Accountability and Public Finance: Fast Tracking Sustainable Public Procurement
Public procurement represents between 12 and 25% of GDP.
In Europe, for example, over 250 000 public authorities spend around 14% of GDP (around €2 trillion per year) on the purchase of services, works and supplies.
Across multiple sectors such as energy, transport, waste management, social protection and the provision of health or education services, public authorities are the principal buyers.
The public sector can use procurement to boost jobs, growth and investment, and to create an economy that is more innovative, resource and energy efficient, and socially-inclusive.
In the private sector, companies are increasingly placing more emphasis on sustainable procurement.
A global study conducted by EcoVadis revealed that 97% of 120 supply chain professionals are placing a higher level of importance on sustainable procurement than before. In addition, Fortune 500 companies who have taken the lead in sustainable procurement have experienced great returns.
European countries and the United States have put in place regulations that encourages sustainability in a company’s operations. Examples of such regulations include the Dodd-Frank Act on Conflict Minerals and the UK Environmental Liability Directive.
Institutional purchasers can move the markets by acting together
Together, B2G purchasing and B2B purchasing, represent 2/3 of the final consumption demand signal in the US economy or10.1 trillion USD.
Institutional purchasers are therefore uniquely positioned to demand transparency into the upstream and downstream impacts of goods and services.
They are capable of incorporating sustainability criteria into purchasing decisions at a scale that can shift markets.
However sustainable procurement faces a number of challenges:
– Perception that sustainable products and/or services are more expensive
– Lack of expertise on SP implementation
– Lack of policy commitments/goals/action plans
– Lack of strong political and organizational leadership on SP
– Lack of mandatory SP rules/legislation
– Lack of sustainable products and/or services to purchase
– Insufficient monitoring, evaluation and/or enforcement of SP policies
– Competing procurement priorities
This session will explore:
- How to improve sustainable public procurement globally
- Accountability and monitoring tools
Improved products classifications and standards