L3M5 SUMMARY NOTES
CHAPTER 1 SUSTAINABILITY
1 SUSTAINABILITY: DEFINITION + IMPLICATIONS
Sustainability/ Sustainable development: development that meets the needs of the present
without compromising the ability of future generations to meet their own need
Social concerns: exponential population growth rate with limited available environmental
resources
Environmental concerns: greenhouse effect, ozone layer depletion, air pollution, disposal of
toxic waste, desertification, consumption exceeding rates of replenishment, emissions from
industrial operations, freshwater shortages, species extinction
2 THE THREE PILLARS OF SUSTAINABILITY
Economic -> profit, environmental -> planet, social -> people
Economic sustainability: people + communities should have access to (financial + other)
resources required to meet their needs
Environmental: keeping Earth’s system in balance, natural resources consumed at a rate
they can be replenished, use of renewable resources
Social: upholding universal human rights + accessibility to resources
UN 17 SDGs
Triple bottom line: technique used increasingly in CSR reporting by organisations + external
stakeholders + 3rd parties to rate an orgs performance on measures of environmental, social
+ economic performance- determines businesses have positive impacts on 3 Ps: people
profit and planet
3 SOCIALLY RESPONSIBLE DECISION-MAKING
Set objectives for sus dev., set measurable targets for each objective + measure actual
performance against those targets
In a triple bottom analysis, companies should use the total cost of ownership (TCO) for the
economic aspect as well as social + environmental factors.
The best option economically might not be best from environmental or social perspective –
value conflict
4 SUSTAINABLE PROCUREMENT
Sustainable procurement: process whereby organisations meet needs for goods, services,
works, + utilities in a way that achieves VFM on a whole life basis -generating benefits not
only to org, but also to society + economy, whilst minimising damage to the environment
4 aims of sustainable procurement:
To minimise negative impacts of goods, works or services across their lifecycle + through the
supply chain
To minimise demand for non-renewable resources
To ensure fair contract prices + terms are applied + respected, meeting minimum ethical,
human rights + employment standards
To promote diversity + equality throughout supply chain. Supply chains should reflect the
diversity + demographics of societies that they operate in + provide opportunities for SMEs
Benefits: cost + waste reduction, meeting legal requirements, reduce risk of damage to
repuation, markets for new p + s
L3M5 SUMMARY NOTES
CHAPTER 2 CORPORATE SOCIAL RESPONSIBILITY
1 THE NATURE OF CORPORATE SOCIAL RESPONSIBILITY
Elements of CSR: maintain LT profitability (profit), sustain the environment (planet), operate
ethically, respect human rights + be a responsible neighbour, a good corporate citizen
(people)
CSR pyramid of responsibilities: economic (bottom), legal, ethical, discretionary (top)
Corporate citizenship: companies should act as good citizens in the communities in which
they operate
2 ETHICAL SOURCING
Aspects of ethical behaviour: freedom of choice for employees, employment relationships,
freedom of association, paying a living wage, working hours, treatment of employees by
suppliers, H + S, child labour, discrimination
Corporate code of conduct for suppliers: working conditions in the suppliers organisation,
environmental considerations, use of fairtrade suppliers where possible, no bribery
Responsible procurement: process that considers social, environmental + economic impacts
that support sus dev. + ethical procurement practice
Core principles of sustainability: human rights, compliance with laws, forced/compulsory
labour, child labour, equality + diversity, disciplinary practices, freedom of association, H+S,
bribery + corruption, environmental impacts
3 THE FAIRTRADE MOVEMENT
Unfair trading: large buyers use their bargaining power to force down prices they pay to
small businesses for their goods or produce, to levels that cause economic hardship for
producers + workers, with poor wages + working conditions and for communities they live in
Fairtrade contribution to sus dev: members advocate higher prices for small exporters in
developing countries + improved social and environmental standards e.g. Fairtrade minimum
price, secure a more stable income for food producers, set social economic + environmental
standards for companies, farmers, workers who grow food, independently check standards
have been met, promote training for farmers incl. environmentally friendly practices
4 THE IMPACT OF CSR ON STAKEHOLDERS
Primary stakeholders: employees – comply with ethical code of conduct + consistent with
CSR policies, suppliers- COC for suppliers/compliance w/ ethical sourcing practices,
customers- promote CSR to persuade customers to buy + support, shareholders- encourage
ethical investors to buy shares
Secondary: company publicise CSR policies to public through media to build image
CIPS Sustainability Index (CSI) – independently assessed for standards across 3 pillars
5 ISO 26000: SOCIAL RESPONSIBILITY
7 key principles of social responsibility: accountability, transparency, ethical behaviour,
respect for stakeholder interest, rule of law, international norms of behaviour, human rights
7 core issues of ISO 26000: organisational governance, human rights, labour practices the
environment, fair operating practices, consumer issues, community involvement + dev.
