Journal of Environmental Planning and Management

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Sustainable procurement in practice: Lessons from

local government

Joyce Thomson & Tim Jackson

To cite this article: Joyce Thomson & Tim Jackson (2007) Sustainable procurement in practice:
Lessons from local government, Journal of Environmental Planning and Management, 50:3,
421-444, DOI: 10.1080/09640560701261695

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Journal of Environmental Planning and Management,
Vol. 50, No. 3, 421 – 444, May 2007

Sustainable Procurement in Practice:

Lessons from Local Government
JOYCE THOMSON & TIM JACKSON
Centre for Environmental Strategy, School of Engineering, University of Surrey, Guildford, UK

(Received November 2005; revised January 2007)

ABSTRACT By committing to green procurement, the UK government has taken a key initial
step towards sustainable development. But can this be put into practice? This policy analysis
explores the background to green procurement in English local government through desk research
and data collection, including interviews with five local authorities. It finds that green
procurement has been encouraged through legislation, providing information and dismantling
barriers, but momentum was lost following the Gershon review. Implementation of the new action
plan would ensure green procurement becomes embedded within government procurement. New
information to link up green procurement with organisational goals would also expand the
horizons of green procurement.

Introduction
The UK government has committed itself to sustainable development in all that it
does. The greening of public procurement was seen as a key initial step that would
provide suppliers with a major incentive to reduce their environmental impacts and
stimulate markets for sustainable products and services. But is green procurement
really happening in the public sector?
This study focuses on green procurement within local government where the
largest percentage of public procurement spending occurs and tries to address two
questions. First, how is green procurement policy being put into action in local
authorities? Second, how can environmental benefits from choosing a greener
product influence the procurement decision-making process?
Answers to those questions are sought through an understanding of the operating
environment for local government procurement and by gathering evidence for what
progress is being made and what problems are being encountered. Therefore, this
paper is primarily a policy analysis involving desk research and data collection, and
includes evidence from a small practical investigation by semi-structured interview of
five local authorities. Policy analysis begins with an overview of events that have put

Correspondence Address: Joyce Thomson, c/o Professor Tim Jackson, Centre for Environmental Strategy,
School of Engineering, University of Surrey, Guildford, GU2 7XH, Surrey, UK.
Email: jo.thomson3@virgin.net

ISSN 0964-0568 Print/1360-0559 Online/07/030421-24 ª 2007 University of Newcastle upon Tyne

DOI: 10.1080/09640560701261695
422 J. Thomson & T. Jackson

green procurement onto the government’s agenda and an outline of the major
legislative and policy changes on international and domestic scenes. Included in this
analysis is consideration of the tension between green procurement and other
priorities, most notably the efficiency agenda. There is then a look at how decisions
are made in local authorities and what new types of information are becoming
available to support green procurement. Finally, consideration is given to how green
public procurement can be encouraged.

A Changing International Environment

Increasing globalisation means that what happens in the UK must take account of
international agreements and trends. This section examines the UK’s commitment to
sustainable development, the international framework for UK procurement and how
other countries are pursuing sustainable procurement.

Sustainable Development
In 1992, the United Nations (UN) held a meeting in Rio de Janeiro to establish how
the world should tackle climate change. The outcome of this was the ‘Declaration on
Environment and Development’ and the ‘Agenda 21’ statement. Signing those
committed the UK to sustainable development, requiring environmental protection
to become central to long-term economic development and laws to reduce
unsustainable patterns of production and consumption. The UK adopted a set of
policies and programmes for sustainable development that put the responsibility for
leadership on national government and required participation from local govern-
ment. Agenda 21 advocated that governments work in partnership with international
organisations, business, regional, state, provincial and local governments, and non-
governmental and citizens’ groups.
Whilst Rio provided the impetus and much of the inspiration for sustainable
development policy, the EU directed how it should be put into action in Europe.
The principles of sustainable development were enshrined in Article 6 of the EC
Treaty and The Cardiff Process outlined how this would be implemented (EU, 2004).
The UK government reacted promptly to Rio, publishing ‘Sustainable Development:
the UK Strategy’ in 1994. By 2000, 93% of UK local authorities had Agenda 21
policies that outlined their broad positions on sustainable development and explored
methods for consultation and co-operation across local government and the
community (Hansard, 2002).
In 1997, the second sustainable development strategy ‘A Better Quality of Life’
led to a series of local government acts. These broadened local government
responsibilities to include the well-being of the local community and required that
environmental, social and overall economic costs were considered in the
procurement decision-making process. Embracing sustainable development re-
quired structural change and new ideas across the organisation of government.
It also enhanced the role of NGOs, as government formed closer contact with
special interest groups. In 2005, the third strategy ‘Securing the Future’ focused on
delivery of sustainable development to embed it more deeply in day-to-day decision
making.
 Sustainable Procurement in Practice 423

Society has become much more interested in sustainable development as evidence

has mounted over climate change, as well as concerns over security of energy
supplies, the health consequences of pollution and the social impacts of
globalisation. Sustainable Development in Government (SDiG) identified pressure
from the public and NGOs as the single most important driver in government
environmental policy (SDiG, 2003).

