Introduction to Sustainable Public Procurement

(Karun’s Blog – wesustainabletextileforum / TexConnect)

Sustainable procurement is the meeting of business needs for materials, goods, utilities and services in an environmentally-friendly, responsible and ethical way.

Supply chain sustainability is integral to sustainable procurement

Sustainable Public Procurement (SPP) refers to purchase of goods and services while taking economic, social and environmental concerns into consideration that there should be best value for money with no damage to environment

These are also some of the main drivers that motivate businesses to practice sustainable procurement in their supply chain management and operations.

  • Manage costs by implementing a more comprehensive approach to whole-life costing
  • Improve internal and external standards via conducting performance assessments
  • Compliance with environmental and social regulations or legislation
  • Manage business risks
  • Improve the company’s image and/or brands
  • Develop a sustainable supply chain for the future
  • Involve the local community

Figure 1. AkzoNobel’s Sustainability Framework

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Key challenges to introduce SPP

  • The lack of information available to people about the real influence of the goods on the environment. The officials don’t have information and face difficulty in preparation of relevant documents and purchasing. The absence of clear definition and lack of evaluation standards for green procurement are other hindrances to sustainable public procurement implementation.
  • The top management does not find sustainable public procurement as a legitimate or essential initiative because they do not have information about its cost and benefits
  • The employees perceive that purchasing green items takes more efforts and time than the traditional procurement, therefore, sometimes they think about extra rewards for extra efforts.
  • The reluctance of top management to give motivation & rewards to people implementing SSP 
  • The lack of training is also a key challenge in SPP implementation. The environmental training should be the first step for sustainable public procurement implementation. 
  • Shortage of staff also add hurdles while implementing SPP policy
  • The shortage of competent staffs, their negative behaviour towards sustainable procurement and lack of regular training programs are the key concerns of SPP implementation
  • The lack of budgetary support or incorrect budgeting is also great concerns for sustainable procurement.
  • The higher prices of green items in comparison to those of conventional products is a major hindrance to sustainable procurement adoption.
  • The commitment of senior management and design of the organizational processes and structures may cause the adoption or delay in green public procurement implementation. This is a big concern in the public sector companies 
  • Also, sustainable procurement is not implemented when the top management or purchase officers perceive it ineffective. It happens when green products are unavailable and finding such products is time-consuming and requires expensive procedures
  • Government legislation is the most important enabler of sustainable public procurement. The lack of clear policies, forced implementations, and no rewards from governments are key issues
  • The unawareness of the general public in a particular country is also a key concern in challenging the government to adopt SPP
  • The poor supplier practices, lack of resources and sensitive nature of their information are the main reasons that suppliers are not willing to cooperate.
  • In developing countries, the availability of sustainable goods and services is a big challenge, especially where specialized public goods are required. It is also stated that many sustainable public procurement initiatives are bounced back due to non-availability of the green products.   
  • The lack of transparent formalized measurement and metrics of sustainability across the entire supply chain

Internal and External barriers to SPP implementation

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Conceptual framework of internal and external barriers to SPP implementation. Article in Socio-Economic Planning Sciences · December 2018

Conclusion

There are several issues and challenges to developing a sustainable procurement policy. These include: (a) The need for a high degree of collaboration and engagement among members of the supply chain; (b) Lack of understanding about sustainability; (b) Lack of accountability; (c) Poor training; (d) Difficulties in synthesizing loads of sustainability information; (e) Problems with integrating sustainability criteria into purchasing decisions; and (f) Lack of support from the board.

There are also challenges in the implementation and monitoring of sustainable procurement policies. These include: (a) Failure to put into action the objectives set forth in the sustainability agenda; (b) Lack of leadership in commitment; (c) Difficulties in setting the measurement tool or KPIs; and (d) Problems in monitoring compliance.

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