In early November, the World Bank published the report “Green Public Procurement: An Overview of Green Reforms in Country Procurement Systems.” This publication is part of a series under the Mainstreaming Climate Change in Governance Program sponsored by the Swiss State Secretariat for Economic Affairs (SECO). It was launched globally in December 2021 and was received by an external audience of procurement practitioners as well as the World Bank staff.
Globally, governments spend approximately US$13 trillion in public contracts every year, representing approximately 12 percent of GDP. Green Public Procurement (GPP) encourages governments to consider choosing products and services that cause minimal adverse environmental impacts. It considers the environment when searching for eco-friendly products and services at competitive prices and, more broadly, encourages sustainable procurement to include human health and economic concerns.
Green public procurement is complex, and we acknowledge that the report just scratches the surface of the reform pathways that can inform the design of a strategic GPP system. We recognize that there is no one-size-fits-all solution because every client country has presented its peculiarities. Yet, we observed that procurement mechanisms could go beyond the efficiency of public spending and serve as a socio-economic tool to achieve sustainable development goals.
This report equips practitioners with a broad understanding of the challenges in the design and implementation of GPP reforms and focuses on the institutional dimensions of mainstreaming green procurement practices. It analyzes the issues practitioners need to consider when designing and implementing these reforms and contains many country cases and links to tools. Although the publication is organized around five pillars of reforms, the prioritization of each pillar will differ depending on a country’s institutional context, stage of green market development, and progress in adopting GPP.
The five pillars of GPP reform:
|Pillars of GPP Reform||Description|
|The Business Case||Lays out objectives, defines priorities, and mobilizes support|
|Enabling Framework||Helps transform GPP from a pilot activity to a policy and supports GPP implementation across the public sector|
|Operational tools||Integrates environmental considerations into procurement operations|
|Operational approaches||Manages demand, facilitates the application of GPP practices, and shifts the focus from products to performance and innovation|
|Reform pathways||Helps countries define reform pathways, building on sound diagnostics|
Our research highlighted that many governments have not implemented GPP. However, we found that a good starting point is the first pillar, building the business case, which lays out the country’s objectives and priorities in a phased implementation approach.
Champions or change agents can be key to ignite the motivation to mobilize support for the business case, to initiate GPP reform, define priorities and encourage a whole-of- government approach. Although it is not an easy task, champions drive cultural change and buy-in needed from policymakers, public procurement agencies (PPAs are encouraged to take the lead), vendors and the market.
The enabling framework provides the institutional support needed to get GPP off the ground. It also offers a regulatory framework for governments to know how and when to practice GPP and make it mandatory. Professionalization of procurement staff, building capacity and raising awareness can shift toward developing green technical skills. Incentives to vendors, such as price preferences during the early GPP stages, can encourage GPP reform.
The operational tools, including environmental criteria, ecolabelling and life-cycle costing (LCC), have been developed to simplify the choice of buying green and reduce the administrative and technical burden. Modern procurement systems have shifted from sourcing the lowest price (which can lead to low durability and inefficiency) to designing fit-for-purpose procurements that deliver value for money.
Operational approaches seek to manage demand and facilitate the application of GPP activities. The focus is on performance and innovation rather than the product. Furthermore, conducting needs assessments encourage PPAs to identify areas where consumption can be reduced, duplicate purchases removed, and services rather than goods can be boosted. The main obstacle is usually the organizational structure.
A key finding was that governments have different starting points and priorities. There are different pathways to managing reforms that can help countries to define their own, starting from the bottom-up as pilot initiatives or top-down as national policies. Additionally, GPP assessments can identify the strengths and weaknesses in procurement practices and set a baseline that can be used to guide reforms. Although GPP currently is implemented as a voluntary instrument, it can help stimulate demand for more sustainable goods and services, promote innovation in tenders and drive the development of green marketplaces.