Legislation
The World Trade Organisation’s Agreement on Government Procurement (GPA)
sets the framework for EU legislation on public procurement. This voluntary
reciprocal agreement establishes rules for tendering and requires fairness, and is
intended to make government procurement markets less discriminatory and more
transparent. All EU countries are signatories to the GPA and EU procurement
legislation was amended by directives in 1997 – 98 to comply with it.
The main pieces of EC procurement legislation are the procurement directives
(EC, 1992, 1993a; updated EC 2004). UK public procurement must take account of
other European legislation and policies relating to competition and health. In
addition, legislation on waste is making it increasingly difficult and expensive to
dispose of unsorted waste (EC, 2000, 2003) and is affecting procurement decisions.
Indeed, there will be impacts across the supply chain when the EC directive on waste
electricals is implemented in the UK in 2007.
The EU has supported green procurement by dismantling barriers. For example,
the EU sees the creation of vibrant local business communities as important for
achieving social objectives, particularly employment, and for reducing environ-
mental impacts through buying locally. However, small local businesses traditionally
have had difficulty in accessing public contracts, and rules on competition and state
aid limit the direct support that can be given. In 2004, the EU responded by
producing the European Charter for Small Enterprises outlining how to help small
companies win public contracts, including using structural funds to improve their
internal management systems and on-line technology.
Several documents have sought to clarify green procurement. In 2001, the EC
Interpretative Communication set out what trade-offs can be made between
environmental or social objectives, and economic objectives without transgressing
EC principles (ECi, 2001a). Table 1 lists some of the environmental gains that can be
achieved (ECi, 2001a; BiP, 2004). A product can be specified in terms of energy
efficiency in use, hazardous substances produced, waste generated, water used and
whether it meets animal welfare or organic standards. However, it is not permissible
to specify the geographical location of a supplier or to divide up a contract with the
intention of evading the tighter controls for larger contracts.
The Interpretative Communication also lays out the legal implications of
incorporating environmental and social considerations at the various stages of
contract. Specifications must be listed clearly in the contract notice or contract
documents before tenders are offered. Variants are allowed, enabling new
technologies to be considered (EC, 1993b). Once specifications have been met, a
procurement decision should be based on the Best Value principles of lowest price or
most economically advantageous tender.
424 J. Thomson & T. Jackson

Table 1. Some of the environmental characteristics achievable under procurement rules

Stage Type of specifications possible Notes

Pre-tender . Presence of an environmental Cannot require an EMS
management system (EMS) or
evidence of environmental
controls
. Compliance with health, safety
and environmental legislation
Specification stage Subject matter specifications: If standards are used, then
. Product should be made of must allow equivalents.
recycled material, recyclable Cannot over-specify, e.g.
material or should itself be ‘electricity made from wind
refurbished power’ is too specific
Technical specifications:
. Organic
. Use green electricity in
production
. From sustainable sources
Award stage Full lifetime costs should take Must all relate to cost savings,
account of: but these may occur
. Water consumption elsewhere in the organisation
. Energy consumption
. Waste disposal
. Durability
. Reduced risk and
administration costs for
compliance with current and
future legislation
Execution of contract . Delivery frequency Must announce contract
. Short notice delivery clauses in advance
. Packaging and recovery of
packaging
. Use of reusable containers
. Collection, recycling and
re-use of waste
. Delivery of concentrate, e.g.
detergent

The updated Procurement Directives bring together and harmonise procurement

regulations for public supplies, works and service contracts, as well as the public
services (water, energy, transport, postal) sectors (EC, 2004). They also encourage
proper use of e-procurement and extend procurement rules to contractors.
Special interest groups have influenced how legislation is interpreted by helping
public bodies to set specifications. For example, the ‘Slow Food’ movement in Italy
(Slow Food, 2001) and a local food initiative in France (Petts, 2003) have
encouraged public bodies to specify the regional character of the food, the level of
variability of the menu, seasonality of the menu and delivery frequency. Appropriate
use of EU certifications for Protected Designation of Origin and Protected
Geographical Indication has allowed food of local character to be specified
 Sustainable Procurement in Practice 425

(Morgan & Morley, 2002). In effect, foreign or distant companies are not prevented
from supplying these foods, but flexible local companies are often in the best position
to comply with these specifications.

The International Picture

Since the Rio Declaration, some countries, regions and cities have made significant
progress, putting into place a range of structural changes to support sustainable
development. In 2004, the UN sought to advance sustainable consumption and
production in a wider group of countries through ‘The Marrakech Process’.
Although there has been little formal evaluation of public green procurement
policies, considerable variations are evident in how green public procurement is
implemented (Johnstone & Erdlengbruch, 2003). These reflect differences in
existing political infrastructures and policies, as well as differences in approaches.
Generally requiring organisations to develop green procurement policies (the
approach taken by Japan and Denmark) has been more successful than legislating
that organisations should consider environmental impacts (that of Austria and
Germany).
Japan is the leading country in green public procurement. Strong policy leadership
from the top of public and private organisations has resulted in a comprehensive and
integrated approach (Ochoa et al., 2003). Indeed, the Japanese government once
stated that implementation of Agenda 21 was so important that it would consider
accepting a lower standard of living if that were necessary (UN, 1997). An Action
Plan for the Greening of Government Organisations was introduced in 1995
requiring all public bodies to develop their own environmental procurement policy
(ECi, 2004). The Japanese government has developed eco-labelling, purchasing
guidelines, product lists, economic instruments, a mandatory reporting system, life-
cycle analysis information and a public awareness programme.
In the US, the Environmental Protection Agency introduced programmes to
encourage Design for Environment and to reduce energy use in buildings and
lighting (UN, 1997, 2002). Its Energy Star rating has been highly successful,
improving energy efficiency in computers worldwide. Although there is little
political leadership from federal government on sustainable development, states are
greening their procurement, arguing that there are financial and social benefits for
doing this and generating quantitative data to support this argument (Bailie et al.,
2001).
The EU has provided leadership on sustainable procurement, with targets for
renewable energy consumption and CO2 emissions, standards such as in building
energy use, and eco-labelling such as the Eco-label Flower (ECi, 2001b). The legal
framework has been changed with guidelines for areas of uncertainty (ECi, 2001a;
EC, 2004) and structural adjustments made to encourage SMEs and local
development (EC, 1999). The EU has funded research into new technology and
strategy developments through organisations such as the International Council
for Local Environmental Initiatives (ICLEI). Figure 1 shows results from an ICLEI
survey indicating that Denmark and Sweden are the leaders in green public
procurement in the EU, followed by Germany, Austria and the UK, with little
progress in the southern EU countries (Ochoa & Erdmenger, 2003).
426 J. Thomson & T. Jackson

Figure 1. Proportion of public authorities including environmental criteria for more than 50%
of their purchases.

