Sustainable public procurement (SPP) is an up-and-coming approach for incorporating environmental factors into public procurement practices. SPP is an essential tool which is characterized by the process of the acquisition of goods, services, and works that exhibit diminished environmental impact over their lifecycle in comparison to traditional options. It functions as an essential instrument for public authorities striving to achieve environmental policy objectives, such as climate change mitigation, resource efficiency, and sustainable consumption (Pouikli, 2021). The importance of SPP is highlighted by its congruence with overarching fiscal policy frameworks and its capacity to instigate systemic transformation across multiple sectors.
The current landscape of public procurement is diverse both in number and in mass, with 2024 Organisation for Economic Co-operation and Development (OECD) reports indicating that public sector spending accounts for approximately 13% of GDP, only in OECD member countries (Mavidis & Folinas, 2022). Public procurement accounts for approximately 15 to 20% of global GDP, with procurement commitments under the World Trade Organization’s Agreement on Public Procurement (GPA) reaching approximately EUR 1.3 trillion (UNECE, 2019). This significant purchasing power allows governments to shape market dynamics and promote sustainable practices among suppliers. However, the environmental impact of traditional procurement practices remains a concern as many public authorities continue to prioritize cost over sustainability. This has led to increased scrutiny of procurement processes and a growing demand for more responsible purchasing practices that align with the UN’s Sustainable Development Goals (SDGs) (Lassen et al., 2023; Lundberg et al., 2015).
This policy brief aims to advocate for SPP as a main tool for reaching fiscal and climate targets, while also analyzing the obstacles that can limit its application and the remedies that might be sought.
The benefits of sustainable public procurement
The environmental benefits of SPP are profound, particularly in the context of reducing carbon emissions and waste. By integrating environmental criteria into procurement processes, public authorities can significantly lower their ecological footprint (Lundberg et al., 2015; Pouikli, 2021). For instance, green public procurement (GPP) practices encourage the purchase of products that are designed to minimize environmental impact, such as those made from recycled materials or those that are energy-efficient (Lundberg et al., 2015). This not only helps mitigate climate change but also promotes the principles of the circular economy, where resources are reused and recycled rather than disposed of (Ciumara & Lupu, 2020). Furthermore, SPP can enhance resource efficiency by encouraging the use of sustainable materials and technologies. For instance, in Japan, the government implemented the Green Purchasing Law, which mandates that all governmental agencies procure eco-friendly products. This initiative has led to a significant reduction in waste generation and has stimulated the market for sustainable goods. As such, public procurement of sustainable construction materials can lead to reduced waste generation and lower resource consumption in infrastructure projects (Grandia & Voncken, 2019). Similarly, South Korea introduced the Act on Promotion of Purchase of Green Products, requiring public institutions to prioritize green products in their procurement processes. By prioritizing environmentally friendly options, public authorities can play a pivotal role in driving systemic change within industries, ultimately contributing to broader environmental goals.
Sustainable Public Procurement to build on international cooperation
The issue of sustainable public procurement extends beyond national borders, as member states can support green markets as well as reduce waste and carbon emissions through their policies (Grandia & Voncken, 2019). In that fashion, the integration of sustainability criteria into public procurement processes is not a trend but rather a necessary evolution in response to the challenges posed by climate change and environmental degradation. The European Union’s Green Deal exemplifies this shift, as it aims to establish mandatory green public procurement requirements across member states (Pouikli, 2021). In terms of policy support and advocacy, the United Nations Environment Programme (UNEP) helps governments integrate SPP into their national green fiscal policies and Nationally Determined Contributions (NDCs) under the Paris Climate Agreement, but also at the subnational level depending on the particularisms of country’s own systems. One of UNEP’s pillars for action is that public spending aligns with green finance principles, helping both climate action and sustainable development (Keulemans & Walle, 2017). It is primarily accelerating the global shift to sustainable public procurement through comprehensive programs and activities: UNEP ensures that public spending becomes a catalyst for sustainability and climate action by providing policymakers, governments, and businesses with the tools and knowledge they need to implement SPP (Melissen & Reinders, 2012; Amann et al., 2014; Keulemans & Walle, 2017).
