AMEE/Spend Network Study Reveals High-Risk Supply Chain in UK Government Spending

A new study has been undertaken to measure the carbon impact of the UK Government supply chain - it's the first of its kind  and uses each Government Department’s open spending data to identify spending with suppliers. It's an important area to measure properly because UK Government procurement has a powerful impact on the economy with overall spend contributing to more than 40 percent of GDP, and spend on suppliers represents a large component of overall spend. This has the potential to provide more opportunity to collaborate with business to fight climate change. And why was it carried out?

A recent UN Climate Summit in New York highlighted the many Government initiatives that address climate change, one of which being support for new technologies, including the UK effort to accelerate the controversial fracking technology. David Cameron joined 120 world leaders and more than 800 business, finance and civil society figures at the UN to reach a consensus on climate agreements, in the build up to negotiations in Paris, December 2015. He said: “We must agree a global deal in Paris next year. We simply cannot put this off any longer.”

He then explained the UK's strategy: “We are investing in all forms of lower carbon energy including shale gas and nuclear.” Together, AMEE, which helps businesses become more energy-efficient, and Spend Network, which analyses government procurement, believe that the best way a government can take action is to actually spend on sustainable, resilient companies that minimise their impact on climate change. They conducted the study "Open Government Supply Chain Sustainability" to explore carbon footprint, efficiency and financial risk of 17 central government supply chains.

Departmental open spending data on companies is supplemented by data on supply chains and carbon efficiency for individual companies sourced from AMEE.  The findings reveal some very interesting facts, including "more than £844 million was spent on high financial-risk companies by central government in 2013/14." The analysis also shows "wide variations in carbon efficiency. Over the same 12-month period, £4.6 billion was spent with companies that have low energy and carbon efficiency (when compared to better-performing peers)."

The research shows that "Government procurement could influence up to 97 million tonnes of carbon emissions from all supplier activities, representing 15 percent of total UK emissions, with 4.7 million tonnes directly related to Government activities." The researchers believe that a concerted effort by Government, engaging all suppliers to reduce their total carbon footprints, would provide a large contribution toward reducing total UK emissions and achieving the UK’s carbon budget.

The study makes for some eye-opening reading, highlighting the best and worst performers. It is a socially valuable tool that will be useful for policy makers and citizens interested in procurement, supply chains and sustainability.  It gives the public a an insight into the environmental impact of the buying decisions made by Government and gives Government a data-driven opportunity to cut costs, reduce risk, and achieve its carbon budget goals.

The data from the research are available through a public portal on AMEE’s website.

And a clear, concise infographic sums up the main findings on AMEE’s blog.

Visitors can explore the data to compare departments, find detailed analytics for each department, and also search through all listed suppliers to see the spend they received and their risk and environmental performance data.

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First Voice

  1. Stephen Heard:

    Its a pity that this government, you know the one that stated it was going to be the greenest government ever, disbanded the CESP (Centre of Excellence in Sustainable Procurement) operated by the old OGC.

    The other conclusion to this report is that the excellent work undertaken by the NHS Sustainability Development Unit (SDU) has had a positive impact as the carbon footprint of the DoH supply chain is small in comparison to other similar sizes government departments.

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