Sweden has taken a holistic approach whereby the pursuit of health targets, for
example, is used as a justification for reducing fossil fuel use. Green procurement
policy has focused on knowledge building and training since the early 1990s.
In Denmark, central government has campaigned to change consumption patterns,
legislated on energy and water use, supported the development of renewable energy
resources and required public bodies to develop green procurement policies (UN,
2002; Ochoa et al., 2003).
Devolution has offered new opportunities to try out different approaches within
the UK legislative and cultural framework. Wales has piloted how to maximise
procurement from SMEs within EU laws and tested the social clauses within
procurement (Welsh Assembly, 2003). Scotland has set itself demanding targets for
renewable energy use (Scottish Executive, 2005).

A Changing Culture for Local Government Procurement

This section outlines how government has acted to put green procurement into
practice. The complexities surrounding green procurement represent a considerable
challenge for public procurement. The problems caused by lack of targets and
incentives for green procurement were exposed by the ease with which attention was
diverted away from environmental issues in response to the Gershon review. With
mounting concerns over climate change including the Stern report, the government’s
 Sustainable Procurement in Practice 427

response to recommendations from the Sustainable Procurement Task Force is

expected to be robust and to embed green procurement more firmly within routine
procurement practice and the psyche of local government from top to bottom.

The Regulatory and Policy Environment

In recent years, the role of UK local government has changed from being a provider
of services to becoming a manager of the local community. This transformation
began in 1988 with the introduction of Compulsory Competitive Tendering, which
contracted out services to the private sector, exposing local government spending
decisions to market forces.
The Local Government Act (LGA) 1999 introduced the concept of Best Value to
local authorities so that wider considerations than just price were taken into account.
The LGA 2000 then gave a new discretionary power to principal local authorities to
promote the economic, social and environmental well-being of their local
communities, requiring local authorities to consult with their communities in
drawing up Community Strategies (Office of the Deputy Prime Minister (ODPM),
2001). The LGA 2003 then gave those local authorities reaching a certain level of
competence new ‘freedoms and flexibilities’ to borrow money, remove ring fencing
from social services money and trade expertise with other public bodies.
Non-statutory guidance from the ODPM encouraged councils to consult with other
public bodies, and business, voluntary and community groups through the formation
of local strategic partnerships (LSPs). As well as co-ordinating and committing the
whole community to the community strategy, LSPs were expected to strengthen the
infrastructure of the community and widen the influence of public bodies. These
would benefit procurement by spreading good practice, supporting product and
service innovations and strengthening the bargaining power of public money.
Following a review of local government procurement, the government published
the National Procurement Strategy (NPS) for Local Government in 2003. The
strategy confirmed the importance of proper procurement procedures and the need
for capacity building to address deficiencies in procurement expertise. Procurement
had evolved from being a separate purely financial operation to playing a central role
in delivering government objectives.
Through the Comprehensive Performance Assessment, the Audit Commission
assesses local authorities against performance indicators. These include Best Value
Performance Indicators set by central government, and local indicators appropriate
for an area and local political objectives. The Audit Commission gives general help
on how to improve and provides specific guidance on areas of weakness, whilst
relaxing limits for the best performing authorities. A local authority sets out how
policy objectives will be pursued in a coherent set of policy documents.

Dismantling Barriers
The government has dismantled some barriers to sustainable procurement. For
example, most small local businesses have been reluctant to supply local government
due to the administrative burdens involved in tendering and the obscurity of the
process. Several developments in recent years have addressed these problems.
428 J. Thomson & T. Jackson

In 2005, the ODPM, DTI and LGA issued ‘The Small Business Friendly Concordat
Good Practice Guide’ and by the end of 2006, over 100 local authorities had signed
up to it (Small Business Service (SBS), 2006). BiP Solutions launched a national pre-
qualification service in December 2006 so that, once accredited, suppliers can tender
for business in all registered public sector organisations (OGC, 2005; BiP, 2006). In
addition, the OGC now encourages the use of a standard pre-qualification
questionnaire for low value procurements and set up a web-based national
opportunities portal with the SBS to widen access to government business.
Another problem area has been the lack of infrastructure which made it difficult for
groups to work together. The nine new Regional Centres of Excellence (RCEs), as well
as the formation of LSPs, have provided arenas where local authorities can meet other
public bodies, suppliers, special interest groups and commercial companies (ODPM,
2004). RCEs now provide advice on partnership working and support procurement
training including university courses. Procurement costs are being reduced through
joint procurement (including reverse e-auctions), resource sharing, and better informed
decision making using analyses of markets and procurement spends. In 2006, the
‘National Procurement Strategy for Local Government—Two Years On’ reported that
41% of councils were working with RCEs. DCLG’s ‘Evaluation of the Local
Government Procurement Agenda’ (2005) also found that RCEs were ‘‘consistently
seen as a source of support for improving procurement across local government’’ (p. 3).
Within a framework of work co-ordinated across the RCEs, many local authorities
are becoming directly involved in national policy development. They are doing pilot
work and are rewarded for good practice through the regional structure. For
example, the councils in Lewisham and Croydon received awards from the London
Mayor for buying recycled products (Environmental Audit Committee (EAC), 2006).
Due to concerns about contravening the EU principle of free movement of goods,
procurement officials have been reluctant to take account of the environmental
impacts of transport. Advice is now that reducing environmental impacts by
specifying mode of transport and the frequency of deliveries is allowed, but the
legality of other actions remains unclear. Purchase of local food can also be
encouraged by careful specification, providing opportunities for small and local
suppliers (Powys Public Procurement Partnership, 2002). Figure 2 depicts how the
drift towards larger contracts can be offset by careful specification and training.
The difficulty of achieving cultural change has been a major obstacle to green
procurement. It was widely reported to the EAC (EAC, 2006) that procurement
decisions continue to be made on the basis of price despite government preferring
‘whole life costs’ for over 25 years. Another entrenched attitude is that procurement
should not be used to achieve other objectives (EAC, 2005). It is difficult to change
attitudes when many practitioners of procurement receive no formal training and
even if they do, sustainability is often not part of the curriculum. If the government
accepts the Sustainable Procurement National Action Plan recommendations, then
cultural change would be constructively addressed (SPTF, 2006a).

Progress Falters
The greening of government procurement began in 1997 when the Department of the
Environment, Transport and the Regions (DETR), issued the ‘Green Guide for
 Sustainable Procurement in Practice 429

Figure 2. The opposing influences on contract size of different parts of government policy and
how to counteract this.

