Procuring and Commissioning for Carbon Reduction 

Briefly describe the initiative/ project/service; please include your aims and objectives

The objectives of this project were simply to ensure that Manchester City Council’s approach to procurement of goods services and works provided a playing field that is tilted towards suppliers that share the council’s commitment to environmental matters. Like the majority of Local Authorities, MCC declared a climate emergency in 2019 and set a target to achieve carbon neutrality by 2038 (12 years ahead of the UK Government’s target date of 2050). The council adopted a science-based approach and is widely recognised as having led this agenda by working in partnership with major organisations and through the establishment of the Manchester Climate Change Agency and Partnership.

MCC has led by example, reducing the Council’s direct carbon emissions by 54.7% between 2010 and 2020, exceeding the target of 41% that was set. Having declared a climate emergency in July 2019 with a target to be carbon neutral before 2038, the council realised there was reliable data that showed they were clearly making good progress on Scope 1 (directly attributable to own actions such as from buildings and vehicles) and Scope 2 (from the production of energy procured for heating, lighting and cooling). There was a clear need to start thinking about how to address Scope 3 emissions (the emissions that the organisation is indirectly responsible for through supply chain such as from buying products from its suppliers). Scope 3 emissions are seen as higher than Scope 1 and Scope 2 and the most difficult to accurately measure or to influence due to the ned to in obtain accurate data from multiple sources, the multi-national nature of supply chains and the lack of a standard system for measurement. Until an effective and accurate measurement solution is generally available, MCC decided to take an innovative approach in order to work with suppliers to achieve these reductions.

Having been one of the very first councils to successfully apply a 20% social value weighting in tenders to increase the likelihood that suppliers share our commitment to social value, the council decided to apply the same principles to the issue of Zero Carbon. In the same way that the 20% Social Value weighting ensures that suppliers who share the council’s values and ambitions are more likely to win contacts, it was decided that a similar 10% weighting applied to Zero Carbon would help suppliers that are taking action to improve their carbon footprint to be well placed to win contracts. This is a radical approach that has not been adopted by any other Local Authority in the UK so there was a need to test the approach and fully understand any issues that may arise as a result. It was therefore decided to pilot the new approach on a range of highways projects during 2021.
Given the strict regime that applies to Public Sector Procurement in England and Wales (Scotland and N. Ireland have their own regimes), it was decided that the council needed to address several risks around the possibility that suppliers would object to the principles themselves or to the way in which they were applied which could lead to a challenge to the result of a procurement exercise and ensuing delay to implementation of a project.

In order to be cover the risk of a challenge to the evaluation of a bidder’s approach to carbon reduction, it was necessary to ensure that evaluators have the appropriate skills to score and provide meaningful feedback. Fortunately, the council had decided to work with the Carbon Literacy Trust to ensure that every member of staff (over 7500 people) would be required to undertake carbon literacy training. This meant that people would be provided with the basic skills to understand carbon reduction principles and to be encouraged to think about how to apply these skills to writing specifications for services and to evaluation of prospective suppliers’ proposals. The findings from the pilot exercise were that suppliers welcomed the opportunity to be evaluated on the basis of their commitment to carbon reduction and worked with the Highways team to help develop inciteful and targeted questions about carbon. Following evaluation of the pilot, the council decided to roll out this approach across all procurement practices in a rewrite of the Social Value policy that was adopted in Spring of 2022. 

What are the key achievements?

As outlined above, and widely recognised, Scope 3 emissions are notoriously difficult to evaluate and to control for a variety of reasons so it is not possible to provide data, for example, as to the number of tons of carbon saved by this initiative. It is however clear that the council’s suppliers are taking a significantly more proactive approach to carbon reduction as a result of the policy.
Examples of these achievements include:
• A reduction in plastic and polystyrene packaging for ICT equipment delivered though the council’s “End User Device” strategy and a commitment from the supplier that all machines replaced under the contract will be either repurposed for use by voluntary sector organisations or provided to those identified as suffering from digital poverty. If equipment is at the end of its useful life, no waste goes to landfill and the recycling operation is carried out in a local prison workshop established for this express purpose with inmates receiving training and developing transferrable skills that will help them adapt successfully to life after release from incarceration.
• The council’s concession contracts for catering and entertainment on public spaces, whether in the city centre or in the suburbs and parks, all require a commitment from suppliers to eradicate all avoidable single use plastics and recycle materials as much as possible.
• The supplier that provides the winter ice rink in cathedral square has committed to using electricity  sources
to power the compressors that freeze the surface instead of the gas guzzling, polluting diesel generators of the past.

