In 2020, public procurements amounted to a value of almost SEK 900 billion. Can procurement be a fast track to switching to a circular economy, and what do the manufacturers think? Eva-Lotta Löwstedt Lundell, CEO of Adda, believes that it will be more important to ask why we buy, not just what.
– “Work with sustainability and circularity means that we will be able to have completely different and long-awaited control over what we buy in the public sector, from whom and how it affects the environment and people. The demands on everyone that directly or indirectly delivers to the public sector will increase. Public sector stakeholders will conduct risk analyses, increase control of subcontractors, and demand a completely different type of control than today of the entire supply chain. The requirements we set based on the Global Compact principles alone mean that suppliers must keep track of their entire subcontracting chain to show that they live up to the set requirements. In addition, with new technology, such as blockchain technology, control can often be carried out easily and cost-effectively.”
This is explained by Eva-Lotta Löwstedt Lundell. She has been active in the debate on public procurement for many years, has written a book on the subject and is now the CEO of Adda, a company within the Swedish Association of Local Authorities and Regions that supports the public sector with, among other things, procurements and framework agreements.
SEK 900 billion
Public procurement accounts for 18 percent of Sweden's GDP, a nearly unimaginable SEK 900 billion a year. This entailss that procurement is of great importance for Sweden's climate impact. In 2019, public procurement accounted for 24 million tonnes of carbon dioxide, according to the National Agency for Public Procurement estimate. This is a quarter of the climate impact from all Swedish consumption.
– “This means that there is a large part of the solution here,” says Eva-Lotta Löwstedt Lundell. “With new requirements for sustainability in public procurement, this can change. But it is not the demands themselves that change the reality of the situation. They can put the spotlight on issues, but if it only leads to us continuing to buy the same products according to new requirements specifications, not much has been gained.
– “This is where circular thinking comes in. It's not just about what we buy, but also why. We need to think about whether we’re utilising our assets correctly, receiving the services we pay for, can ensure that the products live up to the requirements we set, and – above all – we need to change our buying patterns.”
From “how” to “if”
She takes up the example of furniture procurement. Perhaps the question is not how the next procurement should be made, but if it should be made at all. Maybe the furniture is already in the organisation? Is it possible to instead procure a service for enabling furniture to circulate in a better way? Or can we even design public premises in a way that reduces the need for new furniture?
– “It’s about understanding the value chains on several levels. How should we utilise resources in our operations in a climate-smart way? How do we reduce overall resource extraction from the environment? We’ve often been quite good at raising the bar and setting higher demands. But now it's about gaining a completely different overview of everything we consume and, of course, making sure that the suppliers live up to the requirements we set.”
Even small municipalities with only limited procurement capabilities should be able to set the right requirements, obtain data to check the requirements and keep track of their procurements
Dependent on the business community
Eva-Lotta Löwstedt Lundell emphasises the considerable importance of the business community for the public sector being able to carry out its societal mission. Each social service is based on a connection with companies that deliver the products the mission requires.
– “We haven’t yet completed the map for understanding which deliveries are absolutely crucial for us in fulfilling our mission. If the pandemic has taught us anything, it is that we have not sufficiently analysed risks and dependencies. We still don’t have that, and that needs to change! It requires that we work together. Not everyone can be at the forefront of everything, but through us and RISE – as well as through other forms of collaborations – the public sector can draw on one another’s experiences. Even small municipalities with only limited procurement capabilities should be able to set the right requirements, obtain data to check the requirements and keep track of their procurements. But of course, this requires collaboration.”
Eva-Lotta Löwstedt Lundell emphasises that a contracting organisation needs to know the market in which it is to procure.
– “You can’t just say that products are to be recycled if, for example, they don’t comply with the functional and quality requirements we have in our operations. The requirements must be possible for the market to live up to, and they must be able to be scaled up so that we attain long-term functioning business models. At the same time, we have to use procurement to drive market change. Many need to change how they utilise resources and business models. Some will cope with this transformation quickly, others will not cope with it at all. Those who cannot respond to the needs and requirements will have to make room for new players.”