Buyers’ setting out how to include environmental aspects in procurement decision

making. Guidance on specific problems was then given in ‘Environmental Issues in
Purchasing’ a joint note from the Treasury and DETR, issued in 1999, and updated
in 2003.
A cross-Whitehall Sustainable Procurement Group was formed in 2001 to provide
practical help with procurement recommendations, developing information bases
and structures for dealing with complex cross-departmental issues (SDiG, 2003).
This group conducted surveys of central government and reported annually on
progress. But the 2004 report was criticised by the National Audit Office for
presenting ‘an overly positive view of departmental performance’ (NAO, 2005).
Oversight responsibility was transferred to the Sustainable Development Commis-
sion to provide a more robust review of green procurement in central government.
When Sir Peter Gershon published his ‘Independent Review of Public Sector
Efficiency’ (Gershon, 2004), the intention was to encourage efficiency in all parts of
government by restructuring, taking advantage of economies of scale and IT, cutting
down on waste and increasing productive time. HM Treasury’s ‘2004 Spending
Review’ responded with plans to implement the efficiency agenda. Nothing in these
documents precluded green procurement, however, these were written from a
financial perspective. The impact these plans would have on sustainable procurement
had not been given sufficient consideration. There was widespread fear that ‘‘what
momentum the agenda had possessed was quickly dissipating’’ (EAC, 2006, p. 7).
Although Gershon’s recommendations were initially viewed with dismay by many
in local government, they soon found that the requirement to deliver big costs
savings provided the momentum local government needed to reform areas of
administration and to introduce new structures of service delivery. By the end of
2006, local government had achieved £3 billion of savings one year ahead of target,
with most improvement in adult social services followed by procurement. The almost
430 J. Thomson & T. Jackson

complete preoccupation with the efficiency agenda in local government is reflected in

the NPS ‘Two Years On’ (2006) report which virtually ignored green procurement.
Proponents of sustainable procurement were galvanised into action to get
sustainable procurement back on track. The publication of DEFRA’s ‘Securing
the Future’ in March 2005 was to prove key as it reaffirmed the government’s
commitment to sustainable procurement. It also stated the UK government’s
intention to become a leader in public sector sustainable procurement in the EU by
2009 and outlined the transformation that would be needed to achieve this.
Meanwhile, the EAC also reported it was ‘‘a great shame that Gershon did not make
it explicit within his Review that the drive to produce efficiency savings should not be
at the expense of . . . sustainable procurement policy’’ (EAC, 2005, p. 7).
These reports were followed by investigations by the Prince of Wales’s Accounting
for Sustainability Group, the National Audit Office and further work from the EAC.
Summarised in Table 2, these reports all helped to define the problems surrounding
sustainable procurement. Evidence was gathered from many sources, including
private sector suppliers complaining that their efforts to offer more sustainable
products were being repeatedly rejected by public procurers (EAC, 2006). Far from
being at the forefront of sustainable procurement, the public sector was lagging
behind private sector best practice.

Table 2. Reports shaping the debate on sustainable procurement

Reports
Gershon’s ‘Independent Review of Public
Sector Efficiency’ for HM Treasury
(July 2004)
HM Treasury’s ‘2004 Spending Review’
(July 2004)
DEFRA’s ‘Securing the Future’
(March 2005)
Accounting for Sustainability Group’s
‘Realising Aspirations’ for HRH Prince
of Wales (May 2005)
Select Committee on Environmental
Audit – Sixth Report ‘Sustainable Public
Procurement’ (March 2005)
National Audit Office’s ‘Sustainable
Procurement in Central Government’
for EAC (September 2005)
EAC’s ‘Sustainable Procurement: the Way
Forward’ (March 2006)
Simm’s ‘Sustainable Procurement National
Action Plan’ for DEFRA and HM
Treasury (June 2006)
Outcome
Recommendations on improving efficiency,
highlighting procurement as a target area
Government’s response accepting
Gershon’s recommendations
Committed government to being an EU
leader in public sector sustainable
procurement by 2009
Found efficiency and sustainability
objectives can be pursued together, giving
advice on how to do this
Identified poor progress and need to
explore problem areas, especially lack of
leadership and misconceptions about
sustainable procurement
Outlined poor progress in central
government, identified main problems
and made recommendations
Identified barriers to sustainable
procurement in government and
highlighted areas for improvement
Recommendations on how to achieve
leadership, priorities, greater ambition
and capacity building, removing barriers,
creating more benefit, and developing
frameworks for change
 Sustainable Procurement in Practice 431

One of the main criticisms was that, although the OGC led on procurement, it was
left to DEFRA to promote the benefits of sustainable procurement (EAC, 2006).
The EAC remarked that the disparity between the stringency of economic
regulations and the absence of environmental targets ‘would constrain even the
willing’. Given that local government procurement is generally accountable to the
finance department and hence to the Treasury, it is not difficult to see why green
procurement was given such a low priority especially after the Gershon review.
In May 2005, DEFRA and the Treasury established the Sustainable Procurement
Task Force (SPTF) with the job of ‘‘drawing up an action plan to bring about step-
change in sustainable public procurement’’. This Task group was led by Sir Neville
Simms, an exponent of sustainable procurement in the construction industry, and
had members from across the private and public sectors, as well as NGOs, trade
unions and professional bodies. It put together a plan that would reform public
sector procurement so that it could deliver on sustainable procurement in a short
timeframe (SPTF, 2006a). Aided by the aforementioned reports (Table 2), this group
drew on private and public sector best practice, and established working groups to
address benchmarking, data collection and priorities, engaging with suppliers,
accountability and capacity building.
The resultant ‘Sustainable Procurement National Action Plan’ made recommenda-
tions on the following: how the government should lead by example; setting clear
priorities; raising performance; building capacity through better information and
tools, and proper training; dismantling barriers and creating wider benefits such as
encouraging innovation, providing opportunities for SMEs and delivering social
benefits. The government is expected to make a robust response to the plan in early
2007 (SPTF, 2006b).

