The Ripple Effect. World Bank’s Sustainable Procurement for People and Planet

What we choose to buy today can build or break the world of tomorrow. Unsustainable choices bolster industries that harm the environment and society, whereas sustainable procurement strengthens those committed to better practices, fostering a healthier planet and more equitable communities. In 2022, the global public 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 adopt 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".

Global Shift Towards Green Procurement

Many governments are increasingly focusing on green or sustainable public procurement. Although policy objectives may vary, sustainable procurement can help countries develop greener transport systems, housing developments, and climate-resilient infrastructure, that are manufactured in a way that minimizes environmental harm.

Success Stories of Bank-Financed Projects

World Bank-supported projects using sustainable procurement approaches have delivered significant benefits, including support for small and minority-owned businesses, reducing emissions with innovative technology, and fostering green industries:

· Battery Energy Storage Systems in South Africa. In financing Battery Energy Storage Systems to support South Africa's transition to renewable energy, it was imperative to develop local capacity to operate and maintain the project over its 20-year horizon. Evaluation criteria were developed to target historically disadvantaged groups. The result was that out of a $237 million contract value of the first six sites of the program, about one fifth ($47.4 million) was awarded to small and medium businesses from these groups. The project is on-going, 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 Bus Rapid Transit Project. This project required bidders to adhere to strict international emissions standards, prompting many to propose e-buses. This transition from diesel buses is expected to prevent 1.2 million tons of GHG emissions over 30 years.

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

Tools and Resources for Sustainable Procurement

"Countries around the world are increasingly recognizing the importance of sustainable public procurement," notes Hiba Tahboub, Chief Procurement Officer at the World Bank. "To support this shift, the World Bank has developed a range of resources to help countries enhance their procurement skills and achieve their sustainability goals through effective practices."

Our clients are keen to enhance their sustainable procurement practices, and we have actively responded to this demand. For instance, a recent five-day training program in West Africa equipped participants with invaluable knowledge and skills. These resources will help countries to implement sustainable procurement in Bank-financed projects, thereby improving their understanding and abilities.

The tools and resources provided by the Bank include:

· Guidance Documents: Four detailed guidance documents offer options for identifying and mitigating environmental and social risks through procurement. They provide practical advice on implementing sustainable procurement within development projects. This guidance helps countries meet high environmental and social standards while achieving their own economic objectives such as job creation and support for minority and women-owned businesses.

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

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

· Optional Contract Clauses: Borrowers can integrate these clauses into national bidding documents to mitigate environmental and social risks as required.

These resources demonstrate the Bank's commitment to helping countries leverage their investments to achieve sustainability goals, prevent social and environmental harm, and support their broader development objectives. By equipping countries with practical guidance, the World Bank strives to foster enduring positive impacts through sustainable procurement practices.

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