A risk based approach to sustainable procurement EAUC – EAF Programme
A risk based approach n Background q q Three year project Reducing negative environmental and social impacts through purchasing Steering group, partners from Further Education and Higher Education Training n Train the trainer n Policy and strategy development n Risk based approach to procurement n Supplier engagement n Social issues in procurement
A risk based approach Objectives n n n Develop a shared understanding of what a risk based approach to sustainable procurement looks like Review good practice of risk based approaches Practice the implementation of a risk based approach Be introduced to the latest guidance available Develop an action plan to take back to your institution
A risk based approach Agenda 12. 00 12. 30 12. 45 13. 15 14. 00 14. 15 15. 45 16. 15 16. 30 Lunch Introductions and objectives What is a risk based approach? Why take a risk based approach? Break Implementing a risk based approach Case Study Review Action Planning Close
A risk based approach n Format and style of workshops q q Interactive Informal Varied Proactive
What is a risk based approach?
Basic risk management n n Identification Analysis Evaluation Control/management
Risk identification and analysis n n n Identify potential threats that could stop you achieving your business objectives by completing the following sentence: there is a risk of …. . which would result in …… Impact (low, medium, high) q cost q time q quality Likelihood (low, medium, high)
Risk evaluation L/H = M M/H = H H/H = H L/M = L M/M = M H/M = H L/L = L High M/L = L H/L = M Impact Low Likelihood High
Risk evaluation High Manage Stop Ignore Impact Stop Ignore Manage Impact Low Likelihood High
Why is the environment a risk? (1) Risk to the environment from the organisation (and its supply-chain) - Pollution Potential - Climate Change - Resource Depletion - Emissions - Waste Reputation Fines/ prosecutions Rising costs
Why is the environment a risk? (2) Risk to the organisation from the environment - Reputation - Legal compliance - Supplier failure - Supply failure – resources! - Environmental taxation - Heath impacts, e. g. air quality and respiratory disorders - Quality of working environment Impacts on cost, time and quality Business risks
Sources of environmental purchasing risks Risks can arise from three different areas of supplier performance: 1. 2. 3. Supplier performance in their own sites/operations Supplier performance while on your site Supplier-provided components/products/services which flow through into your operations products/services Slide courtesy of Environment Agency (adapted)
Why take a risk based approach to sustainable procurement?
Why take a risk based approach?
Why take a risk based approach? n n n Every product or service we buy has an environmental and social impact You buy thousands of products You have limited resources You have limited time You are being asked to demonstrate how the work you do supports your institution
Why take a risk based approach? n n We need a way to prioritise our activity Risk as a concept resonates with institutions and senior management Ensures we are not wasting our efforts – we are looking to implement sustainable development which is about reducing impact Tried and tested approach
Why take a risk based approach? n n n Helps focus activity on main impacts Involves stakeholders internal customers – helps get buy in for implementation Demonstrates that high risks do not only come from high value purchases
What guidance exists?
What guidance exists? n The approach we are going to use is adapted from q q q Sustainability and Local Government Procurement – IDe. A (November 2003) An approach used by Belfast City Council The Environment Agency
Implementing a risk based approach to sustainable procurement Exercise
Implementing a risk based approach n In groups identify what environmental issues are of particular concern – try to choose 3.
