The path to net-zero procurement

From the December 2022 print edition

We’re getting closer to 2030, an important milestone year on the path to net-zero emissions
by 2050.

As we do, the procurement function cannot be overlooked by those hoping to achieve a net-zero, circular, and inclusive economy. Incorporating sustainability requirements into the procurement of goods and services is a tangible, every-day practice to create a positive effect within their community and beyond by creating demand for sustainable products.

The Canadian Collaboration for Sustainable Procurement’s (CCSP) 12th-annual Report on the State of Sustainable Public Procurement in Canada highlights trends, best practices, and case studies from the CCSP’s network of 40 municipalities, crown corporations, and post-secondary institutions. This group of institutions employs a holistic view of sustainable procurement, encompassing environmental, social, Indigenous, and ethical pillars – which encourages members to be open to the sustainability risks and opportunities within any procurement.

Drawing from highlights in the CCSP 2021 Annual Report, here are five procurement strategies for public organizations to make a positive impact:

Electrification to help achieve climate goals
In 2021, the global increase in catastrophic climatic events was noticeable, including floods, smoke, heatwaves and windstorms. The COP26 conference in Glasgow focused on the transition towards a more sustainable, low-carbon world. The conference was a platform for leaders to set a global commitment to achieve net-zero emissions by 2050.

Public sector procurements are a key factor in the scale of work done to slow climate change and reach global 2050 goals. The City of Ottawa purchased electric boilers for installation in three of its largest recreation facilities – projecting to reduce the facilities’ greenhouse gas (GHG) footprints by 320 tonnes of CO2 annually. The cost of the project is now likely to be repaid to the City in six years. This purchase stemmed from a recommendation from the City’s Corporate Energy Management Office (CEMO) to electrify the heating systems based on a combined costs and carbon analysis.

In particular, hybrid and electric vehicles are taking over the market when it comes to green fleet initiatives. Through the 2021 Zero Emission Transit Fund, the federal government is investing $2.75 billion over the next five years to support the electrification of public transit and school bus operations.

The City of Brampton deployed the largest standardized battery electric bus fleet (globally, to date), along with high-powered overhead on-route charging systems – the first step in completely electrifying the City’s fleet. The District of Saanich launched a district-wide e-bike incentive pilot program
in October and purchased a small e-bike fleet for district staff. This procurement demonstrated leadership in mode shift towards active transportation. It also helped to reduce pressure on the existing pool of fleet vehicles, providing more climate-friendly transportation options at a lower price than sourcing multiple new electric vehicles and charging infrastructure.

Program pieces to enable social procurement commitments
Social procurement has gained traction recently across the public sector. The social pillar focuses on advancing diversity and inclusivity by creating economic opportunities for equity-deserving and other target populations. This includes purchasing from suppliers that offer social value, such as non-profits, social enterprises, and diverse suppliers, as well as mandating suppliers to deliver social value as a condition of the contract. Many city councils recognize the importance of this and are asking staff to act on social procurement. It’s important to ensure that staff can put the right pieces in place to support these actions.

The City of Toronto’s Social Procurement Program is one of Canada’s flagship programs
of its kind, improving access for diverse suppliers to municipality’s supply chain and enabling procurement spending to drive inclusive economic growth. The City has a social procurement policy, utilizes a social value supplier database, invites certified diverse suppliers to attend “Doing Business with the City” vendor workshops, and hosts supplier diversity trade shows.

The City of Calgary created their own Public Value Through Procurement Policy, Benefit Driven Procurement Strategy, and a Benefit Driven Procurement Leadership Questionnaire. From council approval in September 2021 until January 2022, over 60 requests for proposals (RFPs) have included the questionnaire in their evaluation criteria. These procurements have resulted
in contracting local businesses, creating employment for underrepresented groups, and supporting suppliers who are implementing their own social procurement and living wage policies.

Support local economies and people
COVID-19 highlighted the inequalities and vulnerabilities of global supply chains, thus the importance of investing in local economies. Public sector organizations are looking to their own communities and conducting match-making analyses to identify product and service categories that can be fulfilled by local businesses.

Especially when possible under trade agreement thresholds, put in the extra mile and support local businesses. Thompson Rivers University (TRU) demonstrated this by purchasing a set of custom, wooden coffee and end tables from a local woodworking company in Kamloops, BC. The tables were crafted using local and salvaged wood from a neighbourhood development project, that would have otherwise gone to landfill. The purchase also had comparatively fewer emissions because of the manufacturing process as well as reduced delivery transportation.

Cities can also leverage local impact in larger procurements by requesting that contractors engage with local social enterprises and non-profits that support equity-seeking individuals. The City of Vancouver released a request for application (RFA) to prequalify companies specializing in emergency, abatement, and repair restoration services. The RFA required that the awarded company complete a portion of the services by sub-contracting or partnering with social enterprise organizations that help hire people facing employment barriers.

Include justice in your EDI and Indigenous reconciliation efforts
Equity, diversity, and inclusion (EDI) has been a practice for a few years, but adding ‘justice’
to the acronym expands the conversation. Justice shines light on who is being brought into the conversation, creating equal opportunities, and asking if our procurement policies and practices really work for everyone. The City of Toronto has worked on creating a Transportation JEDI category in their engineering roster calls to make it easier for smaller firms to compete.

The City of Winnipeg is also putting this in action with a recent convergence of interests for an RFP for the provision of security services at a library that included a strong set of social, ethical, and Indigenous related requirements. The RFP was awarded to a security services organization that understood the bid requirements – namely, committing to hire at least 50 per cent Indigenous peoples, as well as paying a living wage to all guard staff. As part of the contract, the City began providing training for security staff in life-saving procedures, conflict de-escalation, anti-racism, cultural awareness, harm reduction, and trauma and mental health awareness. Multiple stakeholder and community groups engaged in the process.

Leverage peers and turn up the collaboration
In 2021, workplaces continued through the second year of the pandemic and witnessed the outcome of the learning curve on virtual collaboration. Despite not always being in the same room – collaboration shines through.

The partnership between procurement and sustainability is especially important for high impact, and for sustainability thinking into the planning and needs assessment stages of the procurement process. This powerful partnership can deliver a compelling message by communicating in internal working groups and sharing cross-developmental goals. Leadership listens when sustainable and procurement groups champion common values to the organization.

This year, the City of Mississauga established a cross-functional team who convene quarterly to address sustainable procurement opportunities; the City of Ottawa formed a cross-departmental Social Procurement Advisory Group; and the City of Kelowna’s purchasing manager engaged the City’s cross-functional Sustainability Action Team to raise awareness around sustainable procurement.

Collaboration amongst peer organizations is another avenue ripe with opportunity, whether through group purchasing initiatives or aligning on standard sustainability criteria. Sheridan College, as part of the Halton Co-operative Purchasing Group (HCPG), facilitated a contract with a new supplier of winter entryway mats. The new mat rental program includes a re-designed washing process to reduce CO2 emissions by using mats with increased water retention technology, as well as reduced emissions from fewer fleet vehicles in pick-up/delivery.

Organizations are leveraging procurement practices to drive broader corporate sustainability goals like reducing waste and advancing circularity, reducing GHG emissions, supporting local economic development, increasing supplier diversity, and contributing to Indigenous reconciliation. Don’t wait to get started in your own institution.