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Supplier relationships with the public sector have come under increased scrutiny in recent years as strained supply chains, rising costs and stronger demands around sustainability have begun to make an impact. The public sector naturally has stricter rules of engagement with its suppliers than other industries due to the critical nature of the work it undertakes, and the pandemic has only amplified this.
However, with the increasing need to tackle wider planetary challenges, such as resource preservation and climate change, the sustainable rules of engagement are creating a new supplier dynamic.
Departments throughout the public sector, whether it be health, defence or education, all have key sustainability goals to hit. When businesses are supplying a service, the key question they must answer now is: how is what they are supplying going to help meet the sustainability and social goals of the sector? If they are unable to answer those questions, they will miss out on securing contracts altogether, and probably lose the contracts they are already engaged on.
For the IT industry in particular, there is one major target that all suppliers and partners should have in mind when working with the public sector – the Greening government ICT and digital services strategy 2020-2025. This strategic policy sets out how the government will work in partnership with industry and other sectors to provide ICT and digital services to help achieve the United Nations’ Sustainable Development Goals, implement the UK government’s 25-Year Environment Plan and help meet the government’s net-zero obligations and commitments.
The three rules of the greening ICT policy
We have seen the supplier landscape grow more challenging of late as further sustainability targets are added on top of continued disruption. Yet as a sector going through heavy digital transformation, there is strong demand for reliable, high-performance IT in the public sector. Within the greening government ICT policy, three business rules are outlined that suppliers are asked to follow to support the public sector and foster healthy relationships.
Sustainability is no longer a nice to have, it’s now an imperative for working with the public sector. Grounding every interaction in these rules will help organisations meet sustainability targets and, ultimately, ensure suppliers have a better chance of securing and retaining contracts.
Rule 1: Going net zero in carbon
The public sector has the spotlight regarding hitting net-zero targets. With the government setting targets for other businesses to follow, ensuring it raises its own standards is essential. The current government message around reaching net zero is a target of 2050, but continued monitoring of progress is likely to mean a growing focus as years go by. By eliminating Scope 3 emissions where possible through its supply chain, the public sector can make huge steps towards carbon-neutral processes on the way to net zero.
Suppliers can help the public sector to go net zero by decarbonising their own processes, and using innovative procedures such as remanufactured hardware is a key way the IT channel can do so. By adopting carbon-neutral processes, suppliers can help the public sector to reduce Scope 3 emissions by cleaning up its supply chain, as well as assisting with knowledge and expertise on their specific industry. Using IT hardware that minimises its impact to the planet is a good first step, with remanufactured technology now a leading alternative to brand new.
Rule 2: Creating a circular economy
The long-term success of a sustainable public sector will ultimately depend on the development of a circular economy within its supplier base. Reducing carbon emissions in the short term is a priority, but the long-term success will depend on a developed circular economy to reduce the stress that carbon reduction has on processes. Protecting natural resources is also a growing concern and carbon offsetting can only go so far in the long term.
Resource preservation should be the number one overall goal of a sustainable public sector, ensuring that the natural environment is exploited as little as possible, while prolonging the already-scarce resources that the planet has. The circular economy is central to this by re-utilising already-produced resources and materials.
The supplier’s role in the future of the public sector’s sustainability is not just decarbonising its own estate to support with net-zero targets, it’s adopting processes rooted in the circular economy. By creating a circular economy that the public sector can operate within, suppliers in the IT channel can improve time to delivery, reducing the growing pile up of e-waste and positively impact their own bottom line by taking in old technology to be re-used.
Rule 3: Increasing assurance in the supply chain
Reporting in public sector supply chains is now a top priority, both to ensure environmental targets are hit, and also that wider ESG initiatives are met. Lack of assurance is a key barrier to healthy supplier relationships, with public sector organisations demanding transparency over supply chains and needing the confidence that they can meet demand.
However, while sustainable targets might be the most widely reported focus, cleaning up the supply chain goes beyond the E of ESG targets. Social and governance initiatives will be looked at to ensure that forced, bonded and modern-day slave labour is eradicated from supply chains, as well as assurance that products are not made from conflict minerals.
Operational resilience also remains a key factor in assured supply chains to protect the critical services supplied by the sector. With the recent global chip shortage and delays due to the pandemic, supply chains have shown they are not bullet-proof and cannot always meet demand. With the new rules of engagement, creating an assured, resilient and transparent supply chain can help suppliers not only win contracts, but also become reliable and trusted partners to the public sector.
With global disruption likely to continue, utilising the existing resources sat in the mountain of e-waste created over the past few decades is a good place to start. And with the technology available to us to create good-as-new second-life hardware, this should be the top of every supplier’s priority list.
The opportunity lies in sustainability
There is a huge opportunity for the IT channel to be the front-runner in sustainable engagement with the public sector by abiding by the three rules outlined above. This will not only improve supplier relationships with the sector, but will also help it reach its sustainability goals. The public sector needs effective, up-to-date technology as it undergoes digital transformation but wants to do so sustainably and on a tight budget.
The latest innovative technology and processes such as remanufacturing allow resellers and suppliers to support the sector across its three rules of net zero, the circular economy and assurance. It has both short-term returns of cost saving and reliability of supply as well as long-term investment into the sector through sustainability and circular economy processes.
Working with the public sector in a sustainable manner is now a necessity and the IT industry should be taking the lead in best practice, but suppliers must either learn to adapt to meet the new sustainable rules of engagement or seek support in doing so, otherwise they will ultimately miss out on securing contracts because of a lack of focus on sustainability targets.