The Federal Budget 2022 saw the Government of Canada return to many pressing social priorities that had been put on the backburner by the COVID-19 pandemic.
Technology companies who work with the Canadian government should place close attention to new sustainability procurement rules.
The concept of sustainable procurement is widely known and adopted globally but is not prevalent in Canada- at least not yet. Sustainability expert Bob Willard defines sustainable procurement as “obtaining the best value for the most sustainable products and services from the most sustainable suppliers in alignment with the government’s goals.”
In practice sustainable procurement means that the government will begin to evaluate procurements based on the supplier’s corporate alignment with its carbon reduction goals. This approach works because it incentivizes the supplier community to maximize its sustainability to remain eligible for large government procurements. With Canadian public sector procurement, representing 13 per cent of GDP, sustainable procurement policies could make a significant contribution to a net zero economy.
Sustainable procurement should not be seen as something new or radical. In fact, Canada’s peers are well versed with the concept. The UK’s National Health Service just implemented a mandatory sustainable procurement policy for tenders over £5 million. Bidders are required to submit a carbon reduction plan.
Even as far back as 2016, the Norwegian Parliament proposed a public procurement regulation that advised public organizations to value environmental quality aspects at a minimum of 30 per cent in tenders.
And, closer to home, the 2021 United States’ Executive Order on Catalyzing Clean Energy Industries and Jobs through Federal Sustainability requires that “Agencies shall reduce emissions, promote environmental stewardship, support resilient supply chains, drive innovation, and incentivize markets for sustainable products and services by prioritizing products that can be reused, refurbished, or recycled…”
Sustainable procurement ideas and policies are also not limited to the public sector. Many businesses are also recognizing that procurement’s role in delivering value extends beyond cost savings and compliance and leveraging sustainable procurement to drive change amongst their own supply chains.
As a global organization with more than 700,000 people, Accenture is committed to Our purchasing power and multi-billion-dollar supply chain can connect to a culture of responsible buying on a global scale. Our procurement approach—which we call “Procurement Plus”—shapes how we work with suppliers and encourages a mindset of responsible buying, inside and outside Accenture.
Our Environmental Sustainability Program encourages our local and regional procurement teams to discuss greener procurement during their regular supplier meetings. By engaging suppliers on the benefits of environmental sustainability, we are increasing the number of participants that monitor, measure, and report their environmental impact. In 2020, 57 per cent of suppliers disclosed their targets.
One challenge that government might be facing is how to impose requirements like sustainable procurement without contradicting the government’s goal of increasing diversity amongst the supplier community. By imposing more requirements on suppliers, the government will need to carefully consider ways to maintain supplier diversity.
However, in our experience, the first steps should not be complicated and can avoid any detrimental impact to smaller suppliers. The Government of Canada could ask suppliers whether they have a carbon reduction strategy or if they align with Canada’s net zero goals. Questions like these get the community thinking about their strategy without jeopardizing their ability to do business.
Public Service and Procurement Canada (PSPC) has been tasked with developing new tools, guidelines, and targets to support the adoption of green procurement across the federal government. Business should be on the lookout for an announcement that is expected later in 2022.
Mark Lambert, Senior Managing Director – Canada Federal Public Service Lead, Accenture