Companies need to consider their environmental impact when sourcing materials, manufacturers need to become more sustainable and supply chains must be optimised for sustainability and resilience. Gregory Autin, a circular economy advocate, explores sustainable procurement and suggests leasing offers an ideal form of sustainable supply chain financing.
The built environment – residential and commercial real estate and infrastructure development – accounts for around 13% of the world’s GDP. Research shows the construction materials comprise 50%-60% of the total cost in construction projects.
According to the European Commission, construction accounts for about 50% of all extracted material, is responsible for over 35% of the EU’s total waste generation, and 5%-12% of total national greenhouse gases. Up to 80% of those emissions could be avoided through greater material efficiency.
The sustainability of projects depends in large measure on the materials and equipment used in construction. Sustainable procurement is key to the success of development projects and the circular economy.
In construction management, procurement is the securing of all goods, services and works needed to bring the construction project to completion in a timely and satisfying manner. The process is used to ensure the required goods, services or works are received at the best price when considering quality, quantity, time, and location.
In hotel development projects, for example, the construction hard costs, including materials and encompassing both new builds and refurbishment, account for 60%-72% of the budget. Furniture, fixtures, and equipment (FF&E) – things like hotel room furniture, bathroom fixtures, public space furniture, and soft goods like carpeting and drapes – make up 8%-13% of the hotel project's total budget, depending on the country or region.
In OECD countries, the average share of public procurement in gross domestic product (GDP) is about 12%, it reaching 16% in EU countries. It is estimated that government construction in the EU, including materials and infrastructure, accounts for 28% of total emissions for the construction sector and for 12% of government emissions.
Sustainable procurement involves a high degree of collaboration and engagement between all parties in a supply chain to source materials that minimise their negative social and environmental impact. It is typically associated with public policy although equally applicable to the private sector.
According to the European Commission, construction accounts for about 50% of all extracted material, is responsible for over 35% of the EU’s total waste generation, and 5%-12% of total national greenhouse gases. Up to 80% of those emissions could be avoided through greater material efficiency.
The sustainability of projects depends in large measure on the materials and equipment used in construction. Sustainable procurement is key to the success of development projects and the circular economy.
In construction management, procurement is the securing of all goods, services and works needed to bring the construction project to completion in a timely and satisfying manner. The process is used to ensure the required goods, services or works are received at the best price when considering quality, quantity, time, and location.
In hotel development projects, for example, the construction hard costs, including materials and encompassing both new builds and refurbishment, account for 60%-72% of the budget. Furniture, fixtures, and equipment (FF&E) – things like hotel room furniture, bathroom fixtures, public space furniture, and soft goods like carpeting and drapes – make up 8%-13% of the hotel project's total budget, depending on the country or region.
In OECD countries, the average share of public procurement in gross domestic product (GDP) is about 12%, it reaching 16% in EU countries. It is estimated that government construction in the EU, including materials and infrastructure, accounts for 28% of total emissions for the construction sector and for 12% of government emissions.
Sustainable procurement involves a high degree of collaboration and engagement between all parties in a supply chain to source materials that minimise their negative social and environmental impact. It is typically associated with public policy although equally applicable to the private sector.