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Sustainable Procurement Index for Health (SPIH) Clinic

UN SPHS
UN SPHS
15 Dec 2020
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Sustainable Procurement Index for Health (SPIH) Clinic

  1. GLOBAL FORUM2020 3 R D S A V I N G L I V E S S U S T A I N A B L Y: SUSTAINABLE PRODUCTION IN THE HEALTH SECTOR GLOBAL FORUM|2020 RIYADH Sustainable Procurement Index for Health Clinic Moderator: Kristian Steele Speakers: Terry Ellis, Anna Tuddenham, Callum Newman
  2. Agenda • What is the SPIH project? • Stakeholder engagement • Vision of the index • User journeys • Piloting • Q&A GLOBAL FORUM 2020 Moderator Dr Kristian Steele Anna Tuddenham Terry Ellis Speakers Callum Newman
  3. What is the SPIH project?
  4. Project summary “…to develop the Sustainable Procurement Index for Health. This is as a globally established, recognized and adaptable measurement tool for policy makers, manufacturers, suppliers, procurers, and healthcare facilities end users. This tool will provide an incentive for entities to improve their environmental and social sustainability record. No such measurement tool currently exists to monitor (I) Greenhouse gas emissions, (II) resource depletion (water, energy and material consumption), (III) chemical/toxic impact on human health and the environment, and (IV) human, labour rights and gender equality.” GLOBAL FORUM 2020
  5. Project ambition To accelerate sustainable procurement in the health sector, by • Supporting the decision making of buyers, and providing certainty to suppliers • Provide a robust and transparent method, that clearly communicates expectations for supply chain performance • Being proportionate and relevant, respecting the materiality and capability in the supply chain • Not just focus on risk, but provide clear pathways for stakeholders to improve their performance GLOBAL FORUM 2020
  6. Project plan GLOBAL FORUM 2020 Definition 2020H1 Development 2020H2 Piloting Early 2021 Testing Spring 2021 We have completed the definition phase, which determines the structure of SPIH and its key principles, and are now developing the detail and turning it in to a real product. Soon we will begin piloting it with the supply chain.
  7. Questions
  8. Stakeholder engagement
  9. Key stakeholder groups• Buyers • Suppliers • Non-government organisations • Regulatory agencies • Research bodies • Other standards bodies • Expert Panel GLOBAL FORUM 2020
  10. How we engaged • Survey issued to the Expert Group – good response rate, with some follow up interviews • Ongoing interviews with informants with particular emphasis on suppliers • Survey also launched to wider base of suppliers • Extensive literature review and best practice analysis (including from other sectors) GLOBAL FORUM 2020
  11. What we asked 1.Organisation or product 2.Same indicators for all products, or flexible? 3.Modification of requirements depending on healthcare setting 4.Should the buyer choose which aspects of the Index are applicable 5.Should the Index give a single result 6.Buying event or supplier led 7.Barriers 8.Other networks / standards that they already use GLOBAL FORUM 2020
  12. GLOBAL FORUM 2020 Buyers - findings Buyer ‘Wants’ Buyer ‘Barriers’ Organisations in the stakeholder group: Retail, Pharmacy, Hospitals, Healthcare providers Stakeholder Role: Organisations that would request the Index is used and review the information provided • To have the information available to make decisions that include the four pillars of the index (chemicals, human labour rights, resource depletion and GHG emissions) • To have mechanisms to choose suppliers based on key indicators • Flexibility in the index could help align the index with procurers’ internal sustainability priorities • Integration of third party tools into the index • Buyers that trial the index through procurement will have to absorb greater cost and time implications than those who adopt it later on • Training will be required to apply the Index result (i.e. the score) into the procurer’s existing purchasing framework
