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Sustainable Procurement: The Active Role of the State in Building a Sustainable and Inclusive Economic Growth

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State and Enterprise

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Abstract

International and national instruments now push the public sector to follow ‘sustainable procurement’ to promote virtuous business models. Both public and private sectors are thus encouraged to increasingly adopt sustainable business strategies and practices, addressing social, environmental and innovation concerns along with the economic dimension. This study investigates the lever for extending social, environmental and innovative sustainability down through the entire supply chain, advancing the business paradigm.

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Notes

  1. 1.

    UNGA (October 21, 2015) Transforming our world: the 2030 Agenda for Sustainable Development, A/RES/70/1.

  2. 2.

    See, on the ‘triple bottom line’ approach (TBL or 3P on people, planet and profit): Elkington (1997); Fisk (2010); Slaper and Hall (2011) pp. 4–8.

  3. 3.

    Green et al. (1996), pp. 188–197; McCue and Gianakis (2001), pp. 71–95; Zsidisin and Sifred (2001), pp. 1–73, 69; Fox et al. (2002); Coggburn (2004), pp. 236–258; McCrudden (2004), pp. 257–267; Whitfield and Landeros (2006), pp. 16–28; Adobor and McMullen (2007), pp. 219–229; Albareda et al. (2007), pp. 391–407; Worthington et al. (2008), pp. 319–331; Preuss (2009), pp. 213–223; Large and Thomsen (2011), pp. 177–184; Brammer and Walker (2011), pp. 452–476; Walker et al. (August, 2012), pp. 3556–3582; Miemczyk et al. (2012), pp. 201–206; Snider et al. (2013), pp. 63–72; Furneaux and Barraket (2014), pp. 269–272; Sjåfell and Wiesbrock (2017), p. 17; Sjåfjell (2018) p. 30; Blažo et al. (2019), pp. 239–265; Zipperer (2019); Andhov and Caranta (2020); Džupka et al. (2020), pp. 9241–9254. Dagbanja (2020), pp. 65–92; Ventura (2020a), pp. 243–282.

  4. 4.

    On United Nations, see UNGA (October 21, 2015) A/RES/70/1; UNGA (July 27, 2015) Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa Action Agenda), A/RES/69/313; Paris Agreement under the United Nations Framework Convention on Climate Change adopted on December 12, 2015, in force since November 4, 2016; Accenture, Havas Media RE:PURPOSE (2014) The Consumer Study: From Marketing to Mattering, The UN Global Compact-Accenture CEO Study on Sustainability. Available via https://webcache.googleusercontent.com/search?q=cache:2tvcvHIRST4J:https://sustainability.glos.ac.uk/wp-content/uploads/2017/07/Accenture-Consumer-Study-Marketing-Mattering-2.pdf+&cd=1&hl=it&ct=clnk&gl=it&client=firefox-b-d; UN Environment (2017) Factsheets on Sustainable Public Procurement in National Government – Supplement to the 2017 Global Review of Sustainable Public Procurement. Within the World Bank context see, World Bank (2015) A Measured Approach to Ending Poverty and Boosting Shared Prosperity: Concepts, Data, and the Twin Goals. Policy Research Report, World Bank, Washington DC; World Bank (November 2016) Sustainable Procurement – An introduction for practitioners to sustainable procurement. In: World Bank IPF projects; World Bank (2018) Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle. World Bank, Washington DC; World Bank (2020) Poverty and Shared Prosperity 2020: Reversals of Fortune. World Bank, Washington DC. Concerning the OECD, see OECD (2002) Recommendation of the Council on Improving the Environmental Performance of Public Procurement, OECD/LEGAL/0311 (adopted on 23 January 2002 on the Environment Policy Committee’s proposal); OECD (2013) Putting Green Growth at the Heart of Development, OECD Green Growth Studies, OECD Publishing; OECD (2015) Recommendation of the Council on Public Procurement; OECD (2015) Government at a Glance 2015; OECD (2016b) Preventing Corruption in Public Procurement; OECD (2019) Size of public procurement. In: Government at a Glance 2019. As for the WTO, see the WTO Agreement on Government Procurement of 1994, recently revised and amended in 2012.