6 CSR AND DIVERSITY – social, cultural + economic (use of small suppliers) diversity
L3M5 SUMMARY NOTES
CHAPTER 3 THE IMPACT OF ENVIRONMENTAL SUSTAINABILITY
1 INTRODUCTION TO ENVIRONMENTAL SUSTAINABILITY
3 Rs of environmental sustainability: reduction, reuse and recycling
2 GLOBALISATION VERSUS GREEN LOGISTICS
Globalisation of markets, sourcing, production + supply chain (STEEPLE analysis)
Green logistics: organising + managing logistics operations to minimise damage to the
environment + promote sustainability
2 main aspects:
1) Materials management: using materials + developing products that have a lower
environmental footprint incl. sourcing of materials, product + packaging design + re-
use and recycling of waste
2) Physical transportation + distribution: choice of transportation that is most energy-
and environmentally- efficient with scheduling flows of materials + goods to achieve
greater levels of utilisation of existing transportation + warehousing assets
Example: low-emission/fuel-efficient transport, near sourcing, green sourcing, waste
management, environmentally efficient packaging, reverse logistics, social concerns
Circular economy
Conflict between globalisation + green logistics: economic pressures for globalisation +
concerns about sustainability + environment
3 PUBLIC AWARENESS + EXTERNAL PRESSURES
Public awareness of green issues:
1) obtaining raw materials from sustainable sources,
2) emissions of polluting gases + global warming,
3) recycling of materials,
4) climate change + natural disasters,
5) marine pollution,
6) lack of clean water,
7) waste + landfill
CO2, methane (CH4 25x more polluting) -agriculture + landfill sites, nitrous oxide (N20 300x)
– industrial processes + farming, refrigerant gases (several 1000x more potent)
Carbon footprint is a measure in tonnes of the amount of CO2 or CO2 equivalent (CO2e)
that a company activity or product releases into atmosphere
Pressure groups e.g. WWF and Greenpeace
National legislation + regulations
4 INTERNATIONAL LEGISLATION + AGREEMENTS
UNFCCC, Kyoto Protocol, the Paris Agreement, Global initiatives and national action on CC
e.g. UK Climate Change Act 2008
L3M5 SUMMARY NOTES
CHAPTER 4 THE ENVIRONMENTAL IMPACT OF TRANSPORTATION + STORAGE
1 INTRODUCTION
The procurement function operates within global supply chain and is closely involved with
sourcing, transportation + storage
2 AIR POLLUTION + ATMOSPHERIC EMISSIONS
Primary: emitted directly into atmosphere + has direct effect on atmosphere + human health
Secondary: chemical reactions in atmosphere between pollutants, effect on air quality
Cumulative: atmospheric pollution contributing to CC and global warming
Air pollutants ->Particle Matter (PM), Volatile organic compounds (VOCs), Nitrogen oxides,
C0, C02, SO2, Emission from HGVs - air transport is greatest pollutant
Consequences: smog in cities, acid rain, GHG + CC, extreme weather, global warming
3 CARBON FOOTPRINT CALCULATIONS
Reasons: to set targets for reducing GHG, to report on GHG
Measure using Greenhouse Gas Protocol, convert emissions from 6 ‘Kyoto Protocol’
emissions into a C02e by applying suitable multiplication factor each (CO2, CH4, N20,
HFCs, PFCs, SF6) – Scope 1 (direct emissions), Scope 2 (indirect but responsible), Scope 3
(indirect out of control)
4 NOISE POLLUTION
Impact: hearing loss, heart disease, stress + psychiatric disorder, sleep distrurbance,
learning difficulties in children
Transport biggest source of noise pollution- roadway noise
Reduce noise pollution: quieter electric vehicles, use larger vehicle also reduces costs
5 ACCIDENTS
Causes: human error, vehicle failure, weather
Stores accidents: fire/flooding, handling of hazardous liquid-leakage, mixed up
Reduce accidents: restrict drivers hours, train drivers aware of safety issues, keep vehicles
maintained, ensure hazardous materials clearly labelled, supervise deliveries + transfers of
hazardous materials, ensure staff trained and fully aware of procedures
6 VIBRATION
Damage to goods, mechanical handling of goods in a warehouse can cause damage from
vibrations on a pallet or forklift truck, environmental impact from roads + construction
equipment - packing materials are important
7 LAND-TAKE
Increase in amount of agriculture, forest and other semi-natural and natural land taken by
urban and other artificial land development – environmental + social consequences
Transportation systems responsible for extensive land-take
8 VISUAL INTRUSION
Visual effects of any man-made structures on surrounding environment- visual impact
assessment + visual performance enhancement can be now done
L3M5 SUMMARY NOTES
CHAPTER 5 GOVERNMENT AND ENVIRONMENTAL SUSTAINABILITY
1 SUSTAINABILITY AND SUSTAINABLE DEVELOPMENT – definitions in chapter 1
2 ENVIRONMENTAL IMPACT
Direct impacts: occur immediately as a direct consequence of activity/project
Indirect impacts: not caused by project itself but occur as a consequence of it