  13. GLOBAL FORUM 2020 Suppliers - findings Supplier ‘Wants’ Supplier ‘Barriers’ Organisations in the stakeholder group: Manufacturers, Distributors, Suppliers Stakeholder Description: Organisations that would be required to provide information into the Index • To be able to position products in the market and show they are satisfying the standards required • Understand what is expected of them in the future • Differentiate themselves in the marketplace • The ‘power’ will be put in the hands of the buyers to implement criteria in the index, led by purchasing • Capacity and capability to respond • Uncertainty in the future
  14. Questions
  15. Vision for the Index
  16. Where in procurement? • Based on the feedback and to achieve a viable first product, the index will focus on a use case during a specific procurement activity (a buying event), rather than being a market monitoring tool or supplier/contract performance tool • Aim to support ‘shaping the market’ by leveraging procurement events with long term potential to transition to a market based/labelling scheme type solution • Buyer led solution will send a stronger signal for now; a supplier led solution could appear voluntary GLOBAL FORUM 2020
  17. Organisation or product? • We received a range of views on this topic advocating for one, other or both to be part of the consideration • Based on our research, there are some aspects that do not fit a product-only approach well – particularly labour standards and human rights • We have adopted an approach that considers both: • Organisational emphasis for ‘baseline’ performance • Product focus for leading performance GLOBAL FORUM 2020
  18. Key theme areas GLOBAL FORUM 2020 GHGs • Governance • Measurement • Target setting • Supply chain issues Resources • Governance • Manufacturing • Supply chain issues Toxicity • Management • Restricted substances • Disclosure Social aspects • Policy and governance • Audits • Equality issues
  19. Indicator sets • We received comments supporting both flexibility and fixed indicator sets • We currently believe that some flexibility is required for proportionality, but that it should not be arbitrary. A filtering system could be used in order to support rationalisation of the indicator set to fit specific circumstances: • intrinsic factors such as product category, value of contract • extrinsic factors such as geography (e.g. using Global Slavery Index) • We are currently finalising the indicator shortlist GLOBAL FORUM 2020
  20. Levels concept explained GLOBAL FORUM 2020 • Each module has a pass threshold, based on the criteria within the module • All the modules within a level must be passed to attain the overall SPIH level • Some modules will be specific to certain product types or in specific situations • The criteria and scoring approach will be transparent, so that the supply chain understands expectations
  21. Levels concept explained GLOBAL FORUM 2020 Level 1 passed Level 2 not passed
  22. Criteria development GLOBAL FORUM 2020 Theme Question Weighting Criteria / response Score Scope Do you measure your Scope 1 & 2 GHG footprint? 50% No 0 Yes, following a recognised methodology [from list] 20 Yes, following another methodology 10 Reporting Do you report your GHG footprint? 50% No 0 The results are published internally 10 They are provided on request 10 Yes, they are published on our website 30
  23. Criteria development GLOBAL FORUM 2020 SPIH level Question Weight Criteria/response Score Recycled content of product Have you calculated the recycled content of the product? 17% No 0 Yes, each product has <49% post-consumer recycled content 15 Yes, each product has >50% post-consumer recycled content 30 Waste and circular economy Are major components of the product recyclable? 8% No 0 Yes 20 Waste and circular economy Does the manufacturer operate a take-back programme? 8% No 0 Yes 20 Energy use in manufacturing Have you calculated the % use of renewable energy in final manufacturing stage? 8% No 0 Yes, each product has <49 renewable energy used in final manufacturing stage 10 Yes, each product has >50% renewable energy used in final manufacturing stage 20 Energy use in manufacturing Are your procedures in line with ISO5001 or similar energy management approach? 8% No 0 Yes, in line with ISO5001 20 Yes, in line with another energy management approach 10 Water use in manufacturing Have you quantified water use at final manufacturing stage? 6% No 0 Yes 20
  24. Using the SPIH GLOBAL FORUM 2020 • The SPIH will be accessed through the new SPHS platform • Web-based system which will provide a central point of truth for the SPIH • Currently being developed and tested
