Challenge 2: Green Public Procurement (GPP)

How can data and technology help the public sector procure greener services and reduce the environmental impact of the supply chain?

Overview

This challenge is about the role public procurement has in delivering sustainable services. Again, there are two elements to this. The first is about giving service delivery teams and operational leadership teams the visibility to understand the environmental impact of their supply chains. The second element is about enabling public sector to strategically inform and plan the procurement and delivery of services by evaluating the sustainability outcomes of the services they want to procure and deliver.

Why this is important

Visibility of supply chains

The environmental impact in the supply chain is broader than simply focussing on low-carbon: air quality and pollution, water use and availability and pollution, waste, land use including deforestation and toxic waste, as well as energy generation and use, are all crucial factors.

There is an absence of monitoring systems giving service delivery teams and operational leadership teams the visibility to understand the environmental impact of their supply chains and the external impacts of their supply chains beyond their own operations. 

Public procurement wields enormous purchasing power: it represents an average of 12% of GDP in OECD countries and 14.5% in low-income countries, and offers a valuable opportunity to gear public expenditures towards green growth and contribute to the achievement of sustainability goals. No occasion should be missed to guide public procurement expenditures towards efficient sustainable choices in products, services and public works. The integrity and economic efficiency of procurement remain critical. 

So how can we give service delivery teams and the supporting procurement teams greater visibility of their supply chain’s environmental footprint and support green public procurement?

Informing strategic planning of procurements

Currently, public procurement – which is generally guided by the principles of fairness, transparency, openness, and non-discrimination – is evolving into a strategic instrument aimed at fostering sustainable development and contributing to market transformation. It can therefore play a critical role in promoting the inclusive and sustainable economic growth upheld by the 2030 Agenda for Sustainable Development and contribute to SDG Target 12.7: Sustainable Public Procurement. 

The problem is that there are obstacles to implementing Green Public Procurement. These include the perception in government that green products and services may be more expensive than conventional ones. Often public officials lack the technical knowledge of integrating environmental standards in the procurement process - and might also be restricted by local procurement regulations. And then there is the absence of monitoring systems to evaluate if approaches meet goals outlined. To note, this is not about changing regulations but supporting strategic commissioning.

Target customer/end user

• Public sector is a large share of a market e.g. construction, health, public transport, it can be a major driver for wider innovations and positive environmental impacts;

• But also at a national and macro level, understanding GPP is important for regulation, tax and national policy decisions;

• Tools, products and services that can be used by both the procurement teams, and the procuring service delivery teams.

References 

A Global Procurement Partnership for Sustainable Development : An International Stocktaking of Developments in Public Procurement, World Bank (2022)

Going Green - Best Practices for Public Sector Procurement. OECD (2015)

Sustainable Development Goal 12.7 Sustainable Public Procurement. UNDP (2022)

The Role of Public Procurement in Low-carbon Innovation. OECD (2016)

Global Review of Sustainable Public Procurement (OnePlanet, UNDP, 2017) 

Starting at the source: Sustainability in supply chains, McKinsey