In Japan a review of GPP policy takes place every year ©  Alexei Zavrachayev/Getty Images
In Japan a review of GPP policy takes place every year © Alexei Zavrachayev/Getty Images

The five pillars of green public procurement

8 December 2021

Green public procurement (GPP) should be seen as an opportunity to deliver “high quality public services” and build trust with the public, according to a report. 

The World Bank, which produced the report to review GPP across the globe and promote its uptake, said it required a “radical change in perspective”. 

The report said: “Asking procuring officials to consider the environmental and developmental impact of procurement choices rather than simply choose the lowest-price option is a radical change in perspective.”  

The report comes as pressure grows on businesses to embed environmental factors into procurement strategies following the Glasgow COP26 summit and greater public awareness.

The report urged procurement managers to shift priorities from securing the lowest cost suppliers, to ‘life-cycle costing’, which aims to integrate circular economy considerations into the cost of goods and services.

The report said: “Green public procurement shifts the focus of procurement from the lowest cost of acquisition to value for money, taking into account the costs incurred throughout the products’ lifetime and their environmental impact.”

The report also said while green services may have greater upfront costs, the lifetime cost to the user and the economic cost to society can be “significantly lower”.

These are the five pillars underlying GPP:

1) Business case and objectives

The report said establishing clear objectives formed the foundation for GPP. 

“The business case for green procurement will typically need to link reforms to environmental and development objectives, lay out indicators that monitor performance, and prioritise the application of GPP efforts in those areas with the most promise for success and impact,” it said.

Objectives set the direction for reforms, while indicators monitor performance.

2) Enabling frameworks 

Frameworks provide the “institutional support needed to drive procurement reforms and scale up green procurement”, which requires high-level political commitment and leadership from public procurement agencies, the report said. 

The report said: “The regulatory framework for green procurement should provide guidance on when and how to apply green procurement practises and empower government to make their application mandatory. Incentives may include price preferences during the early stages as reforms take off.”

It said effective reporting systems used e-procurement to consolidate operational data, key performance indicators, and surveys to gather information from stakeholders.

3) Operational tools

The report said putting value for money at the heart of procurement policy required green criteria to be integrated within processes. This could require “more technical and strategic decision-making than procurement focused only on identifying the lowest price bid.” 

While this may seem complex, the report said, tools have been developed to simplify the choice of buying green and reduce the administrative and technical burden on procurers.

4) Operational approaches

There are a number of approaches to green procurement public bodies can make to maximise effectiveness and ensure value for money. 

Conducting needs assessments can encourage public procurement bodies to be more effective and reduce consumption through purchasing services rather than products. Meanwhile, market consultations allow procurement teams to work with suppliers to identify the most effective solutions.

Similarly, joint procurements, framework agreements and catalogues allow purchasers to buy at scale and reduce the transaction costs of using green procurement strategies. Supplier facilitation reduces the transaction costs for suppliers, and can enable SMEs to participate in public procurement processes. 

These approaches are “relatively straightforward” according to the report, and can be implemented early in GPP reforms.

5) Managing reforms

“There is no single, linear path for the development of green procurement systems,” the report made clear. “Governments have started at different points, taken different paths, set distinct priorities, and are at various stages of implementation.”

Some government reforms have started as bottom-up as pilot initiatives and others as top-down national policies. The report said: “Successful GPP reform requires a change in organisational culture, shifting procurement from a compliance to a strategic function. Communication and change management are critical to the reform process.”

By conducting assessments throughout the reforms, public bodies can identify the strengths and weaknesses of the policy, which can then be used to set the direction for reforms and expand the scope of their application.

It said: “The ultimate goal of reforms is to mainstream GPP as part of modern procurement practice.”

☛ Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
This position can be based at our headquarters in Dover or any one of our overseas offices.
Between £50,000 - £60,000 depending on experience
Megger Group
East London
£87,586
East London Waste Authority
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE