1.6.

Sustainable Public Procurement

Sustainable public procurement refers to the process of fussing the environmental, social, and economic
variables in a way of achieving value for money to fit into the overall procurement lifecycle while
minimizing damage to the environment.

The aim of sustainable procurement is:

To minimize negative impacts of goods, works or services across their lifecycle and through the supply
chain.

To minimize the demand for non-renewable resources.

To ensure that fair contract prices and terms are applied and respected.

To promote diversity and equality throughout the supply chain.

Principles of Sustainable Public Procurement:

Application of solid supply chain management practices to achieve tenable outcomes

Focus on the ultimate impact the materials sourced may have on the environment. This may cover the
following key aspects:

Mechanism for waste management in terms of recycling and disposal

Use of eco-friendly materials iii. Preservation of biodiversity in the ecosystem to prevent the
extinction iv. Regulatory policies crafted to reduce the diverse impact on carbon foot

v. Consequences of environmental pollution: water, air, and sound

Adopting sustainable sourcing practices for the various goods and services required

Compliance with local and international environmental regulations and standards, e.g.,

ISO 14000

Compliance with local and international human rights and labor laws

Effective and efficient utilization of available resources in an economical manner

Optimal utilization of renewable sources of energy, such as solar, wind, and geothermal among others

Key steps towards achieving sustainable procurement:

Supply chain mapping: Take the initiative to map out all your key suppliers by identifying key
environmental, social and economic challenges bedeviling them and prioritize resources at your disposal
in engaging with those who have adopted and implemented tenable supply chain operations.
Clear channels of communicating expectations: Organizations should put much focus on developing a
code of conduct for their suppliers as a way of communicating required expectations by constantly
involving them in their sustainability initiatives.

Use effective tools to measure supplier performance: Corporations can easily asses their supplier
performance in terms of compliance to sustainability standards through the use of questionnaires or
interviews to collect and analyze suppliers’ data.

Institute regular training and capacity building: Corporations should focus much effort and resources on
conducting regular supply chain sustainability training on their key suppliers to build capacity in terms of
the requisite set of skills and knowledge.

Monitor and review supplier performance: Organizations can easily monitor whether the suppliers are
complaining to agreed supply chain sustainability standards through periodic onsite audit trials to make
an informed decision to continue or not.

Work closely with other peer companies in the same industry: Supply chains across the world are
marred with complex challenges that one company cannot handle alone. Therefore, the need to find
and forge close collaborative relations with peer companies that share the same supply chains and have
established sound sustainability standards so that suppliers can comply with the cross board.

Benefits of Sustainable Procurement

The benefits of adopting and implementing sustainable procurement include the following:

Sustainable procurement contributes to reduced environmental degradation, in terms of pollution and

Tenable supply of goods and services into the future

Uphold good organizational reputation which becomes a brand in strengthening sales

Foster closer collaborative relationships with key stakeholders across the supply chain

Enhance the acquisition of new business opportunities

Facilitate economical utilization of available resources to increase productivity and generate profitability
for the bottom-line

Contribute to enhanced innovation of eco-friendly goods through clean technology application

Barriers to Sustainable Public Procurement

However, there are still key challenges experienced by organizations while adopting and implementing
sustainable supply chains across the board. They include the following:

High costs involved in the adoption of sustainable supply chains, in terms of resource capacity
Lack of adequate information on sustainability and informed procedures to aid in implementation across
diverse business spaces

Lack of support by key stakeholders involved from the onset.

Lack of proper methodology to undertake Performance Monitoring and Evaluation of certain

Lack of Corporate Social Responsibility (CSR) by some corporations

Inadequate government legislation and regulations in terms of environmental laws and policies

Lack of adequate training offered by key Supply Chain professional bodies

Pillars of Sustainable Procurement

Environmental Sustainability: With more stringent measures being put up in terms of legislation and
regulations for companies to become conscious of their environment, there have been significant
environmental achievements cited among key players across the supply chains. Therefore, most
companies are at the forefront of inculcating sound environmental policies and practices in their
operations in terms of supplier selection and sourcing of eco-friendly goods.

Social Sustainability: The social aspect of Supply Chain Sustainability is concerned with ensuring that the
key players across Supply Chains engage effectively in their operations through advocating the following
practices: formulation of health and safety measures, adherence to labor rights, provision of a conducive
working environment, and inclusion of sound code of conduct guidelines.

Economic Sustainability: The economic aspect of procurement sustainability focuses on the need for
organizations to effectively and efficiently utilize their resources in a tenable manner so as to be able to
realize and maintain operational profits to the bottomline.

1.7. Review Questions

EAGEN LTD

EAGEN Ltd is a state corporation mandated to procure and distribute electricity countrywide at
affordable rates while generating income for the nation. It has been in operation for the past one
hundred years during which in recent years its sales have constantly dipped every financial year
affecting profit margins significantly.

The Board of trustee and the Chief Executive Officer has realized the importance of restructuring their
entire supply chain operations by enshrining key procurement principles and also incorporating
sustainable procurement practices. This pronouncement was reached after various stakeholder
meetings were held including views from a task force that was established by the ministry of energy.
Issues identified which were perceived to be impediments to the operations of supply chain
management functions, therefore, affecting the sales included: unreliable and costly sources of energy
from producing companies, constant power failure to customers due to theft of transformers and other
materials, lack of enough water to produce electricity due to climate change and global warming, and
environmental degradation as a result of waste disposal. This has resulted in unsatisfied customers
some opting to install solar panels as an alternative

Required

Outline key procurement principles that can guide EAGEN supply chain function

Describe the role of public procurement in promoting economy