Overview Of Green Procurement Construction Essay

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In recent decades developed nations have become increasingly aware of the challenges associated with their fast escalating consumption of finite resources.

To be more sustainable, organisations are recognising that they need to become more efficient with their utilisation of environmental, social and economic resources. Despite this, green procurement still largely remains a niche sector. The total volume of products which enter the supply chain possessing substantial environmental benefits is still quite small, but there are signs of growth in this area.

2.0 Definitions of Green Procurement

 "Green" refers to practices, processes and products that have minimal impact on the health of the ecosystem. The emphasis is on non-hazardous, recyclable, reusable and energy efficient products and processes. And Public procurement Act 2006 (Mauritius) defines Procurement as the acquisition by a public body by any "contractual means of goods, works, consultant services or other services". Therefore it is clear that "Green Public Procurement refers to the acquisition by a public body by any "contractual means of goods, works, consultant services or other services" that have minimal impact on the health of the ecosystem.

Green Public Procurement is also about setting an example and influencing the marketplace. By promoting green public procurement, public authorities can provide industry with real incentives for developing green technologies. In some product, works and service sectors, the impact can be particularly significant, as public purchasers command a large share of the market (in computers, energy-efficient buildings, public transport, and so on). Green public procurement covers areas such as the purchase of energy-efficient computers and buildings, office equipment made of environmentally sustainable timber, recyclable paper, electric cars, environment-friendly public transport, organic food in canteens, electricity stemming from renewable energy sources, and air conditioning systems complying with state of the art environmental solutions ( European Comm- unities, 2004).

Green Procurement is the abbreviated term for environmentally preferable procurement     (UNEP 2008). It refers to the environmental impacts in the procurement of goods and services.               It is not limited to the purchase of green product alone, but deals more broadly with the full range of procurement alternatives.         For example, the procurement of a more fuel-efficient vehicle in preference to a less fuel-efficient one can be considered a greener procurement, without the smaller vehicle necessarily being green product. Green procurement is also about process improvements; consolidating multiple user orders with a given supplier into a single order. This will result in a single delivery, thus reducing shipping costs and carbon emissions.Finally, green procurement is a subset of the wider concept of sustainable procurement, which generally refers to the impact of product and services from an environmental, social and economic perspective. These terms are frequently used interchangeably but it is important to recognise the distinction.

An analysis of green public procurement in Mauritius

2.1 Green Procurement and Sustainable Procurement

In contrast to green procurement, which focuses on environmental impacts, sustainable procurement considers the triple bottom line (social, environmental, and economic) implications of procurement. Procurement can encompass two areas:

1. The transactional component or the purchase itself.

2. Other considerations such as those noted by the United Nations Environment Programme (UNEP) 'timeliness, effectiveness, efficiency, competition, transparency, equitable distribution and development'.

2.2 Reduction and Substitution

The practice of green purchasing has two broad objectives as noted by Good Environmental Choice Australia Ltd:

1. To reduce the amount consumed by an organisation ('reduction')

2. To purchase products which are less damaging to the environment ('substitution')

In assessing the least damaging purchasing option, consideration should also be given to the full lifecycle impact. This is highlighted in the Commission of the European Communities 'Buying Green' handbook which notes that 'adopting a "life cycle costing" approach reveals the true costs of a contract'. There is a range of International Organization for Standardization (ISO) documents which provide guidance on lifecycle assessment. In particular, ISO14040 and ISO14044 provide the Principles and Framework, and Requirements and Guidelines, respectively (International Organisation for Standardisation 2006).

2.3 The Benefits of Green Procurement

The benefits of green procurement are numerous and these include reducing energy and water consumption on one side and on the other reducing waste and hence these will lead to improvement in efficient use of resources and overall cost reduction. Financial savings are a powerful draw. A study on green public procurement in the EU found that a decrease in overall procurement costs can occur when using the life cycle costing approach. The financial imperative is also reflected in the World Business Council for Sustainable Development's (WBCSD) definition for eco-efficiency, an important component of which is the objective of

An analysis of green public procurement in Mauritius

 increasing the value of goods or services with a reduced environmental impact( Significant and Ecofys PricewaterhouseCoopers  2009). Eco-efficiency can lower costs by engaging in actions such as minimizing packaging or reducing waste (World Business Council for Sustainable Development 2008).