International program and financial support for sustainable public procurement
The United Nations Environment Programme is at the forefront of promoting SPP as a critical vehicle for meeting global sustainable development goals and environmental stewardship. Aiming at merging SPP into national and international policy frameworks, UNEP’s strategy consists in advocacy, capacity building, guideline development, monitoring, and support for Member States. Emphasizing SPP as a strategic tool that matches public expenditure with climate and sustainability goals, UNEP’s current projects include worldwide campaigning and information sharing. It promotes the sharing of best practices and experiences by giving stakeholders a forum for communication and cooperation, therefore strengthening governments’ capacity to carry out sensible SPP policies (Melissen & Reinders, 2012). The social benefits of SPP are equally significant, particularly in advancing equity and labor rights. By incorporating social criteria into procurement processes, public authorities can ensure that their purchasing decisions support fair labor practices and promote social responsibility among suppliers (Meehan & Bryde, 2011; Hellowell & Pollock, 2010). For instance, SPP can prioritize suppliers that adhere to ethical labor standards, thereby fostering a more equitable supply chain and supporting local economies (Oruezabala & Rico, 2012; Hellowell & Pollock, 2010). Additionally, SPP can enhance community well-being by promoting local businesses and Small and Medium Enterprises (SMEs). By designing procurement policies that favor local suppliers, public authorities can stimulate economic development within their communities, creating jobs and supporting local economies (Hellowell & Pollock, 2010; Lamprinidis, 2023). This approach strengthens community ties and ensures that public spending has a net impact on local populations.
Co-benefits of sustainable procurement
Moreover, the importance of SPP extends beyond strictly environmental and encompasses socioeconomic dimensions. The political discourse surrounding public procurement often excludes marginalized voices, such as those of indigenous communities or local stakeholders, which can further exacerbate the disconnect between policy objectives and on-the-ground realities (Cutcher et al., 2019). In practice, fields like sustainable public food procurement have been recognized as a strategic tool to reduce food waste, promote healthier diets, and support local agricultural systems (Lassen et al., 2023). Public authorities can enhance food security through a “two birds, one stone” approach: prioritizing sustainable food sources while simultaneously contributing to climate action and biodiversity conservation. In this regard, the United Nations Environment Programme and the Food and Agriculture Organization (FAO) have launched a joint initiative to support governments in integrating sustainability criteria into food procurement policies. This project focuses on stocktaking assessments, expert consultations, and policy implementation support, helping countries transition to greener and more resilient food systems.
SPP has the potential to significantly benefit the economy by promoting innovation and green markets. By prioritizing the procurement of sustainable goods and services, public authorities can encourage innovation and the development of environmentally favorable products (Lundberg et al., 2015; Ciumara & Lupu, 2020). This transition promotes the establishment of jobs in sectors that are focused on sustainability and facilitates the expansion of green industries. Investment and innovation are encouraged when governments pledge to acquire renewable energy sources or energy-efficient technologies, as this signals to the market the existence of a viable business opportunity (Pouikli, 2021).
Furthermore, SPP may lead to long-term cost savings, as evidenced by life cycle assessments. The initial purchase price is often the primary focus of traditional procurement practices, which neglect the total cost of ownership, which includes maintenance, operation, and disposal costs (Oruezabala & Rico, 2012). Public authorities can identify sustainable options that, despite their higher initial costs, generate substantial long-term savings by implementing a lifecycle approach. Consequently, taxpayers and government budgets are benefited by the reduction of utility costs and maintenance expenses that result from the investment in energy-efficient buildings (Grandia & Voncken, 2019).
Barriers to overcome
Despite the clear benefits of SPP, several barriers impede its widespread adoption. Institutional challenges, such as a lack of political will and insufficient policy frameworks, often hinder progress (Grandia & Voncken, 2019). Additionally, economic concerns regarding perceived higher upfront costs for sustainable goods can deter procurement officials from embracing SPP practices (Lundberg et al., 2015). Capacity issues, including a lack of expertise among procurement officials, further complicate the implementation of sustainable procurement policies (Grandia & Voncken, 2019).
