Crucial Areas for Sustainability of Public Procurement

Sustainability of public procurement refers to the purchasing process of the public sector organization that minimizes the impact to the environment. In Singapore, the established regulatory framework is written to meet climate goals while maintaining a healthy and competitive business environment. Sustainable public procurement promotes environmental responsibility, waste reduction, pollution, and carbon emissions to support a circular economy and more efficient resource use. Economic factors like cost, policy incentives, market demand, and supplier relationships influence sustainability initiatives. Social factors include community development and social equity, ensuring fair wages and safe working conditions. Effective sustainability requires stakeholder engagement, training, and continuous monitoring to meet sustainability goals and align with community priorities.

Regulatory Framework to Drive Sustainability

Singapore’s regulatory framework has been established and is designed to meet national climate goals while maintaining a competitive business environment. The framework includes the implementation of a carbon tax, targeted carbon emissions, and mandated reporting of annual sustainability reports. It also supports businesses to transition towards sustainability. The implementation of a carbon tax is intended to help incentivize businesses invest in green technologies while reducing their carbon impact. Carbon emissions is targeted to peak by 2030 and then reduce to below 60 MtCO2. The aim is to hit net zero carbon emissions by the year 2050. Solar energy deployment is targeted to reach at least 2 GWp by 2030, while 80% of new developments are required to be super low energy from 2030. The Singapore Exchange mandated that all listed companies include the greenhouse gas emissions numbers in their annual sustainability report. Initiatives like the Singapore Sustainable Finance Association have been launched to support businesses. The initiative promotes responsible investment practices while enhancing the integrity of sustainable finance offerings.

Impact on the Environment

Sustainable procurement in the public sector should promote responsible practices that prioritize environmental considerations. The key impacts are a reduction of waste, pollution, and carbon emissions through the procurement of goods and services that are environmentally friendly. These require less emission of greenhouse gases during production. The Singapore government leads this through the Greenplan advisory for businesses on what can be done. This includes adopting environmentally friendly habits, integrating sustainability, and embracing green opportunities. The advisory from the government also promotes a green economy by targeting environmental sustainability considerations in all government procurement. This is in line with the circular economy by emphasizing the lifecycle impact of products. The conservation of natural resources minimizes the environmental impact of raw material extraction and processing. Suppliers are thus incentivized to develop greener products and practices as demand for sustainable products goes up. Ecolabels are used with these products to ensure consumers are aware that these products meet specific environmental criteria. Sustainability through the Singapore Government Greenplan leads to more efficient resource use, requiring less wastage of raw material, power, and water to produce a product. This results in reducing the environmental footprint of public spending. The less toxic and more environmentally friendly goods produced, sustainability improves the environment around us, which will benefit public health.

Influence from Economic Factors

Sustainable initiatives on public procurement can be greatly influenced by economic factors such as cost consideration, policy framework, market demand, supplier relationship, and economic conditions. Cost consideration is a barrier to sustainable procurement because of the perception that environmentally friendly products are more expensive. Organizations may hold back their investments in sustainable solutions because of the upfront costs. Financial incentives of grants or subsidies from the government policy framework encourage the implementation of sustainable procurement practices. These incentives help to offset the initial costs of setting up sustainable products and services. One such example is the Green Technology Financing Scheme by the Malaysia Ministry of Finance. The scheme offers a rebate of 2% of profit to accelerate green investments. It also provides easier access to funding from participating financial institutions. Market demand is the consumer demand for sustainable products. This drives companies to enhance their position in the market with sustainable offerings. However, if the cost is too high, market demand might drop as consumers do not see the value outweighing the cost. Supplier relationship is another economic factor where the ability to collaborate with suppliers offering sustainable products leads to better pricing, solutions, and service delivery.