce carbon emissions, procurement managers working in smaller government agencies are likely to come under increasing pressure to reduce costs whilst maintaining sustainability.

Appetite within the public sector for sustainable products and services is gathering pace.

The Department for Business, Innovation and Skills (BIS) has been working closely with DEFRA, DfT and several other government departments to implement a strategy that delivers sustainable, reliable and affordable energy supplies. The strategy aims to deliver a reduction in carbon emissions by up to 60 per cent before 2050 with significant progress achieved by 2020. Appetite within the public sector for sustainable products and services is gathering pace.

To hit its targets, the public sector needs to minimise the environmental impact of its supply chains, reduce the environmental impact of the product or service it is purchasing and have its products/services delivered in an energy efficient and environmentally sustainable way.

Whilst up-front investment costs for sustainable procurement may be higher, particularly for capital projects, these are off-set by long term efficiency savings calculated by using whole life / life cycle costing. Sustainability is about hitting the triple bottom line – environment, society and economy – and the treasury’s guidance supports the use of whole life costing in procurement decisions.

We’ve been seeing a slow but steady increase in demand for candidates with experience of sustainable procurement over the past few years but it appears that we may be seeing a plateau in the level of demand lately. Could this be a result of the media’s increased focus on public finances in light of the current economic conditions?

Procurement managers should be able to keep pushing the green agenda within their purchasing activities without compromising their budgets. By prioritising contracts which deliver the best opportunities for sustainability at the lowest cost and reducing demand for less sustainable products and services, procurement managers can make significant savings. Longer term savings can be achieved by employing whole life costing to identify lower operating and disposal costs of sustainable alternatives and collaborating with other government departments to save duplication and get economies of scale. However, perhaps the most simple and effective method is to plan better – short term decision making tends to result in poorer purchasing decisions.

So rather than have to make some difficult decisions which compromise either on cost or on sustainability, perhaps procurement managers can still help the government to hit its ambitious targets without compromising their cost effectiveness.