Other Policy Areas

Under ‘joined-up’ government, policy should seek the best outcome for all
government objectives and not just the priorities of one department. Policy research
and the formation of cross-government bodies have helped uncover how policies in
one area can affect others. For example, information about the financial and social
costs of poor nutrition in hospitals, schools and prisons, as well as concerns over
obesity, have highlighted the importance of nutritional quality (Wanless, 2004). The
most visible outcome of this was the transformation in school dinners, led by chef
Jamie Oliver.
Green procurement is also impacted by policies to support local business, waste
management and the degree of transparency in local government activities. Green
procurement is also being encouraged by financial instruments and these are listed
in Table 3 (HM Treasury, 2003).

Green Procurement in Practice

The paper has looked at the international context to green procurement and at what
steps are being taken by central government to encourage green procurement. This
section examines how well green procurement is being put into action in local
government, first exploring the complexities of the decision-making environment,
432 J. Thomson & T. Jackson

Table 3. Financial pressures impacting green procurement

Financial instrument The effect on local authorities

Landfill taxes
Climate change levies
Aggregates levy
Fuel duty differential
Graduated vehicle excise duty
and company car tax
Green technology challenges
Settlement for local authorities
The increasing costs of sending waste to landfill means that
other options such as recycling and re-use, become more
financially viable.
Levies can be minimised by reducing CO2 emissions.
Levies can be minimised by reducing use of virgin
aggregates.
Use of low polluting fuels reduces duty paid on fuel.
Encourages use of cleaner more fuel-efficient vehicles and
makes company cars less attractive.
Encourage investment in energy or water-saving
technologies.
Part of the financial award can depend on involvement in
certain schemes.

then assessing progress as evidenced by large-scale surveys and at the detailed level of
individual local government organisations. Finally, it considers how the need to
justify expenditure means that new information is required to link green
procurement decisions with benefits.

Making Procurement Decisions in a Complex Environment

Diversity within local government means that there is no blueprint for green
procurement. Each local authority has a different set of circumstances and priorities.
Besides receiving policy guidelines and support from central government and RCEs,
local government also receives help from many other organisations such as the
Chartered Institute of Purchasing and Supply, Society of Purchasing Offices, the
Local Government Association (including Improvement and Development Agency),
the Sustainable Supply Chain Forum, the Public Private Partnership Programmes
and NGOs.
Local government has many competing claims on its resources. The priority of a
particular policy can depend on the following: central government priorities
including Best Value targets, Audit Commission recommendations and the amount
of paper (directives and guidance); local issues and local circumstances; the
preferences of individuals in local authorities (members and council officials); and
the difficulty in putting a particular policy into practice compared with what benefits
might result. Whatever priorities are agreed, the actions of council executives should
be consistent with them.
When deciding on a particular purchase, the incentives for practising green
procurement are often limited. In situations where there are obvious cost savings or
involving a publicised commitment, then the procurement choice is clear. However,
for many areas of procurement, there is no obvious ‘right’ decision and procurement
decision makers must use their own judgement. They find it is generally easier to
justify a decision on the basis of price than on wider benefits such as long-term
economic benefit, environmental or social benefits or benefits to someone else,
particularly when advice is unclear.
 Sustainable Procurement in Practice 433

Evidence of Progress
Assessing progress in a local authority and comparing progress are both very
difficult. Besides the problem of diversity amongst local authorities, green
procurement itself is complex. First, the types and sizes of environmental impacts
vary enormously across the range of bought products complicating data collection.
Second, the scope for central guidance on procurement criteria will depend on the
particular product and how widely it is purchased, for example, purchasing
electricity is a very different process from purchasing road resurfacing material.
Third, the priority given to environmental objectives may depend on the particular
policy objectives and managerial style of a department. Fourth, a large number of
people may be involved in procurement decisions. Finally, local authorities are not
compelled to pursue green procurement in any particular way, making comparisons
difficult.
Although most UK public authorities now have green procurement policies in
place, few monitor performance against procurement targets (DCLG, 2005). The
2003 ICLEI study (Ochoa & Erdmenger, 2003) and a European Commission study
(ECi, 2005) found that many procurement decisions were still taken without
reference to green considerations and the main reason for this was usually poor
political commitment. As intentions are often not translated into reality,
measuring progress by looking at inputs such as presence of targets or availability
of tools does not give an accurate picture. The EAC found ample evidence of this
problem, one contributor reporting that ‘‘in most cases, public sector projects
procure the cheapest most polluting option’’ (EAC, 2006, p. 28 of the Oral
Evidence). As well as having tools and targets, it is therefore essential to have
political support for green procurement.

Evidence from Local Authorities: Background

A small survey was conducted to explore the general approaches to green
procurement amongst some of the more advanced local authorities in this policy
area. Representatives from three unitary councils in London and two rural county
councils in the South East of England were interviewed (see Acknowledgements).
The objectives were to outline the structure of procurement, identify the main
influences on procurement strategy and establish whether collating the different
impacts of green procurement and calibrating them to an individual local authority
can strengthen support for green procurement. (See ‘Measuring Output Benefits’ for
the background and outcome to this last part.) A summary protocol for the
questionnaire instrument can be found in the Appendix.
It is recognised that the small number of interviews limits the statistical relevance
of results, but the depth of the interviews means that they provide significant
insight into the perspective of procurement practitioners. Together with the
preceding analysis of the policy environment and the published evidence of
progress in green procurement, this research addresses both study questions, i.e.
how green procurement policy is being put into action and how environmental
benefits from choosing a greener product can influence the procurement decision-
making process.
434 J. Thomson & T. Jackson

