UN report shows how public procurement is a powerful tool for sustainable development

While COVID-19 threatens to reverse the decade-long progress on the fight against poverty, the pandemic sharply focuses the world’s attention on health concerns, including human health, environmental health and planetary health. In this respect, Voluntary Sustainability Standards (VSS) have been recognised as potentially transformative tools for governments and businesses to realise their sustainability commitments. The 4th Flagship of the United Nations Forum on Sustainability Standards responds directly to UN Secretary-General Antonio Guterres call for climate-related and human rights actions to shape the recovery from COVID-19 and help developing countries achieve the SDGs.

This report thus, analyses how VSS are (and can be) integrated into Sustainable Public Procurement (SPP) and trade policy respectively. The concept of Sustainable Public Procurement (SPP) is used to refer to social- and environmental-friendly public procurement policies. The research explores some of the arguments for and against such integration. Three main research questions were addressed.

  • What are the determinants of VSS adoption at country level?
  • How can public procurement and trade policy serve to increase VSS uptake, and how do they contribute to the effectiveness of VSS?
  • What are the key considerations and implications of VSS integration into SPP and trade policy?

Public procurement represents, on average, 12 % of GDP in the OECD countries, and up to 30 % of GDP in developing countries. The magnitude of government spending highlights the potential of public procurement as a driver of VSS uptake and its power to nudge markets towards higher standards of sustainability. The structural demand for sustainably produced products from the government can enhance the competitiveness of sustainable products, further boosting the business case for VSS. This prompts the private sector to further embrace socio- and eco-minded products and services, especially after being exposed to, for a few years now, a systematic increase of “sustainable” policies that shape business and consumer’s behaviour.

The report begins with key global trends in VSS adoption and dives into country-level adoption rankings and factors, which include consumer demand, business demand, as well as government demand for VSS. Chapter 2 explores the role of public procurement in increasing VSS uptake, given the large share of government spending of a country’s GDP. It is here where the concept of SPP is introduced and country case-studies are featured. Building on the 3rd Flagship study on the relationship between VSS and global trade issues, chapter 3 explored further how VSS can be integrated into trade policy instruments, such as free trade agreements (FTAs), preferential trade agreements (PTAs), market access, export promotion. Lastly, some key considerations for further integrating VSS in SPP and trade policy are discussed. These include capacity issues within VSS systems, the possible increase in the number of VSS, the implications for recognition systems, the risk of over-certification, and possible distributional effects.

Download the report (pdf)

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