  25. Using the SPIH GLOBAL FORUM 2020
  26. Index results GLOBAL FORUM 2020 Test organisation • The platform will provide feedback to the supplier on overall scores and module scores • Can be used to track progress over time and compare suppliers
  27. Performance banding over time • We received many comments on using the index to shape the market and it is one of the key drivers for the Index • Providing clear signals on expectations and requirements of suppliers is key • We are considering a potential model whereby the ‘baseline’ requirements or scoring systems become progressively more challenging over time. GLOBAL FORUM 2020 Example: For a given criteria, what is considered ‘Level 1’ performance in 2021 would become ‘baseline’ performance in 2023. A ‘Level 4’ requirement in 2021 would become a ‘Level 1’ requirement in 2030 etc.. This provides a clear signal to the market on the expectations of the buyer
  28. Questions
  29. User journeys
  30. Scenario 1: SHiPP country buyer with diverse supply chain GLOBAL FORUM 2020 The buyer is located in Tanzania and would like to set up an LTA for the provision of a generic pharmaceutical. The main suppliers are in India and China. The suppliers are well established. The buyer decides that sustainability should be part of the award criteria for the tender at a level of 10%. The buyer decides to place a minimum requirement of Level 1 to participate. Those that achieve Level 2, that will receive 5% of the 10% available; for those who achieve Level 3, they will receive 10% of the 10% available. 1 2 3 Scenario: Well established suppliers that meet higher Levels of the SPIH will score higher at tender stage. Four companies of the potential supply base decide to bid for the LTA. 6 5 4
  31. Scenario 2: SHiPP country buyer of PharmaceuticalsGLOBAL FORUM 2020 The buyer would like to set up LTA. As part of the market assessment, the buyer identifies that there are a range of potential suppliers of the product. Many of the suppliers are small companies, but there is a good level of competition. To participate in the procurement event, suppliers will have to use the SPIH and simply disclose their Level. The buyer decides to include in the Terms and Conditions the suppliers on the LTA will have to achieve at least Level 1 if they do not already do so by 2023 1 2 3 4 5 Scenario: Small suppliers are able to be procured through an LTA, and work with the buyer to ensure that sustainability requirements are met over time. The buyer appoints three companies to the LTA. Four companies across the potential supply base decide to bid for the LTA. One of the suppliers is located in Spain, and so does not have to complete the Module on aspects of the Social Dimensions due to the SPIH’s country filter and relevant indicators. Another supplier is located in Pakistan and therefore does need to complete that Module based on the country filter. 8 7 6
  32. Q&A in 5 mins Please send your questions in
  33. Piloting
  34. Piloting of the SPIH Who: Buyers and suppliers, from organisations of any size, geography, product category What: To help test the SPIH via a piloting phase When: January and February 2021 GLOBAL FORUM 2020 If you are interested in being involved, please contact ian.milimo@undp.org and anna.tuddenham@arup.com
  35. Piloting of the SPIH We are particularly interested in your participation if: - You are in a SHiPP country or have significant supply chain relations with SHiPP countries - Engaged in the manufacturing process or have Tier 1 suppliers that undertake manufacturing - We are interested in participation from organisations of all sizes GLOBAL FORUM 2020 If you are interested in being involved, please contact ian.milimo@undp.org and anna.tuddenham@arup.com
  36. GLOBAL FORUM2020 THANK YOU

Notes de l'éditeur

  1. Callum to deliver
  2. Kristian will deliver Is the SPIH only for UNDP/SPHS to use? How is the SPIH aligned to the UNSDGs?
  3. Anna to deliver
  4. Kristian will deliver What did the stakeholders tell you about size and capacity to adapt in line with the Index? How can policymakers benefit from the SPIH?
  5. Terry to deliver
  6. Kristian will deliver How much effort will it take to complete the SPIH? Could the SPIH be used for monitoring contracts? Who will keep the SPIH up to date?
