By Almira Bowo
Every personal investment you make, whether deciding to buy one brand of canned beans over another, has an environmental impact. Which would you prefer to grab off the shelf, a $0.89 can of beans or a hypothetical $3.00 can of beans sourced sustainably from a community that hires ex-convicts and donates 10% of their proceeds to ESL (English as a Second Language) programs? This idea is what procurement is about on a personal scale. Now scale this up to corporations and governments and think of their purchases’ impact as proceeds trickle down the supply chains of their procured goods and services. Sustainable procurement practices — making environmentally and socially responsible purchasing decisions — are a powerful catalyst for corporations to achieve environmental impact goals and drive significant positive impact on their local communities.
This concept of impactful procurement is particularly relevant in today’s business landscape, where sustainability has become essential for companies seeking to maintain competitiveness and responsibility[1]. Sustainable procurement — the practice of integrating environmental, social, and economic considerations into an organization’s purchasing process in a way that prioritizes society and the environment while meeting business needs[2] — is about making environmentally sound purchasing choices and has become a key concern in the public and private sectors. Public procurement accounts for 15% of global greenhouse gas emissions, primarily from industries like defense and construction.[3] Failing to reduce these emissions could lead to increased adaptation costs for climate change events that affect agricultural practices or any other kind of natural resource. Shifting to more sustainable procurement can stimulate a greener economy, reduce the social and environmental costs of resource depletion and pollution, and create jobs opportunities.
While traditional procurement practices focus on obtaining commodities and services for the best value for the least cost, sustainable procurement extends these priorities to cover environmental and social considerations, for example, from environmentally and socially responsible producers. Sourcing in a manner that minimizes negative social and ecological impacts catalyzes positive social outcomes throughout the supply chain in the long run by lessening the strain on local ecosystems and supporting local suppliers and suppliers who value the environment. This also reduces the burden on communities most impacted by negative production externalities.
The broader impact of business on society, the environment, and the economy increases the demand for sustainable procurement. Sustainable procurement practice has also been increasingly crucial as corporations and governments aim to solve some of the world’s most pressing problems, from climate change to public health, loss of biodiversity, and social injustice. Sustainable public procurement (SPP) is particularly significant in the public sector, where government purchasing power can drive market transformation. Office supplies, vehicles, maintenance services, building works, infrastructure projects, and public utilities are government procurement activities that account for 12% on average of OECD countries’ GDP and about 30% of developing countries’ GDP. [4] As a whole public procurement — the government’s purchasing of goods and services — is responsible for approximately 15% of global greenhouse gas emissions, making it a critical lever for reducing emissions and achieving net-zero goals by 2050. In their Green Public Procurement Report, the World Economic Forum and Boston Consulting Group identify Sustainable Public Procurement (SPP) as the catalyst to jump over the transformation towards a net-zero economy through the social cost of carbon reduction.[5] An example of Green Public Procurement is South Korea, which has implemented a robust green public procurement (GPP) policy supported by legislation. The Republic of Korea’s GPP and eco-labelling policy, established under the Act on Promotion of Purchase of Green Products in 2005, is recognized globally as a best practice and requires public institutions to submit annual GPP implementation plans and performance records.[6] This policy applies to central and local governments, public corporations, and public education institutions and includes financial and reputation-driven incentives to perform well in GPP. This policy has helped the nation drive demand for eco-friendly products and innovation and investment in green technologies.[7] [8]
Oslo has developed policies by which suppliers can still win contracts if they deliver the best environmental performance regardless of their bid not being the lowest in cost.[9] This approach provides a strong market incentive for companies to invest in zero-emission technology, as in Oslo’s construction sector, where 77% of construction sites now run on zero-emission power. Copenhagen’s sustainable food procurement is another example of how procurement can drive social and environmental change. By specifying organic food in public buildings and engaging stakeholders, Copenhagen has promoted sustainable farming and reduced carbon emissions from food production.[10]
Implementing sustainable procurement requires vertical integration across organizational levels. This includes aligning procurement strategies with broader organizational goals and engaging stakeholders throughout the supply chain. Cities like Oslo and Copenhagen demonstrate how effective stakeholder engagement and political leadership can facilitate the transition to sustainable procurement practices.[11]
Increasing circularity in procurement is another critical approach to sustainable procurement. Circular procurement focuses on keeping materials and energy in use for as long as possible throughout supply chains and promoting recycling, reuse, and recovery. This approach also supports extending product lifespans and encourages the development of new, resource-efficient business models. A government or a company may achieve sustainable procurement by developing circular procurement standards, facilitating product life extension through reuse, refurbishment, remanufacturing, and recycling, and implementing supplier take-back systems and sharing platforms. Such initiatives, such as ABN AMRO’s circular procurement initiatives, such as a buy-back program for IT hardware and Rijkswaterstaat’s emphasis on green infrastructure projects in the Netherlands, demonstrate the potential of circular procurement to revolutionize supply chains and decrease environmental footprints.[12]
The combination of public and private sector demand for sustainable products and services can help scale the market for these products and services, driving down costs and encouraging sustainability throughout the value chain. One illustration of how this can occur is with the Industrial Deep Decarbonization Initiative (IDDI), which seeks to develop low-carbon industrial material markets leveraging government purchasing power, demonstrating the ability of public procurement to encourage industries that depend on government expenditures.[13]
Despite challenges such as the lack of standardized metrics for assessing sustainability impacts and the need for significant upfront investments in renewable energy technologies, sustainable procurement presents numerous opportunities. These include cost savings and increasing economic efficiency, risk mitigation, access to new markets and customers, enhanced stakeholder trust, innovation, and support for local economies. Government regulatory support can create policies encouraging sustainable procurement, and increasing consumer demand for sustainable products drives innovation. With innovation in this sector, technological advancements have the opportunity to make renewable energy technologies more cost-effective.
