Opinion Firuzan Speroni from KPMG discusses how green procurement needs to be an essential part of asset management Firuzan Speroni With increasing market interest in environmental, social and governance (ESG) principles, sustainable asset management which demands the inclusion of ESG principles in assetrelated decision-making presents an opportunity for growth. Some estimates place the market into the trillions of dollars. Embodied carbon is the amount of greenhouse gases emitted during the manufacturing, transportation, installation, maintenance, and disposal of building materials. It can make up as much as 50 per cent of buildings lifetime emissions. As asset operations become more efficient during a buildings lifetime, the embodied carbon portion becomes a bigger contributor to the assets overall carbon footprint. This huge opportunity to reduce the embodied carbon impact is routinely overlooked in current sustainability efforts. A primary process that contributes to a buildings total embodied carbon is material procurement. Traditional procurement focuses on aspects such as cost, quality and availability. Green procurement bases the selection of materials on weighted life-cycle impact on the environment and other environmental health and safety factors. Incorporating green procurement, along with other ESG practices, allows for asset management to be both profitable and impactful. Benefits of green procurement Historically, the asset management industry has focused on addressing operational carbon emissions (from heating, air conditioning, or operating the facility) and ignored the embodied carbon. There is a significant amount of embodied carbon related to system upgrades installed during an assets life. By prioritising green procurement, total carbon footprint can be reduced. Green procurement has many other additional benefits. 1. Increased supply chain independence A conscious decision to invest in durable and circular materials reduces the risk of supply chain disruptions. A more sustainable supply chain means a more robust local network of suppliers A conscious decision to invest in durable and circular materials reduces the risk of supply chain disruptions. A more sustainable supply chain means a more robust local network of suppliers. The infusion of more durable components minimises the frequency of replacement and increases likelihood of reuse. 2. Enhanced material resiliency Project costs can be lowered by decreasing the frequency of replacement and maintenance. It also means that project stakeholders can extend the life of their products, reducing waste and helping to protect the environment. Overall, this lowers the cost of assets throughout their entire life-cycle, including during operations. 3. Cost savings and increased returns Green procurement can also provide significant cost benefits. By choosing to purchase sustainable products, project stakeholders can reduce their costs by reducing the need for expensive repairs and replacements. Additionally, many green products are designed to be more energy efficient, which can help to lower energy costs over the long term. These lower operational costs benefit the overall returns. 4. Human health and wellbeing Green procurement policies can have significant benefits for human health. By choosing to purchase products that are environmentally friendly, project stakeholders can reduce the exposure of their employees and customers to hazardous materials and chemicals. This can help to improve air and water quality, and promote a healthy and safe working environment. Key steps in sustainable asset management Implementing green procurement can be achieved in many ways during operations, ranging from materials included in building-wide upgrades to the products used to clean surfaces. When a client needs support implementing green procurement, our approach is simple: 1.Identify material and supply chain-related ESG and net zero goals and standards 2.Identify applicable standards and verifications that support established goals 3.Collect list of impacted materials and aggregate supplier/ vendor information 4.Screen materials and vendors against applicable client requirements, trusted industry standards and verifications 5.Identify replacement strategies for vendors and materials that fail to meet applicable requirements, standards or verifications 6.Support clients during the replacement process and to understand benefits such as carbon footprint reductions, supplier/vendor process initiatives, or reduced potable water impacts. Firuzan Speroni, PhD, is a Director in KPMGs Infrastructure, Capital Projects and Climate Advisory practice. She has extensive knowledge and experience in project management, construction management, construction procurement management, construction technology and business intelligence Following these steps will result in a procurement procedure that clearly specifies and vets which materials and products can be used within the facility. It can simultaneously eliminate the potential use of harmful substances within the facility and provide an opportunity for increased savings. Practising green procurement will assist in overall decarbonisation efforts, making assets more sustainable. Hence it is recommended as a critical step to incorporate into your asset management functions. By pursuing green procurement in operations, project stakeholders demonstrate their commitment to the environment, but also position themselves for long-term success.