Circular Economy And Other Environmentally Friendly Solutions Gaining Ground in Public Procurement

Finland spends approximately 34 million euros on public procurement a year, which amounts to about 18% of our GDP. High-quality, innovative and sustainable procurement has been made a central goal of procurement legislation. It is now possible to take strategic themes, such as environmental factors and innovative elements into account in every phase of the procurement process, from market surveys to contractual conditions.

If and when the public sector starts incorporating environmental factors into its procurements, this could have a huge guiding effect on market development.  


If the number of new instructions and guidelines are anything to go by, environmentally friendly procurements, which is the category that circular economy procurements fall under, are booming:

In addition to the above, Motiva and the public procurement advisory unit have issued many guidelines for environmentally friendly and innovative procurements. The Finnish Innovation Fund Sitra is pioneering the promotion of carbon-neutral circular economy. So, if the public sector is genuinely interested in promoting environmental sustainability, there is no shortage of help.

Plenty of Work in Procurement Strategies

In order to make strategic procurements, the purchaser has to have a procurement strategy. In 2013, the Finnish State committed to promoting sustainable environmental and energy solutions in its cleantech framework decision. Municipalities still have a lot of work to do in this area. According to a recent study by the Finnish Environment Institute, only every fourth municipality currently sets sustainability goals for procurement.  Fortunately, many large and small municipalities are currently in the process of drafting sustainable procurement strategies.

Thus, a great deal of strategy work remains in the field of sustainable procurement. A procurement strategy needs to be linked to the rest of the authority’s strategy. Public bodies need to give the parties carrying out procurements a strong mandate to take environmentally friendly solutions into account in procurements. At the moment, the situation is still that procurements are often guided mainly by urgency and the avoidance of risk—including legal risk.

Innovation Partnership Supporting Circular Economy Solutions

Finland’s recently reformed procurement legislation provides new opportunities for developing and implementing innovative elements in public procurement projects. The new Public Procurement Act includes a new process called innovation partnership. In innovation partnerships, the developer of an innovative product, service or form of contract also partners with the contracting authority in the implementation phase. At the same time, the process protects the business secrets of the participating companies and provides them with incentives to develop novel solutions. Innovation partnerships have a lot of potential in the development of circular economy solutions for the public sector.

Could Lawyers Help Already When Planning New Operating Models?

The application of complex and detailed procurement law calls for people skilled in procurement and often requires multi-disciplinary expertise. It is a good idea to bring lawyers into a major procurement project already in the planning phase instead of waiting until problems have already come up. If your aim is to promote circular economy solutions through public procurement, you have to build the entire process on a solid legal foundation.