  5. 5.

    Andhov (2021), p. 105.

  6. 6.

    European case law on public procurement. Available via DIALOG. https://ec.europa.eu/environment/gpp/case_law_en.htm.

  7. 7.

    Directive 2004/17/EC of the European Parliament and of the Council of March 31, 2004 “coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors”; Directive 2004/18/EC of the European Parliament and of the Council of March 31, 2004 “on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.”

  8. 8.

    Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 “on the award of concession contracts”; Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 “on public procurement and repealing Directive 2004/18/EC”; Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 “on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC.”

  9. 9.

    Green Paper on Public Procurement in The European Union: Exploring The Way Forward (COM/1996/0583); Communication from the Commission “on Public procurement in the European Union” (COM/98/0143); Interpretative Communication of the Commission “on The Community law applicable to public procurement and the possibilities for integrating social considerations into public procurement” (COM/2001/0566); Interpretative Communication of the Commission “on The Community law applicable to public procurement and the possibilities for integrating environmental considerations into public procurement” (COM/2001/274); Communication from the Commission on “Integrated Product Policy – Building on Environmental Life-Cycle Thinking” (COM/2003/302); Commission Communication “on Pre-commercial Procurement: Driving innovation to ensure sustainable high quality public services in Europe” (COM/2007/799); European Commission, DG ENV (April 2016) Buying green! A handbook on green public procurement, 3rd ed. (1st ed. 2004). Available via DIALOG. http://ec.europa.eu/environment/gpp/buying_handbook_en.htm; Communication of the Commission “on Public procurement for a better environment” (COM/2008/400); European Commission (2011) Buying Social. A Guide to Taking Account of Social Considerations in Public Procurement. Available via DIALOG. https://op.europa.eu/en/publication-detail/-/publication/cb70c481-0e29-4040-9be2-c408cddf081f; Communication from the Commission “on Making Public Procurement work in and for Europe” (COM/2017/0572); European Commission (2017) Public Procurement for a Circular Economy. Good Practice and Guidance. Available via DIALOG. https://ec.europa.eu/environment/gpp/pdf/cp_european_commission_brochure_en.pdf; European Commission (February 2018) Public Procurement Guidance for Practitioners “on avoiding the most common errors in projects funded by the European Structural and Investment Funds.” Available via DIALOG. https://ec.europa.eu/regional_policy/en/information/publications/guidelines/2018/public-procurement-guidance-for-practitioners-2018.

  10. 10.

    UN Environment (2017) Factsheets on Sustainable Public Procurement in National Government – Supplement to the 2017 Global Review of Sustainable Public Procurement.

  11. 11.

    Italian Code of Public Contracts, Legislative Decree No. 50/2016.

  12. 12.

    Commonwealth of Australia (amended on April 20, 2019) Commonwealth Procurement Rules (CPRs) – Achieving value for money, in compliance with the 2018 ‘Government Procurement (Judicial Review) Act’. See Andrecka (2015), p. 386.

  13. 13.

    Commonwealth of Australia (1st ed. 2013, revised in 2018) Sustainable Procurement Guide, in compliance with the 2018 ‘National Waste Policy’.

  14. 14.

    Victoria State Government (2018) Victoria’s social procurement framework. Available via DIALOG. https://www.procurement.vic.gov.au/SPF.

  15. 15.

    Zhu and Sarkis (2004), pp. 265–289; Jayaraman et al. (2007), p. 1071–1074; Seuring and Müller (2008), p. 1700; Baden et al. (2011), pp. 259–277; Beske and Seuring (2014), pp. 322–331; Appolloni et al. (2014), pp. 122–133; Betiol et al. (2015), p. 71; Whelan and Kronthal-Sacco (June 19, 2019); Ventura (2020b), pp. 583–623.

