Indicators for Sustainable Public Procurement (SPP)

When one talks of indicators, the first that comes across our mind is, of course, Gross Domestic Products (GDP), which has charmed eyeballs of millions of people across the world. Its movement is tracked 24x7 and thousands are employed to measure its movement to the nearest second digit after decimal. Such is its stimulus that politicians, economists, corporates, bankers et al take pride in predicting it (and never forget to take credit for the same!). Though GDP remains on top of the list of indicators in people’s minds, its continued dominance is threatened in a resource-constrained and environmentally-challenged world we live in today. Its capacity to deliver on the claimed social and economic benefits trickling to society has increasingly been questioned in recent time.

With the evidences of limitation of economic growth measured in terms of GDP (someone called it Grossly Distorted Picture) becoming more and more apparent, the focus is gradually shifting to more broad based development that attaches equal weight to people and planet. The effective translation of sustainability goals into innovative policy processes still remains a matter of debate, even at experimentation stage, as new policy initiatives are hypothesized, tested and implemented across the world.   One such policy that promotes sustainable consumption and production pattern and simultaneously helps nations in achieving their developmental goal is Sustainable Public Procurement (SPP). It has significant potential for developing and poor nations, where more consumption of resources is predicted in future to meet developmental aspirations of their people.  This realization has led many developing nations such as China, Thailand and Indonesia in Asia; Chile, Brazil and Uruguay in South America; Tunisia, South Africa in Africa etc. to embrace SPP policy wholeheartedly. Many more countries from around the globe are seriously looking at this option and waiting to climb on the SPP bandwagon. Therefore, it has become quintessential to envision a dashboard of indicators not only to evaluate and communicate progress on the stated objectives of SPP policy but also to identify hotspots that need attention. 

An indicator can assist in actual assessment, management and monitoring of impacts of SPP policy on sustainability goals, as well as in reporting the actual performance of decentralized units within a nation. Further, lack of indicators on sustainable procurement could be a major problem, hindering efforts in assimilating sustainability initiatives within a nation. Therefore, developing an evidence-based approach for monitoring effectiveness/performance of sustainable public procurement is considered essential to make sure that the sustainability objectives are being achieved.

Many countries and organizations have already made attempts to develop indicators on SPP and many others are in the process of refining already developed indicators based on past experiences. In a recently concluded workshop on “Indicators for Resource Efficient Green Asia”, organized by UNEP in Beijing in September 2013, policy makers, practitioner, and researchers had gathered to discuss development of indicators to measure progress on Sustainable Consumption & Production (SCP) policy adopted by countries in this region. The discussion focused on finding that elusive indicator that embodies the characteristics, simplicity and robustness of GDP and at the same time measures the tangible and intangible impacts of SCP policy. The workshop brought forth more than ten headline indicators. Though the final decision on these indicators will be taken later by technical committee of Asia-Pacific Roundtable on SCP, ten is a fairly large number to begin with. I am sure as the concept of SCP itself matures over a period of time, we will have indicators on SCP that will match the features of GDP as indicator.

Take the case of tenders. The related indicator on SPP developed till now has focused on measuring percentage of green tenders in terms of numbers and value out of total numbers/value of tenders in measurement period.  While some countries have focused on tender the others have focused on finalized contracts. This is an important and very fine differentiation that needs to be debated. Actually, it really depends on what do we want to measure – intent or outcome? When we integrate environmental criteria in tenders, it shows our intent of buying greener and resource efficient products and services. But unless the tenders materializes into contracts, which happens many times, it will not give us the desired outcome. Also, sometime a tender may contain several products and green criteria may apply only to some of them. In such situation, if indicator is based on number of tenders, it is likely to throw us inflated level of SPP penetration. On the flip side, an indicator based on tenders also has some advantages. The main advantage of monitoring tenders is that they can be tracked more easily than contracts, as all the information is found in the tender itself and does not require data input from different people or from suppliers.

Another issue, which is equally important for developing indicator, is need to track and/or gather information from different data sources to measure level of SPP. Survey, as a data source, has several disadvantages such as the fact that they are time consuming, have poor response rate and so on But they can raise awareness about SPP program among stakeholders. However, if data is centrally available, which is now possible through central e-procurement system, it is very easy to track information in much more reliable and faster way.

As many countries strive to develop their own indicator on SPP, it is time we focus on having a common indicator on SPP. Ultimately, having a common indicator on SPP for a country or region will depend on how much coherence exists in policy objectives pursued by different entities within a country and region. Therefore, in order to have common indicator, the primary objective of a region shall be to first develop coherent policy across nations in region. This is not a small task, but I can see some positive movement in ASEAN countries, who recently agreed to pursue common SCP objectives. EU nations already have common guidelines on GPP. These developments have kept my hopes alive for having a global indicator on SPP!