Procuring from regenerative enterprises

👉🏽 This story is developed as part of the Doughnut Economics for Policymakers guide.

Governments worldwide are using public procurement to support enterprises that are regenerative by design. This is done through the development of national or local preferential purchasing policies, establishment of procurement guidelines favouring specific enterprise types, and cultivation of long-term partnerships. These interventions help create more distributive and regenerative economies by shifting ownership and governance to diverse stakeholders, strengthening local economies, providing decent jobs for marginalised populations, and reducing market concentration by large corporations.

Overview 

Governments can support specific enterprise types through public procurement based on their ownership (e.g. cooperatives), governance (e.g. women- or Indigenous-led enterprises), purpose (e.g. social enterprises delivering positive social and ecological impacts), and networks (e.g. working with local communities, people with disabilities, informal workers and Indigenous peoples). Examples include:

• Develop national or local strategies to support these enterprises including preferential purchasing: Ecuador, Latvia, Malaysia, South Korea, Scotland, and Slovakia all have national strategies, laws or policies that promote social or collectively owned enterprises through preferential purchasing or reserved contracts. Malaysia also promotes registered social enterprises on government website and encourages the public to purchase from them as well. Brazil has a strategy to source school meals from local enterprises producing organic food. The city of Preston (UK), through its Community Wealth Building strategy, prioritises procurement from local social enterprises.
• Procurement guidelines or processes favouring these enterprises: Barcelona requires public housing to be constructed and managed by cooperatives; many EU countries favour enterprises working with people with disabilities or difficulties entering the workforce; Chile favours women-owned enterprises; governments in British Columbia (Canada) and New Zealand prioritise enterprises working with Indigenous Peoples; Zanzibar (Tanzania) and Pune (India) collaborate with waste-picker collectives to reduce informal work and improve working conditions.   
• Foster long-term partnerships with these enterprises: Kerala (India) awarded accredited agency status to Asia’s largest labour cooperative for construction, enabling continuous partnerships in public construction projects. Paraguay formed strategic partnerships with family farmers. 

Implementation

An increasing number of local and national governments globally are using public procurement to support regenerative enterprises. Wider national frameworks often lead to local initiatives incorporating these approaches. Cross-departmental and diverse stakeholder collaboration is central to successful implementation: for example, education, agricultural and industrial policies must work together to support organic cooperatives that can supply school meals.

Impacts

By focusing on incentivising deep design of enterprises, governments can overcome challenges related to defining and valuing social and ecological impacts in public procurement. Additionally, this fosters more distributive economies where diverse stakeholders own, govern and benefit from business, as well as more regenerative economies where business purpose extends beyond profit generation to creating positive social and ecological impacts. Such approaches also strengthen local economies and provide decent jobs for those most in need. Procuring from these enterprises also helps mitigate market concentration by large corporations.

Challenges

• Coordinating diverse stakeholders and across departmental silos in the procurement process can be challenging.
• Risk-averse compliance procedures in public procurement can be overly rigid and onerous, hindering efforts to form strategic partnerships between governments and enterprises that tackle complex societal challenges.
• Without dedicated support, some enterprises may lack the resources and expertise necessary to participate in public tenders and/or comply with onerous procedures. This can be especially acute for small businesses and those owned by Indigenous Peoples.

Reference and further reading

• The Practical case studies in the progressive public procurement toolkit by the Transnational Institute illustrate good practices for including business deep design in procurement decisions worldwide.
• The example of school meals to restructure procurement: Mariana Mazzucato (2025)
• Case studies from the British Columbia Social Procurement Initiative.
• Learning materials and tools on the Sustainable Procurement Platform.

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