Green procurement encourages industry to adopt cleaner technologies and produce products with lower environmental impacts' (Australia Government, Development of Environment, Water, Heritage and the Arts 2003).

These opportunities are often considered important driving factors behind the growth of green procurement. In addition there are general benefits in terms of reputation and staff engagement.

2.4 Consumer Approach to Green Procurement

Consumer action can be a catalyst for wider action. The most important role that individuals play is not simply reducing their own environmental impacts but building support for leadership from government and business.

Recent consumer research suggests that there is an established and growing number of consumers looking for more sustainable products and services Mobium Group (2008) and Net Balance Foundation and Accountability (2008).1 Although this report does not directly focus on consumer purchasing, it is an important part of the supply chain and has a strong influence on organisational decisions.

The Living LOHAS (Mobium Group 2008) study segments markets according to their attitude and commitment to living a lifestyle of health and sustainability. The study identified four relatively distinct groups of consumers: Leaders, Leaning, Learners and Laggards. Furthermore, it was found that 'the consumer market for natural, healthy and sustainable products and services in Australia has grown over 25% to $15 billion in 2008 and is expected to reach at least $22 billion by 2010'. The study did look at a far wider product range than just those that fall into a definition of green purchasing and included organic food, vitamins, yoga, meditation, personal development, eco-tourism, and socially responsible investing.

An analysis of green public procurement in Mauritius

The What Assures Consumers study conducted in 2008 by Net Balance Foundation (in conjunction with Accountability and Lloyds Register Quality Assurance),  identified that in order to harness the enthusiasm of green purchasers and expand the market, clearer direction must be provided to consumers and significant barriers to consumer behaviour change must be overcome. These include more leadership from government, better labelling and assurance of product claims and financial obstacles.

2.5 The Organisational Approach to Green Procurement

The organisational approach to green purchasing has multiple dimensions. These extend beyond personal choice and the individual ramifications associated with consumer purchases.

Organisational approaches to green procurement range from strategic, organisation-wide commitments, to small-scale single purchases. The range of approaches includes strategic commitments such as green procurement policies, targets and public reporting of progress, supplier strategies and strategic supply chain management, green contracts and tenders and others such as strategic assessment of procurement and priority spend areas highlighted and green procurement action teams and action plans

Many organisations have green purchasing initiatives in place but fewer have undertaken strategic assessments of their green procurement practices or have action plans in place. Those organisations that are most advanced have made progress towards embedding green procurement into general procurement practices.

The Australian Competition and Consumer Commission (ACCC 2008) publication, Green Marketing and the Trade Practices Act shows that there has been uncertainty around organisations' approaches to promoting credible green information. This adds more confusion to the green purchasing arena which currently lacks a single definitive set of guidelines.



An analysis of green public procurement in Mauritius

2.6 Green Procurement Internationally

There are a range of green procurement practices and initiatives around the world. Countries (or regions) associated with green procurement best practice that was noted during the stakeholder interviews include the UK, Canada, Scandinavia, Korea, Germany and Japan.

There are many excellent green procurement programs and collaborative initiatives occurring across a broad range of countries, although not all are widely known. Some of these include:

1. The UNEP Marrakech Process was set up to deal with the issue of sustainable production and consumption. It aims to develop a '10-Year Framework of Programs on Sustainable Consumption and Production' (Marrakech Process Secretariat: UNDESA and UNEP 2009). Through the Marrakech Process, seven task forces have been established, including Sustainable Public Procurement, and Sustainable Products. The Marrakech Task Forces are voluntary initiatives led by governments which, in cooperation with other local partners, commit themselves to carrying out activities at a national or regional level that promote a shift to sustainable consumption and production patterns.