The principal achievement however has been to ensure that all contract managers have increased levels of carbon literacy and are thinking carefully about the carbon implications of the way in which they specify services or approach the design of capital projects. Suppliers are also highly aware that the council is looking to work with companies that share the council’s clear commitment to carbon reduction and achieving net zero by 2038 and are attaching increasing importance to environmental issues across all of their operations. 

How Innovative is your initiative?

As outlined above, and widely recognised, Scope 3 emissions are notoriously difficult to evaluate for a variety of reasons so it is not possible to provide data as to the amount of carbon reduction brought about by this initiative. It is however clear that the council’s suppliers are taking a proactive approach to carbon reduction.

Examples of these achievements include:
• A reduction in plastic and polystyrene packaging for ICT equipment delivered though the council’s “End User Device” strategy and a commitment from the supplier that all machines replaced under the contract will be either repurposed for use by voluntary sector organisations or provided to those identified as suffering from digital poverty. If equipment is at the end of its useful life, no waste goes to landfill and the recycling operation is carried out in a local prison workshop established for this express purpose with inmates receiving training and developing transferrable skills that will help them adapt successfully to life after release from incarceration.
• The council’s concession contracts for catering and entertainment on public spaces, whether in the city centre or in the suburbs and parks, all require a commitment from suppliers to eradicate all avoidable single use plastics and recycle materials as much as possible.
• The supplier that provides the winter ice rink in cathedral square has committed to using electricity from renewable sources to power the compressors that freeze the surface instead of the gas guzzling, polluting diesel generators of the past.

The principal achievement however has been to ensure that all contract managers have increased levels of carbon literacy and are thinking carefully about the carbon implications of the way in which they specify services or approach the design of capital projects. Suppliers are also highly aware that the council is looking to work with  that share the council’s clear commitment to carbon reduction and achieving net zero by 2038 and are attaching increasing importance to environmental issues across all of their operations. 

What are the key learning points?

From a technical procurement viewpoint, it was recognised before this approach was applied that allocating 10% of the available tender score to Zero Carbon in addition to the 20% applied to Social Value would reduce the score available to assess quality and price of a bidder’s proposal for a contract. This could have resulted in a supplier submitting a low quality bid at a low price but with an impressive and high scoring proposal for Social Value and Zero Carbon and therefore winning a contract that would not provide an acceptable service to residents of the city.
This fear has been overcome by application of a “quality threshold” within the tender evaluation process that prevents a bidder that achieves a score below 60% of the maximum available quality score from being considered for the contract. Another learning point is that there is a need to invest resources into contract management to ensure that proposals for Zero Carbon are played out in full over the life of the contract. Fortunately, the council has invested in a new contract management that will ensure that KPIs developed from a supplier’s proposal to deliver a contract will be monitored carefully with appropriate evidence of achievement over the life of a contract.
There was also a need to make sure that suppliers fully understood what was being asked of them and how to ensure that they are able to achieve a suitable score from the 10% available for environmental issues. Guidance was therefore produced (and is constantly kept under review) to be issued with tender documentation that provides relevant advice and signposts bidders to sources of support to assist them in developing credible and compelling submissions that include realistic and achievable measures.

There is a potential for contract managers to copy and paste from one set of tender documents to another. It has therefore been necessary to ensure that tender documents are tailored to the nature of the contract and give careful thought to environmental issues relevant to the service, goods or works being procured. This has placed an additional burden on procurement teams to develop the necessary skills to challenge specifications and ensure that the impact of this initiative is maximised. Final learning point is that there has to be a strict “no exceptions” policy for this. Senior leaders at the council are strongly committed to combating climate change and see this as a key policy that demonstrates leadership across the city of Manchester, leads by example and urges others to adopt similar uncompromising approaches. The Head of Integrated Commissioning and Procurement is empowered to agree a relaxation of the requirement to include the 10% ZC weighting in exceptional circumstances but there have not been any instances in the 2 years since the policy was introduced where this has been necessary. 

Additional Comments

MCC’s 20% weighting for social value previously included a question on low carbon. This has now been taken out of the 20%. The previous zero carbon question generally attracted low scores due to suppliers’ not applying a high level of priority to the environment. This approach of applying 10% to the environment alongside 20% for Social Value has stimulated an improvement in the quality of proposed and delivered low carbon proposals as well as an increase in the social value that is delivered.