  16. 16.

    See, the Benefit Corporation, introduced in the United States; the Benefit Company introduced in British Columbia (Canada); the Community Interest Company (CIC) introduced in the United Kingdom; the Italian Società Benefit (SB); the French Entreprise à Mission; the Sociedades de Beneficio e Interés Colectivo (BICs) introduced in Colombia, Ecuador and Perú.

  17. 17.

    See, the 2010 Apple – Foxconn scandal. On the issue, Eccles et al. (2013). See also the 2013 Rana Plaza collapse in Bangladesh. On the issue, Labowitz and Baumann-Pauly (April, 2014).

  18. 18.

    BlackRock Investment Institute (February 2019) Sustainability: The future of investing. Available via DIALOG. https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/sustainability-the-future-of-investing.

  19. 19.

    State of California (2010) Transparency in Supply Chains Act. Cal. Civ. Code, § 1714.43 [CTSCA, S.B. 657].

  20. 20.

    United Kingdom (2015) Modern Slavery Act (2015 c. 30).

  21. 21.

    New Zealand is considering the introduction of a specific legislation requiring businesses to report publicly on transparency in supply chains. See New Zealand – Ministry of Business, Innovation & Employment (September 2020) Combatting Modern Forms of Slavery – Draft Plan of Action against Forced Labour, People Trafficking and Slavery 2020-25, 11–13. Available via DIALOG. https://www.mbie.govt.nz/dmsdocument/11888-draft-plan-of-action-against-forced-labour-people-trafficking-and-slavery. Hong Kong is working on the ‘Draft Modern Slavery Bill’ since 2017, which has been finalised in March 2019 as the ‘Crimes (Amendment) (Modern Slavery) Bill 2019’.

  22. 22.

    Commonwealth of Australia (2018) Modern Slavery Act 2018 (No. 153, 2018).

  23. 23.

    French Republic (March 27, 2017) Law No. 2017-399. The law introduced Articles L. 225-102-4 and L. 225-102-5 into the French Commercial Code.

  24. 24.

    The law applies to companies employing, by the end of two consecutive financial years, at least five thousand employees in France, or ten thousand employees worldwide, through their direct or indirect subsidiaries.

  25. 25.

    See, the Swiss popular initiative on Responsible Business (lead by the Swiss Coalition for Corporate Justice) providing for mandatory due diligence, and the parliamentary counter-proposal final bill of June 2020 expected to enter into force during 2021 (updates Available via DIALOG. http://www.bhrinlaw.org/key-developments/64-switzerland). On the Italian system, in 2013 ‘The Foundations of the Italian Action Plan on UN Guiding Principles on Business and Human Rights’ (UNPGs) was presented to the European Commission, while in 2016 the ‘National Action Plan on Business and Human Rights 2016-2021’ was enacted to ensure the integration and implementation of the UNGPs within national policy and strategy. Particularly, according to the Plan, a comprehensive assessment and review of the existing commercial and civil law to evaluate legislative reform introducing provisions such as the ‘duty of care’ or due diligence for companies is still in progress.

  26. 26.

    Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937, of 23 February 2022, COM(2022) 71, 2022/0051 (COD).

  27. 27.

    European Commission, DG for Justice and Consumers (February 2020) Study on due diligence requirements through the supply chain. Final Report, 250-260. See also European Commission, DG for Justice and Consumers (July 2020) Study on directors’ duties and sustainable corporate governance. Final Report.

  28. 28.

    UN Office of the High Commissioner for Human Rights (2011) Guiding Principles on Business and Human Rights: Implementing the ‘Protect, Respect and Remedy’ Framework (UNGPs), HR/PUB/11/04. See in particular Part II dedicated to ‘The Corporate Responsibility to Respect Human Rights’.

  29. 29.