One of the primary institutional challenges to implementing SPP is the lack of political will and commitment from government officials. Many public procurement policies are still heavily influenced by traditional practices that prioritize cost over sustainability, leading to resistance against adopting greener alternatives (Cutcher et al., 2020, Brammer & Walker, 2011). Lifecycle costs are harder for ordinary voters to rationalize and political leaders to sell than upfront costs in procurement, especially in times of stronger inflation. Furthermore, the absence of comprehensive policy frameworks that explicitly support SPP can create confusion and inconsistency in procurement practices.
Procurement officials may often lack distinct mandates or guidelines on how to incorporate sustainability criteria into their purchasing decisions, which can lead to a fragmented approach to SPP (Riscado, Stancik & Valila, 2011; Brammer & Walker, 2011). UNEP has created exhaustive guidelines and toolkits, including the UNEP Sustainable Public Procurement Implementation Guidelines, which provide sequential methods for incorporating green criteria into procurement processes. These resources are essential in assisting governments in navigating the intricacies of sustainable procurement and ensuring adherence to environmental standards (Braulio-Gonzalo & Bovea, 2020). UNEP also advocates for the development of digital platforms for e-procurement, which will improve the efficiency, transparency and accountability of procurement practices. These platforms facilitate the monitoring of compliance with sustainability criteria with the end goal of promoting good governance and ethical procurement practices (Oruezabala & Rico, 2012).
As part of its commitment to monitoring and reporting, UNEP serves as the custodian agency for Sustainable Development Goal (SDG) 12.7.1, which tracks the number of countries implementing SPP policies. By compiling data on SPP implementation, UNEP provides valuable insights into global progress and identifies areas for improvement (Ho et al., 2010). Additionally, UNEP assists governments in developing evaluation frameworks and metrics to assess the environmental, economic, and social impacts of their procurement practices, ensuring that SPP initiatives are effective and aligned with broader sustainability goals (Prier et al., 2016).
Market constraints can have adverse effects on SPP implementation, especially in developing countries. UNEP’s assistance focuses on enhancing capacity via pilot projects that promote sustainable economic growth and environmental gains (Vejaratnam et al., 2020). Limited availability of sustainable goods complicates procurement, since many suppliers cannot meet SPP requirements (Manika, 2020): as such, this leads to an increased reliance on traditional approaches, as officials may feel underprepared for new methods. Rapid changes in sustainable technologies further compound the problem, making it challenging for procurement personnel to keep up (Uyarra et al., 2020).
Enablers for sustainable public procurement
Appropriate support of SPP requires many policy tools and enablers. Four areas for these tools are regulatory measures, economic incentives, programs for increasing capacity, and monitoring and evaluation systems. As such, building a robust basis for SPP primarily rests on legislative activities. Governmental green procurement policies, notably included in national legislation ensures that public agencies give contracts for environmental considerations. Since they force procurement managers to give sustainability first priority when making purchases, such criteria can be a great driver of change. For example, the European Union has developed comprehensive green public procurement laws with environmental considerations included into public bids, therefore establishing a benchmark for member states (Bargues et al., 2019). Legal systems promoting sustainability will enable governments to create a consistent and predictable environment that supports the acceptance of SPP approaches. Including sustainability parameters into bidding processes also helps to ensure suppliers follow environmental policies. This can include specifying requirements for energy economy as well as for waste reduction, energy efficiency, and the procurement contracts’ use of sustainable materials (Oruezabala and Rico, 2012). By carefully specifying these criteria, public authorities can incentivize suppliers to provide greener alternatives, therefore supporting a competitive market for sustainable goods and services.
Capacity-building initiatives are able to equip procurement authorities with both the expertise and tools needed to effectively implement sustainable public procurement practices. Training programs can enhance the proficiency of procurement officials by integrating lifecycle costing and sustainability indicators into their decision-making processes, ensuring procurement aligns with environmental objectives (Preda & Popescu, 2019). Focusing on important issues including lifecycle costing, environmental impact assessments, and green procurement approaches, UNEP also arranges training courses and seminars for legislators and procurement officials. Public officials must be equipped with the required skills and information to make wise procurement decisions that give sustainability first priority; hence this capacity-building initiative is absolutely vital. In parallel, providing technical assistance to suppliers can enable them to meet green procurement standards and comply with sustainability guidelines, thereby expanding the market availability of eco-friendly goods and services (Keulemans & Walle, 2017). Robust monitoring and evaluation mechanisms are equally crucial, enabling the assessment of SPP initiatives’ impact and ensuring adherence to sustainability criteria. Digital platforms for procurement tracking offer transparency and accountability, allowing public authorities to measure progress toward sustainability goals (Grandia et al., 2015). Additionally, standardized reporting and evaluation frameworks can enhance the comparability of SPP practices across jurisdictions, fostering a culture of continuous improvement and knowledge-sharing (Grandia & Voncken, 2019).
