Sustainable development through public procurement

A corporate responsibility survey carried out by FIBS in 2019 showed the 52% of large companies take the UN’s Sustainable Development Goals into account in their operations. Corporate responsibility has become a vital part of business continuity, and an increasing number of companies are succeeding through businesses that seek to solve sustainability problems.

One of the UN’s defined Universal Sustainable Development Goals is to promote public procurement practices that are sustainable in accordance with national policies and priorities (Goal 12.7). Sustainable public procurement is both a significant principle and a major economic phenomenon that has a role to play in saving the world. Indeed, the UN’s Sustainable Development Goals have also been described as ‘The closest thing the world has to a strategy’.

A Tool to Help Everyone Win

Procurement law can be a powerful tool in the right hands. For example, contracting entities can include corporate responsibility factors in the suitability requirements for bidders and take the emissions from the manufacturing and use of products being procurement into account when comparing bids. Employment requirements can be set for bidders, such as a requirement to arrange work trials or practical training for job seekers who have a diminished work capacity or are otherwise difficult to employ. The entire subcontracting chain can be covered by Code of Conduct requirements imposed on suppliers and they can be required to comply with human rights conventions.

Impact investing projects can also be implemented through public procurement. In this approach, the public sector only pays for results while private money supplies the financing. The impacts achieved benefit the end users and their families, the service providers, the public sector and investors. Everyone wins, be the goal the prevention of marginalisation of children and youths or the promotion of employment among immigrants. Investors receive both a reasonable profit and make an impact.

Dialogue between Public and Private Sectors is Key

So how do we go about brining contracting entities and responsibly companies together? The first step is to create a dialogue concerning what the markets can offer and what operating models and innovations the markets can be expected to develop. The next step is to make sure that procurement departments have the resources to run procurement processes in a way that makes achieving sustainability goals possible. Above all, we need strategic policies for the development of sustainable procurement and the courage to take a new approach to procurement.