Cumulative: direct and/or indirect, small that accumulate over time + become major impact
Cumulative environmental impact: the impact on the environment which results from the
incremental impact of the action when added to other, past, present + reasonably
foreseeable future actions regardless of what agency
Government may implement laws and regulations reduce adverse environmental impacts
e.g. Environmental impact assessments (EIAs)
3 CLIMATE CHANGE AND GLOBAL WARMING
Increasing amount of GHG in atmosphere creates shield preventing heat from Earth
escaping and instead is absorbed into ocean
Mitigation: invest in low-carbon energy, encouraging/regulate development of energy-
efficient vehicles, buildings + consumer goods, reforestation, tax on high-polluting items,
laws/regulation to restrict products with adverse environmental impact, stimulate awareness
4 GREENER MODES OF TRANSPORT
Green/sustainable transport- not fuelled by petrol/diesel e.g. green vehicle, sustainable
transport systems
Transport policies of government: invest in greener public transport systems, subsidise
passenger railway systems while taxing cars in city centre, regulate traffic noise, banning
petrol and diesel-fuelled vehicles by a target year, tax incentives to purchase fuel-efficient
cars
Effect of government policy on development of greener cars + trucks – Tesla heavy-duty
truck, Hyundai hydrogen-powered commercial vehicle
5 ENERGY EFFICIENCY
Transport sector accounted for highest share of final energy consumption (34%- 91% of
which was road vehicles) followed by manufacturing industry (27%) and residential sector
(19%)
Govt policy + energy efficiency: govt promote use of energy-efficient products through
publicising or regulating in favour of them -> business have economic incentive as cheaper ti
operate
6 REDUCING EMISSION
Govt policy to reduce emissions – energy state-owned or private
Clean energy: sources of electricity generation other than coal-fired/oil-fired incl. nuclear +
natural gas vs Renewable energy: energy from any source that is fully renewable e.g. wind,
water, solar, wave
Govt initiatives: Kyoto, Paris Agreement, national initiatives, the polluter pays principle
L3M5 SUMMARY NOTES
CHAPTER 6 SUSTAINABLE PROCUREMENT + CSR
1 SUSTAINABLE PROCUREMENT
A process whereby organisations meet their needs for goods, services, works + utilities in a
way that achieves VFM on a whole life basis in terms of generating benefits not only to the
organisation but also to society + economy whilst minimising damage to the environment
Sustainable procurement is an aspect of CSR- organisations with CSR policies should be
expected to comply with + to purchase from suppliers who comply with relevant legislation in
their own country of operation
CIPs Corporate code of ethics + sustainable procurement: professionalism – procurement
strategies + decisions, ethical policies, education + training, due diligence, accountability -
accept accountability, culture, taking action, safe reporting environment
2 ADOPTION OF STANDARDS FOR SUSTAINABILITY
ISO14001: Environmental management systems – framework of practices + policies that
enable an org. to reduce its impact on environment, through continuous reviewing,
evaluating + improving its environmental performance
ISO 20400: Sustainable Procurement Standard – provide guidance on sustainable
procurement, recognises need for trade-off between environmental and social and need to
balance against economic considerations
SA 8000: 2014: Social accountability standard: elements- child + forced labour, H+S,
freedom of association, discrimantion, disciplinary practices, working hours, remuneration,
management systems
3 SUSTAINABLE PRACTICE OF COMPANIES
Consider environmental impacts in supply, service and works contracts
When company issues ITT, may require potential suppliers to provide info about
environmental + social policies + practices
Sustainable supply chain: map supply chain, reduce no. of suppliers, communicate
expectations, establish current (baseline) supplier performance develop programmes for
improving practices throughout supply chain
4 THE SOCIAL IMPACT OF PROCUREMENT – beneficiaries of polices targeted at
companys employees, employees of supplier, supplier org., potential org, communities within
which company operates
5 DELIVERING POSITIVE SOCIAL OUTCOMES – compliance with orgs. code of practice
for suppliers to benefit its employees + also practices to benefit supp;iers such as policy of
paying on time
6 VALUE FOR MONEY + SOCIAL OUTCOMES
VFM on a whole life basis- over LT and to the community not just organisation itself
E.g.- awarding contracts to small suppliers, SMEs are often innovative + flexible + in LT
maybe cheaper + more efficient, hiring local labour- being good corporate citizen
7 EXPANDING REPORTING FRAMEWORKS – reporting also envmnt + social performance
L3M5 SUMMARY NOTES
