Our FOI Request has revealed the need for minimum sustainability weightings in council tender processes
At Gusto Group we are always considering how the UK can more effectively transition into a lower-carbon economy, and we know that improving the sustainability of our country's council suppliers presents an opportunity to make a significant difference.
So we recently carried out an FOI request to gauge the role that sustainability plays in our country’s council processes.
It revealed inconsistencies in sustainability assessments in council tender processes across England, demonstrating the need for higher mandatory environmental weightings.
Key findings
Our research revealed a varied landscape with many councils clearly willing to consider sustainability accreditation and social value in their tendering process but with some lacking the knowhow on how to do so effectively whilst remaining fair.
95% of the 282 councils who responded were not able to give figures as to the number of ESG-focused businesses (B Corp certification, ESG mark or a similar certification or award that recognises a commitment to ESG or sustainability-focused initiatives) within their supplier list. This is either because the information was not recorded or not easily accessible. As a result, councils may not have a sense of how environmentally conscious their suppliers truly are, or do not feel the need to keep a record of this.
Of those who were able to respond, the majority (61%) reported that B Corp certification (or similar*) was not part of their current tender process and 57% were not considering adding it in the future, whilst a third (33%) didn’t hold the necessary information to answer the question.
When asked how confident councils would feel about knowing how to prioritise B-Corp companies (or similar) in their tender process on a scale of 1 to 10, over a third (31%) gave the answer of 1 - being extremely unconfident, whilst 14% felt very confident. 31% of respondents also felt that they would benefit from guidance on how to prioritise B Corp companies (or similar).
However, this isn’t the case across the board. 25% reported that they already had their own social value evaluation process or ESG criteria in place and 13% would consider doing so if the tender specifically required, or would benefit, from it. The majority 69% felt that they wouldn’t benefit from guidance.
Many also highlighted the complexities of keeping council processes fair, transparent and accessible to all, and pointed to the need to choose the best supplier (value and quality) for that specific job, with the term Most Advantageous Tender (MAT) raised several times.
Empowering and incentivising mission-led businesses
To drive the UK’s our chairman and founder Steff Wright, argues that B Corps and other mission-led businesses need to be empowered and incentivised, and that giving them a better chance at becoming a council supplier would be a hugely effective way to do so.
Steff also points to the responsibility of councils to take steps to improve the sustainability of their suppliers. 600 councils in the UK signed up to the climate emergency, and in doing so made a commitment to take proactive action to reduce their environmental impact, yet the majority still haven’t introduced any mechanism to ensure that their supply chain has a net zero transition plan in place.
He notes: “I completely understand the need for councils to run a fair, transparent and competitive tender process that doesn’t price out SMEs and secures the best business for the job.
“But if we want to turbo charge the economy and have any hope in reaching net zero, we need to start finding ways to recognise and incentivise environmentally conscious businesses. We should be pulling out all of the stops to encourage businesses who are willing to innovate and push boundaries.”
As the Chairman and Founder of a group of companies operating in hard to abate industries such as manufacturing and construction, Steff understands the challenges that business leaders face when trying to balance sustainability and commerciality.
And at a time that pressures on businesses are steadily increasing he believes we need to be doing more to help those who are prioritising environmentally conscious innovations, sometimes even at a detriment to their profit margins. Currently only 1 in 4 small businesses expect to reach net-zero by 2050.
Founder of Mission Good and our Head of Growth, Jenny Garbis, agrees, “As someone who’s worked closely with mission-led startups and understands how psychology shapes human behaviour, it's clear that extrinsic motivators drive action. If we want more businesses to embed sustainability at their core, we need to create an environment where doing good is also commercially rewarded. Councils have enormous power to shape markets, and by embedding stronger environmental criteria, they can send a powerful signal that values-led business matters."
Steff adds: “If businesses had a commercial reason to invest time in considering how they operate, minimising their carbon footprint, looking at their own supply chains and perhaps thinking about accreditation, then no doubt many more would.
“Giving these businesses an improved chance during council tender assessments would drive everyone to do better.
“At Gusto Construction, we are working hard to make low-carbon homes commercially viable but despite recently scoring 10/10 on sustainability on a council tender application, we still missed out as sustainability was only given a 10% weighting. It should be much higher if we want to effectively encourage environmentally conscious businesses.”
Steff understands that council resourcing is also a key issue but points to similar processes employed in other large institutions: “The Evergreen Sustainable Supplier Assessment, a tool used by the NHS, is a good example of encouraging businesses to become more competitive, win more work and be paid a bit more for their services because they score more highly on the qualification criteria.” he adds.
*or similar, refers to an ESGmark or a similar certification or award that recognises a commitment to ESG or sustainability-focused initiative.