2. The European Commission has set up a Green Public Procurement website. This provides access to guidelines, a training toolkit and a range of other resources. In addition, the site includes links to a range of European national resources such as Austria green criteria (known as Check It!), Belgium's Guide for Sustainable Procurement and Switzerland's Green Public Purchasing website EUROPA (European commission) (2009).

3. The International Green Purchasing Network is an organisation which promotes green purchasing internationally by coordinating those who take the initiative in green purchasing towards sustainable production and consumption. The network consists of international organisations, local authorities and NGOs.

4. The Mayor of London's Green Procurement Code is a free resource that assists organisations to incorporate environmental considerations into their purchasing practice. Organisations that sign up must commit to achieving targets (Mayor of London 2009).

An analysis of green public procurement in Mauritius

5. The UK Government established the Sustainable Procurement Task Force in 2005 in order to achieve the sustainable procurement goals set out in their Sustainable Development Strategy. The taskforce delivered a national action plan which had six key recommendations. These were 'Lead by Example', 'Set Clear Priorities', 'Raise the Bar', 'Build Capacity', 'Remove Barriers' and 'Capture Opportunities' UK Department for Environment Food and Rural Affairs (2009).

6. The Commission for Environmental Cooperation created by Canada, Mexico and the United States has set up the North American Green Purchasing Initiative (CEC NAGPI). The CEC NAGPI has undertaken research into green procurement, outlines the business case for green purchasing and has produced a number of 'buyers guides' (Commission for Environmental Cooperation)

7. The Canadian Government has the Office of Greening Government Operations. They have established a policy for green procurement, guidelines and training (Public Works and Government Services Canada 2009).

2.7 Empirical Review

Over the past years various studies have been carried out into 'green public procurement'. Below the most recent studies are discussed, first by focusing attention on some international studies, followed by a brief examination of some Dutch studies.

Few studies have been conducted on the concept of green procurement. In 1993, Business in the Environment (BiE) conducted a project to produce guidelines for purchasers in all industry sectors and government bodies on integrating environmental policy with procurement. Through market research and workshops the following key findings were made:

1. Integration of procurement with environmental issues was not well developed;

2. Customers often asked for environmental performance information from suppliers but did not often validate it;

3. The majority of customers and suppliers felt that relationships had improved through addressing environmental issues;

An analysis of green public procurement in Mauritius

4. There was a general agreement that environmental management will become more important in the future;

5. Most customers and suppliers said that guidance was needed on developing environmental procurement.

2.7.1 Later, in 1996, the International Council for Local Environmental Initiatives (ICLEI) investigated tendering practices with particular reference to green procurement. However, the very low rate of return (6.5%) in this survey limited the validity of conclusions that could be drawn.

2.7.2 Van der Grijp (1998) based in two case studies, in Spain and the Netherlands, identified six barriers to green procurement. The barriers are sequential and relate to different stages of the purchasing process: awareness and motivation; economic pressures; assessment of environmetal performance; legal constraints; organizational structure; and technical constraints. This study also identified three elements that are essential for the successful implementation of a green procurement policy: an environmental programme; the integration of management in the organi- sation; and the appointment of an environmental coordinator.

2.7.3 Warner and Ryall (2001) conducted a study of the current use of green procurement policies and practices. A questionnaire was send to 410 organisations throughout England and Wales.

The total of180 questionnaires were returned (rate of return of 44%). The main findings from that survey are:

1. There is a growing interest in greener procurement policies, demonstrated by the high rate of return of the survey;

2. Environmental considerations are only integrated into procurement decisions at a low level;

3. Greener product alternatives are not always economically viable or suitable;

An analysis of green public procurement in Mauritius

4. The most popular method used by these organisations to inform purchasers of green procurement policies is the publication of green procurement guides.

5. Mixed and devolved purchasing structures are most prevalent for the procurement of products and services. These structures can hinder the implementation of green purchasing but this can be overcome by recognizing barriers and using an effective method of implementation.

