In-Procurement: Is procurement ready for the NHS’s major green announcement?
By Sarah Stone
We like to talk about how ready the NHS is for a range of challenges.
Is it prepared for winter? Will it cope with a new pandemic? Can it deal with an ageing population?
But recent developments pose a new question: are businesses ready for the NHS?
In an announcement that went somewhat under the radar earlier towards the end of last year, the country’s largest public sector organisation said it would only do business with companies committed to net zero.
That means, from April, nobody gets an NHS contract beneath the value of £10,000 unless they can specify and set out how they are going to be carbon neutral by 2050.
Samtaler’s article in ‘In-procurement’ Magazine - Jan/Feb 2024
This is going to prove a major obstacle for operations of all sizes when it comes to winning work from one of Europe’s biggest employers, and preparations need to start now.
The evidence already tells us that even large organisations which should be able to achieve this with ease have not yet done so.
Research has shown only around 560 companies in the UK have publicly committed to net zero, and only 18 of those are in the health and pharmaceutical sector.
Considering the NHS in England has an estimated 80,000 suppliers, there is a gigantic gulf looming concerning companies who are not providing what the health service is looking for when it comes to the environment.
Addressing this now will help those who still have a way to go when it comes to climate commitments, and the NHS itself, which then won’t risk having to go back on this bold pledge due to a shortage of eligible suppliers.
The updated NHS guidance dictates two things; that these climate change pledges must be board-approved and then clearly signposted on the company’s website.
Thereafter, they may have to provide evidence to demonstrate how this will be achieved.
The justification set out at the beginning of this announcement makes clear just how serious NHS bosses are about this change.
“This sets out the steps suppliers must take to align with the NHS net zero ambition through to 2030,” it states.
“To comply … a supplier must confirm the bidding supplier’s commitment to achieve net zero by 2050 or earlier for their UK operations … and clearly signpost and publish the commitment on the supplier’s website.”
None of these are straightforward to do, even for those larger companies fortunate enough to have a sustainability manager or equivalent staff.
It’s especially difficult to rush this in as part of a tender process which is likely to already be arduous and carried out under pressure.
So what should companies worried about this change do?
There are a range of online tools, including the SME Climate Hub, which allow a business to measure its carbon footprint and access courses which show them how to counter it.
Once a business knows its environmental contributions, it can then work out the scale of action required to offset them.
Actions can include reducing energy use at office sites, using less lighting, printing and depending less on appliances.
The guide also sets out how emissions can be offset by using renewable energy or even installing small-scale projects on site.
Steps such as reducing transport, or changing the way goods and people move about (vehicle sharing, using public transport, relying less on petrol and diesel fleets) can also make a significant dent in an organisation’s carbon footprint.
The guide even reveals that reducing the commute of workers can have a positive green impact on a business, whether that’s increasing hybrid working or incentivising alternative modes of travel to and from the office.
If a firm makes a public climate commitment through the SME Climate Hub, that allows them to be counted in the United Nations’ Race to Zero Campaign.
All of this will be helpful evidence come April when bidding for NHS-related work, especially as a public pledge can then be used as proof a business does indeed have a net zero commitment.
The announcement by the NHS merely underlines the increasing importance of social value when it comes to bidding for public sector work.
A business which sorts out its green credentials won’t just qualify for major health service contracts, it will be able to increase its own reputation among a British public which is increasingly conscious about climate change and the wellbeing of the planet.
Like all social value measures, by achieving one thing businesses can go on to accomplish much else.
The announcement brings a major change in that billions upon billions of pounds of public spending will now be subjected to new criteria.
But it won’t end here.
Where the NHS goes, other public bodies will inevitably follow, and it won’t be long before almost every government-linked contract demands similar commitments.
By getting ready now, the UK’s business and procurement community will be well ahead of the game when these changes come into force.
Article was published in InProcurement Magazine January/February 2024