The Ripple Effect: Sustainable Procurement for People and Planet from the World Bank

What we buy today can make or break the world of tomorrow. Unsustainable choices empower industries that harm the environment and society, while sustainable procurement empowers those committed to better practices, fostering a healthier planet and fairer communities. In 2022, the global government procurement market was estimated to be worth $12-13 trillion. Now imagine a world where all that spending is guided by climate and social considerations.

“The core principle of sustainable procurement is to use global public spending power to encourage institutions and organizations to embrace and maintain environmentally and socially sustainable practices,” said Ed Mountfield, Vice President for Operations Policy and Country Services (OPCS) at the World Bank. “The goal is to create a positive cumulative impact for both people and the planet.”

Success stories of bank-financed projects

World Bank-supported projects using sustainable procurement practices have delivered significant benefits, including supporting small and minority-owned businesses, reducing emissions using innovative technology, and boosting green industries:

· Battery energy storage systems in South Africa. In funding Battery Energy Storage Systems to support South Africa’s transition to renewable energy, it was critical to develop local capacity to operate and maintain the project over its 20-year horizon. Evaluation criteria were developed to target historically disadvantaged groups. As a result, of a contract value of $237 million from the first six sites of the program, approximately one-fifth ($47.4 million) was awarded to SMEs from these groups. The project is ongoing and we are monitoring skills development, the number of trainees and the type of skills acquired, as well as the number of jobs created.

· Dakar rapid bus project. For this project, bidders had to adhere to strict international emissions standards, leading many to propose electric buses. This transition from diesel buses is expected to avoid 1.2 million tonnes of greenhouse gas emissions over 30 years.

· Wastewater treatment plant in Vietnam. In Vietnam, the Bank financed the construction of a wastewater treatment plant, while the government was responsible for financing its operation and maintenance. This arrangement encouraged the government to consider life cycle costs, quality and service life in addition to upfront construction costs during the bidding process. Bidders were encouraged to propose environmentally friendly, energy-efficient technological solutions. They were also asked to consider climate change impacts and reduce carbon footprints in the design and construction of the treatment plant.

Sustainable Procurement Tools and Resources

“Countries around the world are increasingly recognizing the importance of sustainable government procurement,” notes Hiba Tahboub, Chief Procurement Officer at the World Bank“To support this shift, the World Bank has developed a suite of tools to help countries improve their procurement skills and achieve their sustainability goals through effective practices.”

Our clients are keen to improve their sustainable procurement practices and we have been actively responding to this demand. For example, a recent five-day training programme in West Africa provided participants with invaluable knowledge and skills. These resources will help countries implement sustainable procurement in Bank-funded projects, improving their understanding and skills.

The tools and resources made available by the Bank include:

· Guidelines Documents: Four detailed guidelines provide options for identifying and mitigating environmental and social risks through procurement. They offer practical advice on implementing sustainable procurement within development projects. These guidelines help countries meet high environmental and social standards while achieving their own economic goals, such as job creation and support for minority- and women-owned businesses.

· Interactive eLearning modules: The first module provides a non-technical introduction to sustainable procurement, while the second provides more detailed, business-focused content.

· Risk Mitigation Tool: provides step-by-step guidance for procurement activities to address five environmental and social risk areas: forced labour, child labour, sexual exploitation, occupational health and environmental impacts at each stage of the project cycle.

· Optional contract clauses:Borrowers can include these clauses in national procurement documents to mitigate environmental and social risks where necessary.

These resources demonstrate the World Bank’s commitment to helping countries leverage their investments to achieve sustainability goals, prevent social and environmental harm, and support their broader development goals. By providing countries with practical guidance, the World Bank aims to promote lasting positive impacts through sustainable procurement practices.