19th March, 2021
The Irish Government and other major end clients operating in Ireland are increasingly setting ambitious sustainability targets with the goal of achieving net-zero carbon emissions by 2050 at the latest.
Commitments by these governmental, multinational and national organisations to reach net-zero are being extended across their entire value and supply chains including their built environment footprints. Construction projects from civil to residential are now increasingly seeing the imposition of targets and green procurement policies on their key contractors as part of end clients’ sustainability commitments.
An understanding of these higher-level client sustainability requirements will give a competitive advantage to all contractors, regardless of size, when completing pre-qualification and tender documents. A desire to build more sustainably while accessing compliant contractors will drive changes in the construction sector.
New carbon, waste and Green Public Procurement regulations combined with tighter climate change goals means the timing for sustainable change in the industry is now. The reality is if contractors do not adjust, the competition to comply with client and government requirements on tenders will increase and those who have not changed will be left behind. The next 10 years will focus on putting sustainability requirements into action where it will move from a ‘tick-box’ component to a ‘must-have’. Large companies based in Ireland have already made their sustainability commitments and will want to take their contractors on the journey with them.
Social and environmental considerations captured under Green Public Procurement, which were traditionally voluntary, are now set to become mandatory under policies like the EU Green Deal, Climate Action Plan 2019 and the Programme for Government. Green Public Procurement is a system to drive sustainability, promote resource efficiency and to progress circular economy ambitions. Put simply, it is a process where goods, services and works with a reduced environmental impact over their lifecycle are procured over goods, services and works with the same primary function that would have otherwise be procured. This is relevant given the importance of public sector spending on goods and services in Ireland.
The topic of sustainability and Green Public Procurement can be hard to decipher for construction companies, but practical changes can be made. Outlined below are 10 key points, relating to sustainability and Green Public Procurement, broken down into two steps.
Step 1, points 1-5, can be implemented by all construction companies, but especially small to medium-sized businesses, which will ensure compliance with legislation and development of strategies which might already be in place. Step 2, points 6-10, is where larger contractors need to be. These are more ambitious steps for companies who want to be seen as leaders in sustainability and want to move towards gold standards. This is especially true for point no.10, setting Science Based Targets and reporting through CDP, which are seen as the gold standard in terms of carbon emission target setting and reporting. As mentioned earlier, there are high expectations on contractors working with the government or a major client who has set ambitious sustainability targets. The key points below can be used by contractors to demonstrate leadership in sustainability within the built environment.
Step 1- Compliance & Development
1. Implementing an Environmental Management System accredited to ISO 14001.
2. Undertaking baseline environmental assessments of main contractor and the supply chain.
3. Setting wider sustainability KPIs to include biodiversity, diversity & inclusion, volunteering, social interactions and community development.
4. Updating tender return documents to reflect Green Public Procurement requirements.
5. Include Life Cycle Costing assessments in tender returns. These are key to Green Public Procurement.
Step 2- Leadership & Gold Standards
6. Develop sustainable procurement teams for public procurement tenders and for projects with green building certification requirements, e.g., LEED, BREEAM.
7. Introduce circular economy practices.
8. Evolving company websites with sustainability sections.
9. Collecting Scope 1 and Scope 2 carbon data and preparing strategies for Scope 3.
10. Setting Science Based Targets and reporting through CDP is seen as gold standard for companies who are targeting ambitious corporate climate action.
Key competitive and financial advantages which can be achieved by strengthening sustainability credentials are highlighted below.
Competitive tenders- A contractor who can actively demonstrate compliance with a client’s requirements as part of the pre-qualification and tender process will have a competitive advantage and will score higher on tender returns. Including environmental and social requirements as part of bid, tender and estimating teams will build strong procurement strategies.
Save money- Measuring environmental performance baseline of the main contractor and the supply chain and implementing innovative reduction targets will reduce overheads which can result in lower preliminaries for tender submissions. Significant cost reductions can result from improving operational resource efficiency through better management of natural resources like fuel, water and energy, as well as from minimising waste.
Company improvements- For companies starting to implement sustainability strategies, levering systems, committees, working groups and reporting hierarchy structures already in place with existing Health & Safety and/or quality systems will make sustainability a top priority. People are likely to work for and stay with a company that has a strong sustainability plan. Therefore, companies that adapt quickly to sustainability can attract and retain top talent.
Contact the Davy Horizons team at sustainability@davy.ie to gain insight on how sustainability and Green Public Procurement can become an opportunity for the built environment.
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