As governments and private organizations increasingly adopt sustainable procurement practices, they simultaneously contribute to global sustainability goals and enhance their resilience and competitiveness. By embracing sustainable procurement and integrating circularity into procurement practices, organizations can drive positive change and create a better future for future generations. The transition to green procurement practices should be viewed as an opportunity for long-term sustainable economic growth rather than a cost burden, as it can stimulate a more sustainable economy, reduce the social cost of carbon, and create new jobs.[14]
Works Cited
Adell, A. Schaefer, B. Kim, J. 2019). Green Public Procurement in the Republic of Korea: A Decade of Progress and Lessons Learned. Retrieved from https://www.oneplanetnetwork.org/sites/default/files/from-crm/green_public_procurement_in_the_republic_of_korea-_a_decade_of_progress_and_lessons_learned.pdf
Cavallari, C. Erhardt, C. Gray, M. Hoffnagle, E. Merryfield, L. (2024). Leadership in Sustainable Procurement: Lessons from Oslo and Copenhagen. Retrieved from https://gplpen.hks.harvard.edu/wp-content/uploads/2024/06/Leadership-in-Sustainable-Procurement-Lessons-from-Oslo-and-Copenhagen.pdf
Copenhagen Municipality. (2018). Green Public Procurement on the Agenda. Retrieved from https://sdgtoolkit.org/wp-content/uploads/2018/11/61000-Faktaark-KBH-K_som-indstik-UK-webfile.pdf
ICLEI – Local Governments for Sustainability. (2020). Case Studies on Sustainable and Circular Procurement. Retrieved from https://sustainable-procurement.org/case-studies/
Sapir, A. Schraepen, T. Tagliapietra, S. (2022). Green Public Procurement: A Neglected Tool in the European Green Deal Toolbox. Intereconomics, 57(3). Retrieved from https://www.intereconomics.eu/contents/year/2022/number/3/article/green-public-procurement-a-neglected-tool-in-the-european-green-deal-toolbox.html
Sievo. (2025). Sustainable Procurement 101. Retrieved from https://sievo.com/en/resources/sustainable-procurement-101
StopWaste. (2022). Sustainable Procurement Policy Template. Retrieved from https://www.stopwaste.org/sites/default/files/Sustainable%20Procurement%20Policy%20Template%20Final.pdf
Thiebault, C., & Tonda, E. (2018). Building Circularity into our Economies Through Sustainable Procurement. United Nations Environment Programme. Retrieved from https://wedocs.unep.org/bitstream/handle/20.500.11822/26599/circularity_procurement.pdf?sequence=1&isAllowed=y
United Nations Environment Programme. (2025). Sustainable Public Procurement. Retrieved from https://www.unep.org/explore-topics/resource-efficiency/what-we-do/sustainable-public-procurement
United Nations Environment Programme. (2017). Comparative Analysis of Green Public Procurement and Ecolabelling Programmes in China, Japan, Thailand and the Republic of Korea: Lessons Learned and Common Success Factors. Retrieved from https://www.oneplanetnetwork.org/sites/default/files/from-crm/comparative_analysis_gpp_180917_web.pdf
United Nations Environment Programme. (2021). Sustainable Public Procurement How to “Wake the Sleeping Giant”. Retrieved from https://wedocs.unep.org/bitstream/handle/20.500.11822/37045/SPPWSG.pdf
Varga, E. (2021). How Public Procurement Can Spur the Social Economy. Retrieved from https://ssir.org/articles/entry/how_public_procurement_can_spur_the_social_economy
World Economic Forum. (2022). Green Public Procurement. Retrieved from https://www3.weforum.org/docs/WEF_Green_Public_Procurement_2022.pdf
[1] World Economic Forum, 2022
[3] World Economic Forum, 2022
[5] World Economic Forum, 2022
[6] Green Public Procurement in the Republic of Korea
[7]Green Public Procurement in the Republic of Korea
[8] Korea’s Approach of Green Public Procurement
[9] Harvard Lessons from Oslo and Copenhagen
[10] Harvard Lessons from Oslo and Copenhagen
[11] Harvard Lessons from Oslo and Copenhagen