CHAPTER 7 THE TRIPLE BOTTOM LINE
1 THE TRIPLE BOTTOM LINE CONCEPT
A company should produce a TBL in order to take account of the whole life cost involved in
its business operations – TBL consists of 3 Ps
Criticisms: doesn’t provide a clear + understandable view of company’s overall business
performance, social + environmental measures differ between companies, no reliable +
consistent measure, no legal requirement to product TBL + not required to publish
2 GUIDELINES FOR SUSTAINABILITY REPORTING
Global reporting initiatives (GRI): developed a framework for TBL reporting incl. guidelines
about key metrics that might be used in reports
3 KEY METRICS FOR MEASURING + REPORTING ON SUSTAINABILITY
3 categories of reporting metrics: economic, environmental, social
4 sub-categories of social metrics: work, human rights, society, product responsibility
Reporting principles: report content- stakeholder inclusiveness, context of sustainability,
materiality, completeness, report quality- balance, comparability, accuracy + reliability, clarity
4 ECONOMIC PERFORMANCE METRICS
Direct economic value generated: revenues + operating costs, payments to employees,
donations, investments in local communities, retained earnings, payments to capital
providers (dividends), payment to government (taxes)
Market presence: specified as key social metrics included in defined social outcomes for an
organisations sustainability policies + objectives
5 ENVIRONMENTAL PERFORMANCE METRICS
Materials(% recycled), Energy (conservation+efficiency improvements) , Water (%
recycled/reused), Biodiversity (areas used with high biodiversity value), Emissions effluents
+ waste, products and services (use of plastic), transport, compliance (amount of fines)
6 SOCIAL PERFORMANCE INDICATORS: LABOUR PRACTICES
Employment, labour relations (days lost from industrial action), H + S (injury/fatalities),
training and education (av. hours), diversity, remuneration (pay women vs men)
7 SOCIAL PERFORMANCE INDICATORS: HUMAN RIGHTS
Human rights through the supply chain, discrimination, freedom of association + right to
collective bargaining, child labour + forced labour, grievances
8 SOCIAL PERFORMANCE INDICATORS: SOCIETY
Sustainability + obligations to society (employ local labour, impact on society), corruption +
compliance with the law, demographics (life expectancy, av. age of popn, economic
inequality between developed + developing)
9 SOCIAL PERFORMANCE INDICATORS: PRODUCT RESPONSIBILITY
Customer H +S (checked through product lifecycle), labelling, marketing communications
L3M5 SUMMARY NOTES
CHAPTER 8 MONITORING CSR IN PROCUREMENT + SUPPLY
1 CSR COMPLIANCE
Why to monitor: management needs to be kept informed about orgs. sustainability
performance, senior management needs to monitor awareness of employees CSRs
responsibilities, general public + govt interest in sustainability measures by companies
Methods: KPIs, audits, supplier appraisal, regulatory frameworks
2 KEY PERFORMANCE INDICATORS
Govt advised on 22 environmental KPIs but 80% have less than 5
Required characteristics: relevance, quantitative, accuracy, consistency, comparability,
transparency
3 AUDITS OF CSR COMPLIANCE
Some types of audit called assurance engagement – a practitioner expresses a conclusion
designed to enhance the degree of confidence of the intended users other than responsible
party about the outcome of evaluation or measurement of a subject matter against criteria
Corporate social audit: an assessment of a company’s performance in comparison with its
CSR objectives
Environmental audit: a management tool comprising systematic, documented, periodic +
objective evaluation of how well environmental organisation, management + equipment are
performing well with the aim of helping to safeguard the environment by facilitating
management control of practices and assessing compliance with company policies, which
would include regulatory requirements + standards applicable
4 SUPPLIER APPRAISALS
Assessment of a potential suppliers’ capability of controlling quality, delivery, quantity, price +
all other factors to be embodied in a contract
May be carried out in order to decide where to include supplier in ASL or check whether
existing supplier is conforming with orgs. contractual requirements.
Site visits should be essential when apprasing potential new supplier, social + environmental
questions in questionnaire e.g. H+S policy, do you have certified environmental
management system, do you measure total energy consumed, do you use recycled
paper/plastic, do you measure waste streams you have produced etc.
Ongoing supplier appraisal: periodic supplier sit visits, feedback on performance, formal
vendor rating
5 REGULATORY FRAMEWOKS
National laws + regulations
Voluntatry framework: AccountAbility Standard (AA 100 AP: 2018) in combination with
AA1000 Assurance Standard (AA1000 AS), GRI standards, SA8000
L3M5 SUMMARY NOTES