Evidence from Local Authorities: Results

Four of the local authorities had a procurement policy in place at the time of the
interview, and the other published one soon afterwards. Central procurement
policies relating to green procurement covered goods and most services, but in the
case of two local authorities, works such as building and roads had separate policies.
All local authorities provided information on green procurement to relevant staff
using various combinations of intranet, newsletters, handbooks, guidelines, and
meetings to raise awareness and share experiences. Forums addressing specific
procurement issues were seen as important by three councils and the same number
employed environmental champions to encourage general environmental awareness.
Four authorities had a central procurement function, and at the remaining
authority an appropriate department would take the lead in a product area, for
example, stationery procurement was led by personnel. In one, central procurement
was run as a separate business unit fulfilling the common procurement requirements
of different operating areas. Recently, other public bodies have also become
customers. Appropriate environmental criteria are identified through feedback from
customers and these are reflected in product choices in the product catalogue.
In the remaining three local authorities, central procurement had a range of
functions including developing large contracts, procuring certain high spend
commodities such as electricity and stationery, providing information and guidance
on procurement in other areas and developing procurement policy with individual
departments. Two of the local authorities were pursuing partnerships in procure-
ment with other local authorities and public bodies such as the police and health
authorities. Both councils questioned on SMEs and local businesses indicated that
they supported and encouraged these groups to tender for procurement contracts,
but legislation does not allow councils to prefer these groups.
Adherence to green procurement is generally voluntary, except when commodities,
such as electricity or paper, are procured centrally. Contractors and suppliers are
encouraged but not obliged to have the same green standards as the local authority.
However, councils may specify green standards for a product and local authorities
do sometimes verify environmental claims. In making a procurement decision, all
councils take account of whole-life costing and can pay a small premium for
environmental and social benefits. All procurement decision makers can consider
procurement avoidance (by sharing, upgrading or repairing an existing product),
material composition (recycled, recyclable), energy consumption in use, the need for
documentary evidence of environmental performance and any impact on wider
strategic goals. In addition, four local authorities considered whether the supplier
had an EMS, offered take-back and minimised packaging, and three considered
method of transport. All local authorities used standard contracts or standard
elements within contracts, and all but one included standard environmental terms in
those.
Four authorities were achieving targets for switching to renewable electricity, at
least in larger premises. Three had a policy of buying energy-saving computers with
standby mode and flat screen monitors. One council required all new homes to
comply with Eco-homes standards and all pursued energy efficiency targets set by
central government. In one or two boroughs, there were preferences for Fair Trade,
 Sustainable Procurement in Practice 435

fresh or local food, and against GM or out-of-season food. In council catering, one
borough banned 50 food additives in addition to national standards. However, there
was no consistency in food targets across local authorities. Targets for use of
recycled paper were widely used. There were policies to recycle aggregates and select
vehicles using less polluting fuel, but no targets were given. One authority was
developing environmental criteria for furniture and another, a methodology for
ensuring that chemicals, paints, solvents and asbestos complied with health and
safety, and waste legislation.
The monitoring and reviewing of procurement strategy was mainly the
responsibility of corporate procurement departmental managers, with senior officers
and members taking a more prominent role in the development of procurement
strategy. However, there appeared to be significant differences amongst the councils
in the degree of involvement of senior officers and members. In one council,
development of strategy involved very active elected members, as well as a
consultant, a qualities impact assessment and a citizen’s panel.
There were references to the role of the procurement strategy in achieving
corporate objectives in such documents as the Community Strategy, local
performance plans and Best Value targets. There was widespread recognition that
procurement interlinked with cross-cutting themes such as co-operation across
departments, staff training, the need to support SMEs and with health and safety
objectives.
Central government was the main influence on green procurement strategy. Other
external influences were the London Green Procurement Code, the Nottingham
Declaration, Fair Trade and RCPEs. The two councils with EMSs saw them as very
important for delivering green procurement. To inform green procurement decisions,
authorities used eco-labelling, ratings, industry labels and accreditations, LCA
information, standards, environmental preference information and best practice
examples.
All authorities measured procurement performance and those with a procurement
strategy included environmental performance in this. Performance measures most
commonly used were reviews, regular meetings, benchmarks, targets and perform-
ance specifications. One council used the Business Excellence Model as a framework
for testing procurement performance. Three of the councils said that it was possible
to identify the impact of certain procurement decisions on reducing CO2, and one or
more councils thought procurement decisions could be linked with at least one of the
following: job creation, SME formation, recycling, health targets.
The main barrier to green procurement was thought to be lack of priority at senior
levels by four of the interviewees, and cost by the fifth interviewee (at the council
with members very actively involved in development of procurement strategy). Cost
was also mentioned as the second most important barrier by three interviewees.
Other significant barriers were insufficient cost/benefit data and guidance, and
concerns over legality. On the impact of the Treasury’s 2004 Spending Review (and
the preceding Gershon review), there was a strong difference of opinion. One argued
that these reports took management focus off sustainability and shortened time
horizons by making it more difficult to take full lifetime costs into account. Another
argued that environmental specifications should be an integral part of product
specifications, therefore should not be impacted by efficiency considerations and the
436 J. Thomson & T. Jackson

efficiency drive should strengthen the argument for taking into account lifetime
costs.
One interviewee commented that many public organisations, especially schools,
had shown little interest in environmental issues including green procurement, but
this was changing rapidly. This was due to a combination of factors, most
importantly new waste regulations making disposal of mixed waste much more
expensive, and also the EcoSchools program, the new RCE, a series of initiatives to
reduce waste and costs (e.g. improving lighting and heating), and targets for
recycling, energy recovery, water use, consumables and climate change. Another
commented that the recent focus on the quality of school meals is likely to have a
profound effect on that area of procurement.
Some authorities are also looking at ways to reduce environmental impacts
through structural change, such as rationalising delivery of bottled water, planning
considerations, e.g. location of buildings, and support for new waste recovery and
reuse businesses. One authority disseminates best practice information to other
authorities, in line with its obligations under EMAS.

Evidence from Local Authorities: Comments

These findings highlight the positive steps being taken within local authorities to
enact green procurement. They also underline the diversity of approaches and lack of
consistency in targets. Nevertheless, the areas of progress and the ways of achieving
it are similar and in-line with the NPS. Differences that seemed important in delivery
of green procurement were the commitment of leadership, the presence of an EMS
and how enthusiastic individuals were. Participation in linked areas such as
partnering and SME support seems to support green procurement.

