greening council supply chains through carbon disclosure

The London Borough of Camden spends a staggering £500m a year on goods and services. Birmingham spends an even more astounding £1.3bn per annum. Imagine how much of a difference could be made if all that procurement budget was spent with the benefit of the planet in mind. But trying to green council supply chains is not for the fainthearted. Every suggestion seems to lead to a cul-de-sac called EU trade rules. And yet, if you have the stamina, there is a lot that can be done to minimise carbon footprints and promote wider concepts of sustainability.

The first thing to do is always to specify eco goods like recycled paper or gas-fired buses. This is fine under EU trade law because it is part of the specification. You can specify recycled paper, but if you specify paper then you can not judge the tender based on whether the paper is recycled or not.

If reducing carbon emissions or improving air quality are part of the organisation’s goals, then so much the better. Our favourite example is the one about the Helsinki buses. The city council decided to tender for gas-fired buses because the carbon emissions from gas would be lower than diesel, there would be no noxious emissions and they would be less noisy. A maker of diesel-powered buses took them to court arguing that this was in breach of EU competition rules. No, said the court – the gas engines were in the specification; the reasons stated were all organisational goals; and, most importantly, council procurement departments procure for the benefit of citizens not for the benefit of the business.

Carbon disclosure is another useful tool. The Carbon Disclosure Project is a charity that started as a way for big investors like pension funds to assess the carbon risk of their investments. On behalf of those big investors CDP asked companies to disclose their production of greenhouse gases and any strategy they may have for reducing them. Some of the multi-nationals that were asked to participate then started to use CDP to carbon audit their own supply chains. More than half of the world’s stock market capitalisation, and 77% of the Global 500, is now covered by the CDP process.

CDP photoCDP logo

cuttingthecarbon founder Alexis Rowell had his carbon disclosure "epiphany" when he came across the CDP in 2007 and saw the work they were doing with institutional investors and corporate supply chains. It occurred to Alexis that the carbon disclosure process could be used to raise awareness about climate change among a public authority’s suppliers and begin the process of decarbonising their supply chains. Alexis persuaded Camden Council to sign up to the CDP process. This led to the foundation of the CDP Public Procurement Programme which many local authorities and central government departments are now part of or have been through.

cuttingthecarbon helped CDP to align the programme more closely with the needs of councils.

What was not available when Camden signed up to the CDP process were national indicators like NI 185 – the carbon emissions of a local authority. NI 185 requires councils to report their direct emissions as well as, crucially, those of their outsourced services. Most of the services Camden delivers – eg rubbish collection, recycling, housing repairs, highways maintenance, upkeep of parks - are in fact outsourced.

Gathering outsourced emissions data for NI 185 is a headache. The supplier needs to agree to do it, they need to know how to do it, and they need to be able to apportion their emissions by customer. cuttingthecarbon has been helping CDP to help local authorities with this. The CDP can help local authorities with supplier engagement workshops and help suppliers apportion their emissions by customer.

In its NI 185 guidance to local authorities DEFRA says that if a council cannot obtain the relevant data from a supplier of outsourced services, then it should require that the information be disclosed the next time the contract is negotiated. In other words, according to the UK government, it is perfectly acceptable to ask suppliers to disclose their carbon emissions as part of the procurement process.

So now local authorities have a tool that potentially helps in three key areas: 1) collection of information for NI 185; 2) sustainable procurement; 3) emissions reduction. On that last point - the total emissions of all suppliers reporting to members of the 2008 CDP Public Procurement Programme members was equal to 0.6% of global emissions. That shows the potential multiplier effect when procurement is used as a lever for change. In other words, if all local authorities embedded carbon disclosure into their contracts, and copied the example of Helsinki City Council wherever possible, then they could quite literally change the world!