Procurement with Purpose Newsletter no. 61 – April 9th, 2024

Please consider taking part in the annual Sustainable Procurement Pledge / Gartner Pulse survey which will look at the state of sustainable procurement in organizations today. I think it will be particularly interesting this year given recent pushback (for the first time really) against some of the ideas within that agenda. You will be helping the SPP set its agenda anyway and you’ll get some free goodies from Gartner too. Here is the link.

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Are consumers falling out of love with EVs?

The world’s top sellers of electric vehicles (EV), Elon Musk’s Tesla and Chinese rival BYD, reported sharp falls in sales in the first financial quarter of this year, adding to “concerns over the slowing shifts towards EVs”.? There are a range of issues here, but consumers seem to be getting more rather than less hesitant about EVs, particularly where government subsidies and tax incentives have been withdrawn or reduced, as in the UK.

Anxiety about the availability of charging stations and bad publicity about firms claiming dodgy maximum range numbers have also contributed to those outcomes. Testing by?Consumer Reports?(CR), an independent, nonprofit member organization noted for its independent product studies found that of the 22 EVs they examined, “nearly half fell short of their EPA-estimated ranges when driven at highway speeds”, sometimes by more than 50 miles.

Consumer sentiment seems to be turning away from EVs in the UK at least and the industry is calling for more government subsidies. In March, pure EVs lost market share to petrol and hybrid cars. Amongst private buyers, the performance of EVs is even weaker and it is only the corporate fleet market that is sustaining EVs really because of tax incentives. So second hand values for EVs fell dramatically through 2023, although it looks like the decline may have halted in the most recent months.

This article looked at some of those biggest declines in value. A one-year old Seat Mii Electric with 10,000 miles on the clock was worth ￡18,650 at the beginning of 2023. The same spec by the end? of the year was available for ￡10,150! That is a fall of over 45%. ?

There are also issues around the availability of rare metals and minerals that are used in the manufacture of EVs, often as key components of the batteries. That has implications for a number of other “purpose-related” issues, including human rights amongst mining workers, and deforestation caused by natural landscapes being destroyed for new mines.? The greater weight and size of EVs has even caused problems for road and infrastructure designers (cars too big and heavy for multi-story car parks, for instance!) ?

There are also concerns about Chinese EVs flooding the European market, and it does not look like the UK for instance has any sort of industrial strategy for this key sector. Meanwhile, fleet buyers and others in procurement who have an interest in EVs need to keep a very close eye on what is going on here from a legislative, market and consumer preference standpoint. ?

(There is a longer version of this article on the Procurement with Purpose website here).

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Mining is killing the great apes

I believe the threat to the world’s wildlife is just as big a concern and risk for our survival, health and happiness as climate change. The Guardian recently reported on a recent paper from a group of (mainly German) experts led by lead researcher Dr Jessica Junker from the non-profit conservation organisation Re:wild. The paper was published in Science Advances.??

As we said above, a boom in mining, much of it caused by the need for materials that go into batteries and other “green” products, is leading to consequences that can be terrible for wildlife. Up to a third of Africa’s great apes are threatened by a boom in projects to extract minerals required for the renewable energy transition. “Africa is experiencing an unprecedented mining boom threatening wildlife populations and the whole ecosystem”.

Even the most ecologically sensitive areas are generally not protected, so an estimated 180,000 gorillas, bonobos and chimpanzees are at risk due to an increase in demand for critical minerals such as copper, lithium, nickel and cobalt, which is driving the destruction of rainforests. ?

Africa is home to an estimated 30% of the world’s mineral resources, and further production increases in renewable energy are expected to drive up demand.? We need to address climate change of course – but in doing so, it would be tragic and ironic if we wiped out our nearest relations in the animal world. ?So do look carefully at biodiversity and deforestation issues if you are a significant buyer of metals and minerals. Realistically, you can’t do much if your spend on these materials is small, but there are large buyers who can influence their supply chain. If you can, please persuade, threaten or incentive your suppliers (and suppliers’ suppliers) to think about these issues.

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Africa – even hotter and drier

Staying in the same continent, thanks to the Carbon Brief newsletter (well worth a free subscription) for worrying news about heat, drought and potential famine in Africa. ?Since the start of this year, Africa’s?most populous?nation Nigeria has faced prolonged stretches of severe heat.? Temperatures exceeded 40C in Africa and reached a record 44.8C in Sokoto on April 1st.

As well as the effect on humans, and the threats to jobs and livelihoods, there is likely to be an impact on agriculture with crops and livestock suffering heat stress. Agriculture is around 22% of Nigeria’s GDP and the economic effect is also serious, and we might expect supply chain disruption as well for those who buy from the country.

Meanwhile, moving south in the continent, an ongoing extreme drought in southern Africa is threatening millions of people with hunger,?Sky News?reported. According to?Reuters, Zimbabwe has declared the drought a national disaster. The drought has also reached crisis levels in neighbouring Zambia and Malawi, with both countries declaring national disasters, the?Associated Press?said. Botswana, Angola, Mozambique and Madagascar are also affected, it added.

I guess the foreign news has been so dominated by Gaza and Ukraine, other issues are being squeezed out. But whilst for many of us, climate change is a mild inconvenience – or even a positive at times and in some regions – it is threatening hugely negative impacts for billions of people globally.

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Heavenly vodka

The gig we attended last week at Heaven (at Charing Cross in London) reminded me of a good example I saw of a procurement with purpose approach in terms of supplier selection. It was one that fitted very well with corporate objectives and vision, and was likely to provide direct benefits to the organisation. ?

I think it was the first time we went to a gig at that venue, so maybe 10 years ago, I noticed a large sign behind the bar saying, “we don’t sell Russian vodka”.? The further explanation was that Russia had recently introduced more oppressive laws or regulations against gay people. So Heaven, being the venue for the G-A-Y nightclub as well as gigs, was not going to buy from Russian producers and suppliers. ?

That seemed to me a very good move. What we might call the “purpose-related” cause (standing together with the LGBT+ community) was directly related to and meaningful for a large proportion of the venue’s customer base. The vodka move was likely to have those folk nodding in agreement and feeling positive about the venue and its management, and positive customers are likely to return and spend more money!? So this wasn’t just virtue-signalling. It might have made the managers and bartenders feel good about themselves too, but for me it was in the main a hard-headed and sensible marketing approach. And that’s exactly what we like to see from “sustainable procurement” actions.

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A gig and another excellent album

In case you were wondering, last week’s SPRINTS gig at Heaven was excellent. They are going to get much bigger – a brilliant frontwoman, excellent musicians and the ability to pace a gig. This was just recorded by someone on a phone so not great quality but it gives you some idea of the general feel. Heaven is a very pleasant venue now following the last modifications - the main room gets a bit crowded but there are atmospheric side bars and seating areas for us oldies if the mosh pit gets too much (and it was packed last week)! ?

But in terms of new recommendations, this week we’ve seen the much awaited fifth Vampire Weekend album. It’s strange because I really disliked this band initially – “pretentious Ivy League fake afro-beat posh boys” as I may have said - ?but then Modern Vampires of the City in 2013 knocked me sideways. It remains one of, if not the best album of this millennium IMO.

And now Only God Was Above Us is out. It is not quite as instantly enjoyable as MVOTC at first listen but I suspect it is in that league and will repay more attention. I featured a couple of the pre-released tracks from it a few weeks ago so here is another brilliant song from the album. I suspect the lyrics are deeply meaningful too but they are beyond my powers of interpretation. (And I got tickets for their Hammersmith gig in December…)