    See European Commission (COM/2011/0681) Communication – A renewed EU strategy 2011-14 for Corporate Social Responsibility, containing a strong commitment to implement the UNGPs in the EU; and the ‘Shadow EU Action Plan on the Implementation of the UN Guiding Principles on Business and Human Rights within the EU’ launched by the European Parliament Working Group on Responsible Business Conduct (RBC Group) on March 19, 2019.

  30. 30.

    OECD (2011) OECD Guidelines for Multinational Enterprises, OECD Publishing.

  31. 31.

    OECD (2017) OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. Available via DIALOG. https://www.oecd-ilibrary.org/governance/oecd-due-diligence-guidance-for-responsible-supply-chains-in-the-garment-and-footwear-sector_9789264290587-en.

  32. 32.

    OECD (2016a) OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris.

  33. 33.

    ILO (June 1998) ILO Declaration on Fundamental Principles and Rights at Work, International Labour Conference, 86th Session, Geneva.

  34. 34.

    ILO (June 2016) ILO Resolution concerning decent work in global supply chains.

  35. 35.

    ILO (November 1977, as amended in November 2000, March 2006, and March 2017) ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.

  36. 36.

    UN Global Compact Office (2014) A Guide to Traceability. A Practical Approach to Advance Sustainability in Global Supply Chains. Available via DIALOG. https://www.unglobalcompact.org/library/791.

  37. 37.

    UN Global Compact Office (2015) Supply Chain Sustainability: A Practical Guide for Continuous Improvement. Second Edition. Available via DIALOG. https://www.unglobalcompact.org/library/205.

  38. 38.

    In this regard, it is worth mentioning, among others, initiatives promoted by the Fair Labor Association, the Ceres Business for Innovative Climate and Energy Policy, and the Ethical Trading Initiative.

  39. 39.

    UNGA (December 10, 1948) Resolution 217 A. Universal Declaration of Human Rights.

  40. 40.

    Companies can assess their suppliers through different procedures: self-assessment procedures, on-site audit and independent third-party audit (including unannounced audits), e.g., through SAI Certified Compliance Auditors, EcoVadis Audit or other specific auditors and audit mechanisms available on the market.

  41. 41.

    EMAS was developed in 1993 by the European Commission for companies and other organisations to evaluate voluntary, report, and improve their environmental performance. To register with EMAS, organisations must meet the requirements of the Regulation (EC) No 1221/2009 of November 25, 2009 (as amended).

  42. 42.

    The EU Ecolabel, established in 1992 and governed by Regulation (EC) No 66/2010 of November 25, 2009 (as amended), is a voluntary label of environmental excellence awarded to products and services meeting high environmental standards throughout their life cycle.

  43. 43.

    Ferrarese (2000), p. 133.

  44. 44.

    On this issue, see Conte (2018), pp. 14–15 and 26–27; and Zoppini (2020), pp. 22–31 and pp. 56–57.

  45. 45.

    Development Centre of the Organisation for Economic Co-operation and Development (launched in 2015) The Human-Centred Business Model (HCBM). Available via DIALOG. http://www.oecd.org/dev/human-centred-business-model-hcbm.htm.

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Authors and Affiliations

  1. Department of Law, LUISS Guido Carli University, Rome, Italy

    Barbara De Donno & Livia Ventura

  2. ICC Italy, Rome, Italy

    Barbara De Donno

  3. University of Cambridge Institute for Sustainability Leadership, Cambridge, UK

    Livia Ventura

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  1. Barbara De Donno
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  2. Livia Ventura
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Correspondence to Barbara De Donno .

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  1. Law Department, University of Molise, Campobasso, Italy

    Maria Rosaria Mauro

  2. Law Department, University of Molise, Campobasso, Italy

    Federico Pernazza

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De Donno, B., Ventura, L. (2023). Sustainable Procurement: The Active Role of the State in Building a Sustainable and Inclusive Economic Growth. In: Mauro, M.R., Pernazza, F. (eds) State and Enterprise. Springer, Cham. https://doi.org/10.1007/978-3-031-10473-2_9

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