Mark Wind of the Dutch National Bank (DNB) reported on the sustainability work of the Joint European Tender (JET) group at the Intergraf Currency+Identity conference. This is a tangible banknote specific example of an approach to using procurement to drive change.
The Eurosystem sources banknotes from both in-house government printing works and private companies. While the European Central Bank (ECB) aligns national demand and bank stocks within the eurozone, the ECB’s governing council then decides on production volumes and the allocation of new banknotes. The proportion of the volume to national central banks (NCBs) is allocated based on the capital key; the ratio of capital each country has deposited to fund the ECB.
Of the 20 members of the eurozone, just six have their own printworks and print their own countries’ indents (Portugal, Spain, France, Italy, Austria and Greece). The rest procure from elsewhere and, in some cases, the volumes are low. The NCBs of several of these countries have joined together to buy banknotes through the JET, run by DNB and which includes the Netherlands, Ireland ,Finland, Estonia, Slovakia, Slovenia, Luxembourg, Cyprus and Malta.
The benefits of such an approach are that larger volumes equal lower costs, the workload is shared, knowledge preserved, and more leverage can result in priorities and ambitions being pursued, among them sustainability and innovation.
Driving innovation
JET works through a competitive process leading to a four year framework agreement being agreed with the selected accredited suppliers, who are drawn from the private printers in the Eurosystem (or at least, under the ECB’s level playing field rules, not those that produce their own country’s indent). Each year mini competitions then decide what has to be produced.
JET has used the process to drive innovation in sustainable production. One example is a focus on sustainable cotton, now adopted across the whole Eurosystem, and it is now working on SAF (Sustainable Aviation Fuel) for air freight and HVO100 fuel (HVO stands for Hydrotreated Vegetable Oil, fuels made from which offer up to 90% saving in greenhouse gas emissions compared with diesel) for the cash in transit movement of banknotes.
Another example of successful co-operation that has led to increased sustainability has been the move to printing colour changing ink using the silk screen process after intaglio printing. This is said to have increased efficiency, reduced material consumption and reduced waste.
And another has been better data gathering on energy consumption. This has provided more insight, allowed the location of points of wastage and reduced energy consumption.
JET tender
The key focus of JET in tenders when it comes to sustainability is now:
- Carbon footprint
- Renewable energy
- Waste management
- Recycling initiatives
- Sustainable materials
Within a tender there are two ways to drive sustainability beyond just choosing suppliers who have their own drive to be sustainable. First to mandate requirements – 100% sustainable cotton and a yearly meeting on sustainability are examples of mandatory requirements.
Second to offer ‘reward points’. The JET tender gives suppliers additional points for the tender evaluation if they can demonstrate their use of green energy at the print works and where their paper is sourced, more sustainable packaging materials and if they measure their CO2 footprint and can substantiate the calculation.
The JET tender is looking in future tenders at giving more reward points for a sustainable process, reducing the pressure on price. It is looking at more triggers for innovation. This is helped by the four year purchasing cycle used, which gives suppliers time to adapt their sustainability efforts.
In the meantime, the DNB demonstrates that action can be taken now to encourage and drive suppliers to produce more sustainably and deliver lower impact banknotes.