Innovations: Information, Models and Concepts

Until recently, making a procurement decision involved knowing the price and
whether a product met health and safety standards. Now, more complex information
is required about the environmental, social and overall financial impacts of
procurement options. Therefore, new information, modelling and concepts are
being developed to inform the procurement decision-making process. For example,
databases of new information are being accumulated by organisations such as ICLEI
and the US Department of Energy (DOE) to quantify the environmental impacts of
specific procurement decisions (US DOE & Oak Ridge National Laboratory, 1998;
Pierrard, 2003a; Schmidt & Frydendal, 2003). The government’s ‘Quick Wins’ list
uses LCA information to identify preferred products (OGC, 2004). In addition,
information is now being compiled so that the ethical and environmental credentials
of products such as food and timber can be verified.
Rating systems and certifications can encourage specific greening activities. In
1990, the Building Research Establishment in the UK developed BREEAM, an
environmental assessment method for construction and property management to
improve building design and reduce energy use and CO2 emissions. This
standardised approach allows comparison of the energy consumption of different
building options and accreditation provides a tangible reward for environmental
 Sustainable Procurement in Practice 437

prudence. The CEEQUAL scheme provides a similar performance standard for civil
engineering projects. The UK government is working with the EU to develop new
standards for electrical appliances.
Work has been carried out to understand how decisions in one area can impact
costs elsewhere. DEFRA now produces figures on how much it costs to clear up the
pollution caused by agricultural chemicals allowing the external costs of different
types of farming to be compared (DEFRA, 2002). INAISE research has shown that
social economy financing represents a cost-effective way of creating jobs and more
sustainable patterns of procurement, justifying the support of small businesses and
new microfinance techniques (INAISE, 1997).
Tools can improve decision making and establish new cause-and-effect relation-
ships across different policy areas. For example, mapping has been used to study
quality of life issues such as food deserts and can help government to develop better
targeted policies on transport and community health (Guy, 2000; Local Government
Association, 2004). In the US, input-output models such as from Regional Economic
Models Incorporated (REMI) are predicting gains in jobs and investment from
switching to renewable electricity. EMSs, benchmarking, protocols and codes,
gateway procedures and minimum procurement standards have all helped improve
procurement decision making in recent years.
Making an argument for change can be easier if benefits are identified and
measured. However, benefits can be difficult to quantify, even when they are real
enough. Working with academia, NGOs have taken on the challenge of finding ways
to do this and have been responsible for much of the fresh thinking on these problems.
The development of concepts such as Professor Tim Lang’s ‘food miles’ and the New
Economics Foundation’s local multiplier LM3 have proved particularly effective at
focusing attention on unsustainable practices. Such terms have now entered the
vocabulary of government policy, helping it to communicate what indirect benefits
would result from changing structures or practices (e.g. DEFRA, 2003).
Although the underlying work is often complicated, the success of information,
models and concepts relies on conveying a clear message that is meaningful to the
audience. Some of the information and models are most relevant at the operational
level. For example, LCA information and building standards are used by
procurement decision makers. Others, such as LM3 and the REMI model, are
important in influencing policy makers and are helping to drive forward the
sustainable procurement agenda.

Measuring Output Benefits

At the operational level most attention is focused on the inputs to green procurement,
such as whether there is a green procurement strategy and targets, but to gain support
for green procurement, the output benefits have to be understood. Therefore,
information is needed on what green procurement decisions can yield the best
benefits. Getting this information is not easy but was the objective of the ICLEI
‘Relief’ project. ICLEI started by identifying that the largest areas of typical product
procurement expenditure were buildings and energy, followed by IT equipment,
lorries and fuel, furniture, paper, food and cleaning products (Erdmenger, 2003). This
is broadly consistent with an analysis of London authority spending (London Centre
438 J. Thomson & T. Jackson

of Procurement Excellence, 2004). ICLEI then selected these product areas where
there is a clear procurement choice associated with consistent and measurable
benefits, and where there is a large environmental impact (Erdmenger, 2003). One
such area is energy, where benefits can be measured for reducing energy
consumption, or switching to renewable sources of energy, or generating renewable
energy onsite. Another is computers where the benefits of switching to flat screen
monitors and requiring a standby mode can be quantified (Erdmenger, 2003).
Although food and catering is not one of the largest areas of expenditure, the
purchase of locally-produced food can have significant social and environmental
benefits as small local growers can respond to changing demand patterns more easily
than in other product sectors. Indeed, the 2005 SDS indicated that the UK food
chain may be responsible for 22% of CO2 emissions. However, it is more difficult to
find a significant clear-cut spending decision relevant to most local authorities
amongst the large array of cleaning products (Erdmenger, 2003). In buildings,
minimum standards legislation limits the scope for discretion and spending is spread
amongst a wide variety of products, but it may be possible to use the BREEAM
classification system to identify a set of quantifiable benefits. In furniture and paper,
benefits from using greener product options will vary with the source of supply and
may not be of direct advantage to a local authority.
For the purposes of this study, three suitable procurement decisions were defined
and an appropriate functional unit of procurement chosen. The rationale for this
type of approach was developed by ICLEI and described in Buying into the
Environment edited by Cristoph Erdmenger and published in 2003. Benefits per
functional unit were estimated and presented in Table 4.
Information came from a variety of sources. Characterisation of clear quantifiable
decisions together with estimates of CO2 savings were derived from ICLEI
publications (Pierrard, 2003b; Schmidt & Frydendal, 2003). The estimate of jobs
created from switching to locally generated renewable energy was derived from
studies from the DTI and the US (DTI et al., 2004; Renewable Energy Policy
Project, 2001). The estimate for investment in the local community from switching to
locally-produced meat, milk and wheat was derived from New Economics
Foundation work (Sacks, 2002). The remaining estimates for investment in the

Table 4. Benefits Calculator: computes the benefits per functional unit

per functional unit

Investment
Decisions to Jobs (in local Money
switch to Functional Unit CO2 saved created community) saved
Electricity from 1 GWh 435 tonnes 1.2* £20 000* –
renewable sources
Energy efficient PCs, PC units 0.0966 tonnes – – £109
with TFT monitor
Sourcing milk, meat £1 m expenditure 161 tonnes – £3 m –
and wheat locally on milk, meat
and wheat

*The location of jobs and investment is where electricity is generated.

