What is sustainable construction procurement?
Procurement decision-making processes must change to encourage social and corporate benefits
This article was written for Construction Week by Saifee Tarwala, procurement manager at contracting firm TAV.
Studies show the world’s population is likely to double in the next 30 years. In theory, this is good news for the construction industry, because this will create the need for homes, schools, workplaces, and infrastructure.
But the world is made up of finite resources, and within 30 years, many of the natural resources that are currently taken for granted – such as oil, water, and some base metals and minerals – will be in very short supply. Moreover, climate change caused by greenhouse gas emissions will fundamentally change the way in which people live and do business.
Historically, procurement decisions have been made based entirely on three factors: price, quality, and time. These factors are still critical during procurement decision-making; however, in modern construction markets, both emerging and developed, sustainable initiatives are being incorporated with these established components.
Sustainable procurement is the process of purchasing goods and services in a way that accounts for the social, economic, and environmental impact that the purchase will have on people and communities. These purchases must also still achieve value, which means improving the efficiency of the money that is spent and the resources that are being used.
The process of construction alters the natural environment, and can disrupt its surroundings, affecting the built environment and how we live in it. Estimates suggest construction accounts for 33% of all waste in the UK, consuming 60% of its resources. Sustainable procurement must reduce material waste, carbon emissions, and energy and water consumption, as well as encourage biodiversity, and fair and sustainable economic growth. Procurement must deliver social benefits.
So, wherever possible, real estate and construction companies must make supply chain sustainability requirements contractually enforceable. In all cases, objective measures must be agreed so that non-compliance is highlighted and corrective actions can be quickly identified.
E-procurement can help overcome some of these issues, thanks to the way it streamlines processes, speeds up timeframes, reduces overheads, and expands marketplaces by providing easier sourcing and engagement of new suppliers. It also encourages the elimination of paper, ink, and machines to produce paper documents. E-procurement provides direct access to sustainable products and services that may be spread over a wide geographical area; this can be enhanced by e-catalogues, automated management, and more centralised control of existing suppliers.
It is also important to understand the key problems that an organisation wishes to address through its procurement programme, as this will influence supplier relationships. For example, a construction company can take responsibility for the carbon footprint of its concrete supply chain and the health issues relating to polyvinyl chloride. This could lead to innovation, encouraging new products that do not negatively impact the environment. Some of the region’s leading contractors have already set ambitious objectives to become zero-waste and carbon-neutral organisations within the next two years.
Sustainable procurement, although currently at a nascent stage in the region, can have wide-ranging and positive effects on a business – be it by cutting costs or increasing your revenue. Procurement – and doing it sustainably – is a critical issue that everyone in the industry must explore in greater detail.