What is the Sustainability Procurement Portfolio Model (SPPM)?

The Sustainability Procurement Portfolio Model (SPPM) establishes visibility on sustainability risk in organizational procurement portfolios and allows development of differentiated procurement strategies to optimize sustainability outcomes. The SPPM supports organizations in identifying procurement categories that represents the highest sustainability risk exposure and it can also assist in developing more robust Sustainable Procurement action plans in line with SDG 12.7, with the aim of accelerating sustainable public procurement implementation and better position public procurement policy makers and practitioners to strategically guide organizational and national efforts towards SDG 12.7.

For an extensive description of the SPPM concept and methodology, please consult the following working paper:

 A Sustainability-weighted Procurement Portfolio Model (PPM)

An introduction to the SPPM methodology

The SPPM is based on the design principles of Kraljic’s portfolio model and introduces segmentation thinking from Procurement Portfolio Models (PPMs) into the sustainable public procurement practice. The model applies a category-specific sustainability risk rating across a series of sustainability indicators incorporating Environmental, Social, and Governance risk indicators. The indicators are extracted from the High-Level Committee for Management Procurement Network framework, defining sustainability risks relevant for procurement activities across UN organizations

The procurement categories are defined as per the UNSPSC coding system applied by most UN organizations. The model applies ratings at the H2 category level, which is in line with Annual Spend Reporting (ASR) and analysis practises. The model currently rates approximately 130+ commonly used H2 level categories, and will continue to be updated with new rated categories

The depth of the category sustainability risk analysis is defined by the A-Z life cycle of the product or service from the stage raw material extraction, material production, manufacturing, packaging, transportation & storage, retail, consumer usage and final disposal. The environmental sustainability rating considers life cycle impacts using a hot spot approach, and the scientific knowledge developed in life cycle analysis databases is integrated into the category ratings.

The sustainable procurement risk associated with a given procurement action can be determined as the combination of the likelihood that a certain  sustainability risk may materialise, combined with the consequences or materiality of the sustainability risk event to the organization. A common risk rating matrix is applied determining the Likelihood of sustainability risk, ranging from Rare to Almost Certain, and Consequence ranging from Insignificant to Critical. The scoring ranges from 1-4, with (1) Low Risk, (2) Medium Low Risk, (3) Medium High Risk, and (4) High Risk.

By plotting relative expenditure against the ESG risks associated with each category, an organization can map the goods, services and civil risks categories that represent sustainability exposure to the specific organization in its context and operating environment. As expenditure distribution in the portfolio will differ, the model allows for a unique mapping process, which can inform prioritization of sustainability efforts within each organization.

For information about the model and how to interpret the result of the sustainability analysis, please consult the SPPM methodology page.

The Sustainability Procurement Portfolio Model

"A process whereby public sector organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimizing, and if possible, avoiding, damage to the environment."
(UNEP 2021 definition of SPP)

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Disclaimer

The SPPM methodology and the sustainability risk ratings do not represent the HLCM, UNOPS, UNGM or any of its UN Affiliates. The SPPM User expressly acknowledges and agrees that any and all use of the Site is at their sole risk, and that the provisions of the UNGM Terms and Conditions apply.

No user spend data inserted in the tool is stored on the platform and the results of the sustainability analysis are only available for the user. The sole registration of data is on the usage of the tool where the user e-mail and time are logged for statistical purposes.