Sustainable procurement can improve the world

2020-09-11 Milla Popova and Hannamaria Yliruusi

Have you ever wondered who decides which goods and services are available at your place of work or study and with what money they are purchased? The public sector, meaning the state, municipalities and state-owned enterprises, for example, procure services and goods with public funds for approximately EUR 35 billion annually, which is almost one fifth of Finland's gross domestic product. Indeed, the public sector has both an obligation and an opportunity to use such large purchasing power wisely by promoting sustainable, responsible and innovative procurement and by making more efficient use of public funds.

Sustainable procurement leads to a more environmentally friendly and healthier living environment

Public actors, such as municipalities, can influence the health of workers and residents and the well-being of the environment by targeting procurement. Public sector’s procurement units are socially significant actors with a lot of power and an important role in creating a greener and healthier living environment. The procurement guidelines of procurement units, or the requirements for what kinds of products and services are to be purchased, can at best guide the market and encourage companies to develop their operations in a more sustainable and responsible direction.

The opportunities for reducing the negative environmental impact of the public actor's own activities and promoting sustainable and innovative solutions are very wide. When aligning its own organisation, the customer can set various criteria for its procurement, such as low-carbon criteria, sustainable use of natural resources, chemicals used in products, and social and ethical responsibility. If the criteria are not used, companies do not then have to take such issues into account in their bids.

Procurement work is demanding and needs support

Procurement work is challenging as the procurement process itself is already demanding and contains a lot of detail to be taken into consideration. Procurement preparation often requires time and resources which are, in many cases, too limited to start with. Indeed, taking new criteria into account, such as circular economy considerations or harmful chemicals in procurement, may seem difficult and laborious.

The Act on Public Procurement and Concession Contracts obligates us to promote sustainability, responsibility and innovation in procurement. Incorporating these goals into procurement requires that those who make procurement decisions receive support and information within their organisations. Therefore, public organisations should develop strategic objectives that take into account the above-mentioned themes, clear procurement guidelines and, above all, ensure the adequacy of resources for the planning and implementation phase of the procurement process. These measures will ensure the development of procurement skills and increase understanding of which procurements should take environmental and social aspects into account and how.

Experiential knowledge is needed

Sustainable procurement is of interest to municipalities, for example, and there is a desire to develop procurement processes. Experiential knowledge on how to put sustainable, safer and innovative procurement into practice is constantly needed. Fortunately, more and more up-to-date information, tools and successful procurement examples are available.

Numerous successful sustainable procurements of various sizes have been implemented in Finland and elsewhere in the world. Support is also available from a number of different parties. For example, the KEINO Competence Center for Sustainable and Innovative public procurement supports procurement units in implementing sustainable and innovative procurement. The Competence Center is coordinated by a large number of expert organisations. With the help of guidelines, procurement tools and support services, strategic procurement guidelines and procurement instructions can be developed in a more sustainable direction.

Information and tools are also produced for procurement units through various projects. For example, Turku University of Applied Sciences is involved in the Circwaste - Circular Economy Service Centre sub-project implementing various resource efficiency support services. One entity is the Public Procurement Support Service, which promotes resource-efficient and chemical-wise public procurement. The Service Centre produces and disseminates information to those working in public procurement, among other things, through various assignments. Last year, the main theme of the assignments was harmful substances in resource-efficient procurement, and this year the focus has been on construction-related issues.

Procurement tools help with the procurement process

One example of an assignment carried out by Turku University of Applied Sciences is a study for the City of Pori. The task was to bring together and present the various tools that support existing sustainable procurement. To support sustainable procurement, several tools have been developed to think about procurement from different perspectives. For example, the life cycle costs of procurement, carbon dioxide emissions or the presence of harmful chemicals can be considered. Tool formats also vary, some are software, some are material banks, or Excel-based calculation and tendering templates. The tools help outline which option might be the most sensible overall considering both the environment and the economy. A list of found tools can be downloaded from the sources of this blog post.

For example, information on the environmental impacts and costs during the life cycle of a procurement is obtained using life cycle assessment tools (Life Cycle Assessment, LCA & Life Cycle Costing, LCC). The life cycle perspective takes into account a wide range of different issues, such as material sourcing and processing, transportation, product manufacturing, distribution, operation, maintenance, recycling and decommissioning. Guidelines and standards have been developed to support the use of these, as well as various databases. Among other things, SYKE has developed the JUHILAS tool, which includes carbon footprint calculators and instructions for five different product categories.

A procurement tool can also be a new operating model. The procurement unit can consider how those who carry out procurement work can obtain information and support as easily as possible, for example, on environmental issues. Such an approach is used, for example, in Stockholm, where an expert from the city’s chemical centre works with the procurement unit of the same office, providing quick support for procurement planning in the case of harmful chemicals.

You can find support for the concrete actions on sustainable procurement as well as a large number of different tools and operating models. The problem is often that in everyday work people do not have the time to get acquainted with these tools and operating models or their use is not supported in their own organisation. Therefore, the aim should be that every public sector organisation has a commitment to sustainable procurement at all the levels of the organisation.

Milla Popova

Environmental planner, Specialist Milla Popova and Senior Lecturer, Project Manager Hannamaria Yliruusi, Turku University of Applied Sciences

The article was published in the Maailmanparantajat blog in Turun Sanomat newspaper on 30 April 2020.

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