  7. Anna to deliver SHiPP country buyer with diverse supply chain • In this scenario, the buyer is located in Zambia and would like to set up an LTA for the provision of blood bags to commence in 2021. • As part of the market assessment, the buyer identifies that there are a range of potential suppliers of the product, located both in Zambia and in other countries. • Many of the suppliers are small companies, but there is a good level of competition. • The buyer decides that in order to participate in the procurement event, suppliers will have to use the SPIH and simply disclose their Level. There will be no mandatory Level required because many of the suppliers are small. However, the buyer decides to include in the Terms and Conditions of the LTA that by 2022, the suppliers on the LTA will have to achieve at least Level 1 if they do not already do so. • One of the suppliers is located in Spain, and so does not have to complete the Module on Human and Labour rights based on the SPIHs country filter and relevant indicators. Another supplier is located in Pakistan and therefore does need to complete that Module based on the country filter. • Four companies across the potential supply base decide to bid for the LTA. o One declines to complete the SPIH, so the buyer excludes them from the process. o One of the suppliers does not quite meet Level 1 but does meet the requirements for the Human and Labour rights aspect. They agree to put together a plan to address the gaps by 2022. o Two of the suppliers achieve Level 1, one of which is based in a high-risk country for labour rights. However, they provide good evidence of a recent labour audit and the buyer is satisfied with this. • The buyer appoints three companies to the LTA, puts in place a monitoring plan for each and agrees to check-in quarterly on how they are progressing.
  8. Terry to deliver SHiPP country buyer of Pharmaceuticals • In this scenario, the buyer is located in Tanzania and would like to set up an LTA for the provision of a generic pharmaceutical, to commence in 2021 and continue until 2025. It’s one of the larger contracts that will be placed at the current time. • The main suppliers are in India and China. Some of the companies have recently presented to the buyer on their sustainability credentials compared to some of their peers. • The suppliers are well established. • The buyer decides that sustainability should be part of the award criteria for the tender at a level of 10%. • They decide to place a minimum requirement of Level 1 to participate. For those that achieve Level 2, that will receive 5% of the 10% available; for those who achieve Level 3, they will receive 10% of the 10% available. • Four companies of the potential supply base decide to bid for the LTA. o One supplier based in China provides an initial response indicating that they have achieved Level 2. However, when the buyer reviews the submission, they find that the labour audit is out of date and the supplier cannot provide more recent evidence. They therefore decide to exclude the supplier. o One of the suppliers achieves only Level 1, so is allowed to participate in the procurement event. They end up being appointed to the LTA and the buyer decides to put an improvement plan in place to being them up to Level 2, since the LTA is for four years. o The other two suppliers achieve Level 2 and are also appointed to the LTA. The buyer requests that they maintain that level and puts a monitoring plan in place for the suppliers.
  9. Kristian to deliver and remind audience
  10. Terry to deliver
  11. The piloting phase will involve the following from the supplier: The piloting company will be shared a link to the SPHS online platform where the SPIH will be hosted. The piloting company will be shared a commenting form where they can record feedback on the following themes: Access and usability of the SPIH via the platform; The content of the questions and criteria; The supporting documentation and ease of understanding; How the SPIH is scored; In some cases we will arrange a feedback meeting. As a buyer, you are an important stakeholder, and we would also ask you to: Review the SPIH and complete a questionnaire about it; Consider how you would deploy the SPIH as part of your procurement activity; Engage with the suppliers to understand any concerns and feedback.
  12. The piloting phase will involve the following from the supplier: The piloting company will be shared a link to the SPHS online platform where the SPIH will be hosted. The piloting company will be shared a commenting form where they can record feedback on the following themes: Access and usability of the SPIH via the platform; The content of the questions and criteria; The supporting documentation and ease of understanding; How the SPIH is scored; In some cases we will arrange a feedback meeting. As a buyer, you are an important stakeholder, and we would also ask you to: Review the SPIH and complete a questionnaire about it; Consider how you would deploy the SPIH as part of your procurement activity; Engage with the suppliers to understand any concerns and feedback.
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