Social-ecological considerations in procurement

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

Many local and national governments worldwide have adopted green and socially responsible procurement practices. These include the creation of clear standards, guidance and targets, updating tender evaluation methods, facilitating public input or oversight, and providing dedicated support for public servants and providers. Such approaches have created decent work, reduced ecological harm and expanded opportunities for socially and ecologically responsible enterprises.

Overview

Governments have integrated social and ecological criteria into public procurement in various ways, including:

• Creating definitions and criteria for ‘green’ or ‘socially responsible’ procurement: Governments can either create new definitions or use existing ones: for example, China, South Korea and the USA mandate or prioritise procurements based on ecolabelling; while Argentina and Bolivia require public bodies to procure Forest Steward Council-certified wood products. Some governments develop guidance with clear criteria, such as the UK's efforts to integrate economic, social and ecological considerations into procurement .
• Evaluating public tenders with considerations for ecological and social impacts: For example, the Netherlands uses the social return of investment method; Denmark employs life cycle analysis and requires local governments to calculate procurement carbon footprints; and Norway requires environmental criteria to comprise at least 30% of public procurement scoring.
• Setting clear social and ecological goals and targets: Denmark requires public sector canteens to observe two vegetarian days per week and guarantee 60% organic food; Kalmar in Sweden and Vantaa in Finland prioritise purchasing refurbished IT equipment.  
• Ensure participatory public procurement: Peru has established multi-stakeholder procurement teams for school meals, while the Dominican Republic and Mexico have both set up citizen oversight bodies to minimise corruption and increase public trust.
• Fund and develop resources and training for public servants: For example, centralised support bodies have been established in both Colombia and Denmark; Thailand has created a dedicated e-marketplace to aid public bodies in the procurement of ecological products; Denmark and France provide open-access green and social procurement templates for municipalities, Colombia has developed virtual training courses; and the EU offers tools while actively facilitating collaboration. 
• Develop resources and training for providers to better integrate ecological and social standards in their bids: for example, Costa Rica provides training videos whilst Indonesia offers support materials for small and medium enterprises.

Implementation

Both local and national governments have taken action, often combining multiple approaches. While national governments tend to provide guidance and standards for ecological criteria, local governments often lead on defining social criteria in collaboration with local stakeholders based on context. Some governments make social and ecological criteria optional, while others mandate them.

Impacts 

Integrating social and ecological considerations into public procurement has contributed to fair pay and decent working conditions, and some initiatives have helped close gender pay gaps. Moving beyond cost considerations has made smaller companies and regenerative businesses that centre social and ecological values more competitive in public tenders. It reduces ecological harm such as carbon emissions while cutting costs through energy savings. When implemented in a participatory manner with dedicated provider support, this sort of procurement can improve public spending efficiency and nurture more socially and ecologically responsible enterprises.

Challenges

• Defining social and environmental procurement criteria is complex, requiring careful balancing of the clarity of overarching criteria against adaptability for local contexts.
• Social and ecological considerations are often only optional, resulting in lower uptake.
• Civil servants sometimes lack training on green and social criteria, as well as access to guidance and the time to implement them.
• Multiple evaluation criteria can increase operational costs, and the social and ecological impacts can be difficult to calculate.

Reference and further reading 

• Insights into Social Procurement in the European Union by the Big Buyer Working Together Project.
• 71 case studies of socially responsible public procurement in the EU.
• The Social Value Model in the UK, see particularly the annex with eligible activities.
• An analysis of green public procurement of cement and steel in China.
• Good practices on sustainable procurement by One Planet Network.

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