Procurement
The COP26 ended a few weeks ago on a “glass-half-full /half-empty” note. While some see optimism in its outcomes pointing to a clear direction towards global climate action, others are left with a bitter taste missing concrete steps to reduce emissions and support low-income countries with mitigation measures.
Beyond responsibilities for governments to set national-level targets for emissions reductions, the call for action has mostly been directed towards corporations and the financial sector. With increasingly stringent sustainability requirements to be imposed through upcoming EU and national level regulations, firms will have no choice but to start improving the sustainability performance of their supply networks (i.e., reduce Scope 3 emissions and address social risks).
The public sector, however, can play an equally catalyzing role in accelerating sustainability performance in national and global supply chains. With public procurement representing 16% of GDP in the EU (amounting to 2 trillion Euros per year) and around 30% of GDP in many developing countries, public procurement is considered to be the sleeping giant when it comes to enabling sustainable practices in supply chains. More so, sustainable public procurement can accelerate the transition towards a circular economy and more sustainable patterns of consumption and production.
The public sector participates in a wide variety of markets (including office IT and stationery, vehicles, cleaning products, furniture, medical suppliers, building equipment, construction, energy, and textiles) and shares supply chain-related risks with the private sector. Therefore, engaging the public sector at the national and municipal level on the journey towards sustainable supply chains is just as important as creating the framework conditions for corporations to engage with their suppliers for better sustainability performance.
At Supply Impact our team can support public entities to take advantage of the multitude of benefits that sustainable public procurement can offer (from understanding the full sustainability impact related to sourcing, to reducing the environmental and social footprint of the public sector, to creating value by sourcing locally, or to increasing awareness and capacity building).
Selecting relevant product and service categories. Prioritizing products for sustainable public procurement is a highly complex process, as several factors need to be considered to identify economic, social, and environmental risks and opportunities associated with sourcing. Careful assessment of factors related to demand and supply of sustainable products and services, costs, and opportunities creating markets for such products is necessary.
Market/ supply analysis. Once the products have been prioritized, we can assist public entities by conducting market analysis to assess availability in the local market (producers, capacity, quality infrastructure services, capabilities). Our experienced team with private sector development expertise can also conduct a more in-depth assessment of capabilities in the supplier base and identify gaps that could be targeted by policy-makers with suitable policies and incentives. Strengthening the local supplier base can further contribute to improving resilience and value creation locally.
Developing sustainable procurement guidelines. At Supply Impact we can take one step further to assist public entities with specific sustainable public procurement guidelines for the entire procurement cycle based on broad stakeholder consultations.
Capacity building. Systematic capacity building is key both for buyers in the public sector as well as for suppliers. Supply Impact can support with developing targeted training and communication programs to improve awareness and enhance knowledge on how to effectively use the public procurement process for improving sustainability in supply chains.
Designing strategies for supplier engagement to maximize economic and social impact. Mainstreaming sustainability in supply chains, the ultimate mission of Supply Impact can only be achieved if suppliers are deeply and collaboratively engaged in finding cost-effective solutions to minimizing the negative environmental and social impact of their products and services. Our team’s experience in state-of-the-art approaches to industrial upgrading and supplier management programs can guide you in these efforts.
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