6. Overall environmental considerations exert a low influence over the choice of both products and service contracts.

7. Popular criteria used for assessing green products are assurance provided by manufacturers and the presence of eco-labels.

8. Cost has been identified as the main constraint to implement green purchasing.9. The survey found that the majority of green purchasing policies have been rated as moderately successful with respect to the original objectives.

2.7 .4 In August 2006, a group of 5 environmental organizations namely, Virage, the Netherlands, Centre for Environmental Studies, Hungary, Global to Local, United Kingdom, Macroscopio, Italy and SYKE, Finnish Environmental published the 'Green Procurement in Europe 2006' report. This report outlines the state of green procurement in 25 European Union member states.

Two measurements were performed for this study: based on the response to questionnaires and by analysing the use of environmental criteria in actual tender documents. Of the 8,787 questionnaires distributed, 865 were completed and returned (a response rate of not more than 11%). Of the 2,328 requests to be permitted to have a closer look at the actual tender documents, 1,099 requests were granted (a response rate of 47%).

In this study the researchers counted how many environmental criteria they found in the tender documents. The tender documents were classified based on the actual number of environmental criteria present in the texts. The presence of four criteria suffices to qualify for the highest class,

An analysis of green public procurement in Mauritius

also known as 'Solid Green'. The presence of one to three criteria accords the 'Light Green' status on the contract. Based on a survey of more than 1,000 tender documents, the researchers concluded that 36% of purchases by EU member states are either Light Green or Solid Green.

The analysis of the completed questionnaires, on the other hand, suggests something completely different. Of all the questionnaire respondents 67% perceive that they use environmental criteria when purchasing. The latter percentage is almost twice as high as the former. Evidently, the information gained from questionnaires is not entirely trustworthy. The researchers themselves also conclude as much:

Interesting is that the results gained from the tender analysis differ from the answers given in the questionnaires. It is clear that organisations perceive that they are implementing green procurement more than they are actually doing it.

The report also provides detailed information on the Netherlands. Within the Netherlands the researchers initially requested 76 tender documents. Eventually purchasers only made 60 documents available of their own accord. Based on that number the researchers drew the following conclusion for the Netherlands: 30% of the tenders are light green and 10% are solid green.

 The researchers, however, confined themselves to examining environmental criteria. Thus the report does not reflect on the presence of social criteria in the tender documents. It also remains unclear whether the voluntary character of providing the tender documents may have influenced the score. Ideally, the researcher ought not to be dependent on the courtesy these employees. The required tender documents should simply be freely accessible to the researchers.

 The classification method used by the researchers is also open for debate. The classification ought not to depend solely and exclusively on the actual number of criteria present. The number should ideally be viewed in the light of the nature and complexity of the contract. Thus in some cases it is possible for a contract to qualify for the highest class after meeting only a single


An analysis of green public procurement in Mauritius

criterion. For example, when tenders are invited for the supply of a simple official vehicle demanding compliance with the 'Euro norm 5 label- currently the strictest environmental norm within European Union. At the same token, tenders may well fall in a lower class even if they tick more than one box. For example, a complex contract comprising several lots, such as a contract to provide business trips including air tickets, hotel accommodation, lunches, dinners and car rentals. Classifying a contract according to the number of criteria present is a useful method, but only if the nature and complexity of the contract are taken into account as well. 

2.7 .5 In April 2008 the BECO Group published the report 'Looking for the best approach' (Reinhoudt, J. 2008). They asked 155 Dutch organisations to fill in a questionnaire (on a voluntary basis). The answers should supply information on the state of sustainable procurement within these organisations. 52 organisations completed the questionnaire (a rate of 34%). The study concluded as follows: "At this juncture less than 25% of the purchases made by most organisations are sustainable purchases." Once again, it is unclear to what extent this result mirrors the actual state of sustainable procurement within Dutch country. Nor does the study comment on whether or not sustainability is in practice included as a major requirement.And, as with the other studies, the outcome may have been influenced by the voluntary nature of the questionnaires.