Conversely, tax advantages for green suppliers can be given by governments, therefore motivating companies to follow sustainable policies and make investments in environmentally friendly technology. For example, non-harmful incentives for businesses that satisfy sustainability criteria might boost demand for environmentally friendly goods and services (Crespi & Guarascio, 2019). In turn, this is improving the conditions of the market for sustainable procurement (Bjerkan et al., 2019). Governments can reduce the supposed financial load connected with sustainable procurement by helping companies trying to embrace greener practices financially without acting at the detriment of the environment. This strategy serves to enable a more seamless transition to sustainable alternatives; therefore, it can be especially successful in industries that are usually dependent on fossil fuels or other environmentally detrimental activities (Bargues et al., 2019). Compared to larger organizations, SMEs are frequently nimbler in implementing sustainable practices. Nevertheless, especially in relation to SPP, they can equally encounter major obstacles while being in the ring for the attribution of public contracts. Among these obstacles could be strict compliance rules, lack of resources, and restricted knowledge of procurement operations (Sourani & Sohail, 2013). Governments should create focused policies helping SMEs negotiate the procurement terrain in order to meet these obstacles. By helping to level the playing field, such cross-sectorial programs enable smaller businesses to more successfully challenge bigger companies (Allal‐Chérif, 2012): furthermore, giving tools and training to enable all actors to meet sustainability requirements will improve their capacity to engage in public procurement operations. Governments should encourage local economies and innovation in sustainable practices by means of an inclusive procurement environment (Ferreira & Silva, 2022).
Transition to and impact of sustainable public procurement
The transition to sustainable purchasing practices may disproportionately impact certain demographics, particularly those reliant on traditional industries that could be supplanted by environmentally friendly alternatives. Retraining and reskilling programs aimed at equipping affected workers with the necessary skills for employment in emerging green sectors represent one solution: new activities can facilitate the transition to a hands-on approach of sustainability, ensuring that individuals are not marginalized throughout economic transformations (Costa & Motta, 2019). Furthermore, engaging local populations in the decision-making process helps identify specific needs and challenges, thereby fostering accountability and collaboration in the transition to sustainable practices (Lenderink et al., 2022). Public procurement regulations may prioritize social characteristics that promote equity and inclusion. Procurement procedures may incorporate criteria requiring suppliers to demonstrate their commitment to equitable labor practices, diversity, and community engagement (Melissen & Reinders, 2012). Governments can ensure equitable distribution of sustainable procurement benefits by holding vendors accountable for their social impact (Caldera et al., 2022). This is where sustainable public procurement, by virtue of its inner procedures that take labor rights and assist local businesses, especially in relation to small and medium businesses (Oruezabala & Rico, 2012; Kaye Nijaki & Worrel, 2012).
The international community has the momentum to build a concrete platform for sustainable procurement practices and encourages other countries to adopt similar initiatives. Furthermore, UNEP actively collaborates with key stakeholders to harmonize SPP practices globally. These partnerships are crucial for fostering a collaborative environment where knowledge and resources can be shared effectively (Grandia & Voncken, 2019). International organizations, governments, the private sector and the not-for-profit actors are then able to increase the reflections on the availability of sustainable goods and services, ensuring that markets align with public sector demand for environmentally friendly products. Additionally, the fiscal stance of governments can influence public expenditure patterns, making it challenging to allocate funds for sustainable initiatives (Lamprinidis, 2023). In times of economic uncertainty or austerity, public authorities may be reluctant to invest in sustainable procurement practices, viewing them as non-essential expenditures (Lienert, 2013).
Author;
Pierre-Jeanne Clausse, United Nations Environment Programme
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