DIT Canada: Moving from Cost to Value and Net Zero

In November 2021, the UK will host the COP26 UN Climate Change Conference and is committed to build back better – championing a greener, more prosperous, resilient and fair recovery. As a cross-government priority and approach, the UK is interested to work and partner with overseas markets to align, support and tackle these global challenges and meet net zero ambitions. As part of the Department for International Trade (DIT) and the UK’s global diplomatic network, opportunities such as this, are welcomed to convene industry forums to engage, share insight, identify and deliver solutions.   

Along with other countries, Canada and the UK have committed to reaching net zero emissions by 2050, and both have made infrastructure investment a key focus of economic recovery. In June 2019 the UK became the first major economy in the world to pass laws to end its contribution to global warming by 2050[1]. This target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels. Net zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage.

Environmental performance and economic value go hand-in-hand when assessed over the lifetime of infrastructure. When projects are planned and procured it is often only the upfront costs for design and construction that are considered. More innovative designs and building materials may cost more initially but can reduce lifecycle costs and substantially reduce greenhouse gas emissions over the years a piece of infrastructure is in use. By capturing that lifetime value, it becomes easier to fairly compare proposals and deliver long-term cost savings and environmental benefits.

On Tuesday 16 February 2021, DIT Canada invited us to speak at their virtual roundtable ‘Moving from Cost to Value and Net Zero’, along with other public and private sector leaders from Canada and the UK. Together we explored experiences, challenges, and best practices in Canada and the UK, drawing on insight from examples of how infrastructure investment and planning can incorporate sustainable methods, and deliver better environmental and economic outcomes on the journey to net zero.

Representing Commerce Decisions at the roundtable was Mike Ross, Principal Consultant – International Services Lead. Mike focused on the tender evaluation process and shared the new approaches being adopted in the UK, specifically in relation to value for money and the inclusion of social value. He also provided insight on the creation of a more three-dimensional approach to tender evaluation, which brings both opportunity and complexity.

Mike explained that the environmental and social value aspects of a procurement are shifting from an aspirational ‘consideration’ to a mandatory place at the table, in terms of tender down-selection. This has become a necessity in order to achieve the goals of the Net Zero initiative and will also look to address the impacts of the Covid-19 pandemic on both industry and local communities. Mike used Canada Defence from our customer portfolio, as an example of a three-dimensional evaluation where specific industrial value to Canada is sought and factored into the down-selection. This was related to the ‘lifetime’ view for infrastructure projects, which aims to reduce emissions and environmental impacts, in line with the Net Zero initiative.

Mike was joined by other from both government agencies and business, including the Royal Institution of Chartered Surveyors (RICS),  Infrastructure Canada, Scottish GovernmentInfrastructure Ontario, Canada Infrastructure Bank, Alberta Infrastructure, Turner & Townsend, and more, but all sharing their role, focus and activity, when it comes to the lifecycle and lifetime of infrastructure developments.

As tender evaluation experts, we welcomed the opportunity to take part in this roundtable discussion and with the UK’s 2050 net zero target being one of the most ambitious in the world[1], we look forward to continuing to being involved in future industry panel sessions of this type.

For more information about how we support you to embed social value and measure the wider socio-economic impacts at every stage of your procurement process, as well as delivering value for money, please get in touch.

[1] https://www.gov.uk/government/news/uk-becomes-first-major-economy-to-pass-net-zero-emissions-law