 Sustainable Procurement in Practice 439

Table 5. Benefits for Council X, calculated from inputting consumption data for Council X to
benefits per functional unit

in Council X
CO2
saved Investment
Functional Council X (tonnes Jobs in local
Product Unit Consumption p.a.) created community Money saved
Electricity 1 GWh 46.8 GWh by 20 358 60 £1.22 m
the council
121.1 GWh by 52 679 155 £3.15 m
local public
bodies
PCs PC units 1055 replaced 102 – – £115 000 in
every year first year
for five years £575 000
cumulative
by year 5
Food £1 m £3.52 m 567 _ £10.56 m –
expenditure
on milk
meat and
wheat

local community from locally generated electricity and local authority money saved
by buying low energy computers were made by the authors.
The procurement switch benefit was then calculated for each local authority using
the known or estimated consumption of the product involved. These were then
presented to interviewees to explore whether collating and manipulating figures in
this way was helpful. Table 5 gives the figures for hypothetical Council X.
The four local authority interviewees shown the information in Tables 4 and 5 had
mixed views on the usefulness of it. The most positive respondent thought that this
type of information ‘‘would be fantastic’’ helping him to sell green procurement
within the council and to explain procurement decisions to the community. He was
particularly interested in the estimate of jobs created by buying renewable electricity.
A second respondent thought this type of information would be helpful, particularly
if this approach could be applied to other procurement decision areas, as advances
were already being made in the selected procurement decision areas. The two
remaining respondents preferred other ways of supporting green procurement,
including better information exchange, more whole-life cost information, govern-
ment funding to reduce the cost of green products and more priority by OFSTED to
environmental aspects of schools.

Conclusions
There have been major changes in local government. Local government has a new
role of managing its community. The NPS gave a vision of how local authorities can
deliver local leadership and improve public services through proper procurement
440 J. Thomson & T. Jackson

processes. The Gershon review encouraged local authorities to rationalise procure-

ment along with other functions. Guidance, standards and LCA information are
helping to frame procurement requirements to achieve the best overall outcome and
some barriers for green procurement have been dismantled. New regional structures
and ways of co-operating with other public bodies are improving access to expertise
and helping to spread good practice. E-procurement and support for SMEs are
opening public procurement markets to a wider range of suppliers. Meanwhile,
government has committed to sustainable development with targets for CO2 and the
use of renewable energy.
There has been real progress in green procurement amongst some local authorities.
However, green procurement is limited in terms of the range of products involved and
the level of ambition. The ease with which the momentum was lost following the
Gershon report highlighted the lack of embeddedness of green procurement. It is
hoped that the government’s response to the ‘Sustainable Procurement National
Action Plan’ will build capacity and provide green procurement with the priority it
needs, as well as a system of benchmarking and targets so that progress can be better
monitored.
At the operational level, the main driving force for green procurement has often
been the presence of motivated individuals in the procurement decision-making
process. However, by showing how green procurement can contribute towards
organisational objectives, support for green procurement should strengthen, even
amongst individuals or organisations not motivated by environmental benefits.
Imaginative new ways to quantify benefits, model scenarios and relate procurement
decisions to benefits will support new areas of green procurement.
At the leadership level, the growing imperative of tackling climate change
outlined by the Stern report together with pressure from the public, business and
NGOs should make politicians more supportive of green procurement. Never-
theless, here too there is an important role for new information to define what
structural change is needed, to develop new models to quantify the wider impacts
of procurement decisions, to create new financial instruments to reward
environmental benefits and to introduce new concepts to change perceptions and
improve understanding.
Therefore, better information is needed at all levels to widen and deepen the scope
for green procurement. Careful presentation is essential to give perspective to any
message and to ensure its relevance to an audience. Much of the groundwork for the
development of new financial instruments, concepts and economic models is driven
by the NGOs. Paradoxically economic arguments have become a strong ally to the
green movement in the drive towards sustainable development.

Acknowledgements
The initial research was conducted for an MSc dissertation at the University of Surrey
in 2004 and extended with three additional interviews in 2005. The authors are grateful
to the following local authority managers for generously agreeing to participate in
60 – 90 minute interviews: Environment and Sustainability Manager at Croydon
Council (19 March 2005); a manager at County Supplies, Hampshire County Council
(17 February 2005); Sustainability Manager at Southwark Council (22 February
 Sustainable Procurement in Practice 441

2005); Energy and Sustainability Manager at Lewisham Council (25 February 2005);
and one other local authority which wished to remain anonymous.

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Appendix: Summary Protocol

The objective of this research was to explore the opportunities and problems faced
by those implementing green procurement. The interviews were semi-structured and
used a questionnaire, completed by the interviewer. A combination of closed and
open-ended questions was used, with scaling in only one question (measuring the
involvement of different personnel in the procurement strategy). This flexible format
allowed individual authorities’ policies to be investigated and seemed appropriate
given the diversity amongst local authorities.
Headline questions were as follows, with areas of detailed exploration in brackets:

1. Do you have a formal, written green procurement policy?

2. How are procurement personnel informed about green procurement?
3. Structure of procurement (centralisation, co-ordination, compliance)
4. The use of standard contracts (standard models/templates/environmental
terms, contract stages, e-procurement, standing orders, contract size,
contractors)
5. Which personnel are involved in the procurement strategy and what is their
involvement?
6. Which procurement areas does the green procurement policy cover?
7. Procurement policy (environmental considerations, purchase areas, decision
making)
8. Procurement strategy (products, centralisation)
9. What are the green targets for electricity, personal computers, buildings and
food?
10. Issues addressed by the procurement strategy (delivering objectives, co-
operation, SMEs, training)
444 J. Thomson & T. Jackson

11. Has the organisation committed to green procurement schemes/organisations?

12. What are the main documents shaping green procurement policy?
13. Measuring the performance of procurement decisions (level, contractors,
performance measures, cross-cutting impacts)
14. What sort of information is used to inform green procurement decisions?
15. What are the obstacles to green procurement?
16. What sort of information could increase green procurement in your
organisation?
17. Can contributions to strategic goals influence procurement decisions?
18. Would the information laid out in Table 5 help persuade people to put green
procurement into action?
19. What else could encourage green procurement?
20. How much is spent on electricity, personal computers, buildings and food?