Implementing a risk based approach n In groups identify 20 products / services you routinely buy as an organisation
Implementing a risk based approach n n In groups identify 20 products / services you routinely buy as an organisation Consider the environmental impacts / risks associated with the products or service
Implementing a risk based approach n n n In groups identify 20 products / services you routinely buy as an organisation Consider the environmental impacts / risks associated with the products or service Using the matrix provided identify whether you perceive the product to be a high, medium or low environmental risk and high, medium or low profile risk
Implementing a risk based approach Environmental Risk Procurement High Med Low Item 1 * Low * Item 2 Item 3 Profile Risk High Med * *
Implementing a risk based approach Environmental Risk High Low Profile Risk High
Implementing a risk based approach Environmental Risk High Priority 2 Priority 1 Priority 4 Priority 3 Low Profile Risk High
Control and management n Priority 4 q Reduce consumption q Increase awareness and encourage via questionnaire and referral to policy
Control and management n Priority 3 q Reduce consumption q Green specifications only on the basis of cost benefit q Increase awareness and encourage via questionnaire and referral to policy q Minimal green supplier appraisal
Control and management n Priority 2 q Reduce consumption q Green options sought q Cost / benefit evaluated q Green supplier selection q Green design q Green specifications q Whole Life Costing q Ensure issues included in consultancy design briefs
Control and management n Priority 1 q Reduce consumption q Green options sought q Cost / benefit evaluated q Green supplier selection q Green design q Green specifications q Whole Life Costing q Ensure issues included in consultancy design briefs q Gain commitment to future action
Summary of the process n n Review / Identify environmental and social priorities for your institution Identify a group of individuals within your institution from different backgrounds and experiences Compile a list of all the products and services you purchase (as comprehensive as possible) Spend as long as it takes prioritising using the matrix (1 – 2 days)
Summary of the process n n This means you have undertaken an environmental risk analysis of all the products and services you purchase!! Identify the suppliers related to those products or services Prioritise management response Communicate it to staff and suppliers
Case study review The Environment Agency
The Environment Agency Identification of Business Need and Assess against Waste Hierarchy Business Risk Assessment Sustainability Risk Assessment Influence with Supplier Summarise risks, Supplier Influence & Map using Boston Matrix LOW RISK Identify main issues and integrate into the contract HIGH RISK More detailed risk assessment, rank, allocate and manage
The Environment Agency n High level environmental risk assessment q q q Does the purchase or service provider have the potential for high energy consumption? Is the product made of – or does the service provider use – unsustainable materials Could the item or service provider cause a pollution incident in the performance of Agency work?
The Environment Agency n High level environmental risk assessment q q Are excessive emissions (to land, air or water) caused during the manufacture of goods used directly or by the service providers? Is there an environmental public relations risk to the Agency in purchasing the product or service?
The Environment Agency n Agency’s influence with the supply base q The agency then looks at the potential influence it will have with high risk product or service provider n n n Is the Agency a key client? Does the Agency represent more than 0. 5% of turnover? Is the Agency an easy customer to work with? Does the Agency pay on time? Is the Agency efficient in its business dealings with us?
The Environment Agency n n Detailed risk assessment (answers yes to three questions or more Management action q q q Determine the method of risk management Allocate responsibility Agree a date for resolution Address though supplier selection, specification, evaluation, and negotiation Can’t manage it because of lack of influence
Case study review United Utilities
United Utilities n n CSR Policy Environmental Policy Sustainable Procurement policy BITC Index
United Utilities n n 2003 saw a review of the supplier prioritisation approach, which prioritised commodity groups rather than individual suppliers Each commodity group was assigned a potential environmental impact ranking, based on an impacts matrix approach developed internally
United Utilities n n The resulting commodity prioritised list formed the basis of our engagement programme with our suppliers The engagement workshop programme also included specific workshops for United Utilities' procurement buyers and internal customers - United Utilities' employees who set contracts and/or procure goods and services as part of their job
United Utilities n While the focus so far has been very much on environmental areas, there have been elements of social sustainability that have started to become incorporated
United Utilities n n n Examined all of the products they purchased and looked at high spend areas Produced a prioritised list of suppliers of high risk commodities Undertook as series of supplier engagement workshops
United Utilities n n n n Reducing energy consumption Reduce the release of greenhouse gases Reduce the use of non-renewable materials Reduce the risk of pollution Reduce waste production Comply with environmental regulations Reduce the impact of transport
Summary n n n It is a fairly simple approach but will help focus your effort Risk based approach may appeal to senior managers Gets buy in and is inclusive
A risk based approach Objectives n n n Develop a shared understanding of what a risk based approach to sustainable procurement looks like Review good practice of risk based approaches Practice the implementation of a risk based approach Be introduced to the latest guidance available Develop an action plan to take back to your institution
Many thanks jbrannigan@esdconsulting. co. uk www. eauc. org. uk
Скачать презентацию A risk based approach to sustainable procurement EAUC
91c3b21fa0c16175262d432a571684db.ppt