During last year’s World Summit on Sustainable Development (WSSD), a historic greening initiative was taking place far from the public eye.
Behind the scenes, the Johannesburg World Summit Company’s tender committee was testing a novel idea to shape the way in which both purchasers and merchants think of their goods and services.
This Greening the WSSD initiative was the first time an attempt was made to ensure that a United Nations summit was run according to best environmental practice. The initiative was a joint effort of the Gauteng department of agriculture, conservation and environment, the United Nations Development Programme, the Global Environment Fund and IUCN – The World Conservation Union.
Greening the WSSD provided South Africa with the opportunity to test a model of intervention within a developing country context, bringing into the ambit of decision-making broader sustainable development criteria that would most likely have been given short shrift if a similar initiative was attempted in a developed country.
This was an opportunity to test a holistic approach. But, as with all large-scale experiments, there were both successes and failures.
One aspect of ensuring that the WSSD was green involved shaping the procurement policies of the Johannesburg World Summit Company. Procurement constituted a large component of the company’s activities. As far as was feasible, sustainable criteria and policies were introduced into tendering procedures and requirements. An environmentalist sat on all the evaluation panels, assessing the true nature of the tenderers’ environmental policies.
Environmental best practice was added as a weighting criteria to the scoring matrix. In general, tender applicants were aware of the importance of their environmental accountability from the onset of a tender.
In the procurement process there was an opportunity to exercise leverage and thereby establish positive impact. Procurement activities are a good strategic tool if one wants to shift behaviour and introduce new practices.
Companies were encouraged to ‘clean up” and act more responsibly in their waste management practices, as well as their packaging and hazardous material use and storage. They were encouraged to begin developing environmental policies as part of their business profiles and to take an active role in training their staff on environmental issues.
There was an immediate response from a number of corporations and small businesses. Within days of their dealings with the evalu- ation panels, they consulted waste management companies and developed proper plans.
Nearly all companies that won tenders had to commit to developing an environmental policy. This marked a shift away from the supply mode response that is normally the mainstay of greening initiatives towards a focus on demand — the purchasers of goods and services demanding the accommodation of environmental criteria. When purchasers demand a new standard, merchants usually respond.
Greening the WSSD’s procurement interventions were seen as a pilot, as they were guided by a larger vision to determine how the lessons from the summit could be incorporated as part of an overall government strategy.
Green procurement interventions were viewed as one of the key legacies of the summit. These ideas are now being interwoven in the Department of Environmental Affairs and Tourism’s attempts to establish a recyclable plastics procurement strategy.
A pilot is been investigated with the Gauteng provincial government to target the largest purchasing orders currently in the government — paper and medical goods.
The Greening the WSSD team is also reviewing current government procurement policies in respect to their user-friendliness in incorporating green purchasing objectives. A legislative review will establish to what extent green procurement criteria are feasible, and whether new policies and legislation are required.
Green procurement should not be viewed in isolation. The European Union has succeeded in placing the introduction of environmental standards on the agenda of the World Trade Organisation.
The motivation behind these moves is not entirely altruistic. Consumer preferences for environmentally friendly goods are driving new and better technologies in Europe. In turn, green goods and services are providing new market opportunities for the industry and service sectors.
There is a broad attempt within the World Trade Organisation to liberalise the market for environmental goods and services, which are currently subject to tariffs of between 10% and 30% more than non-green products. Liberalisation will bring about a lowering of tariffs and significantly reduce the price difference between green and non-green products, increasing consumer choice.
Global expenditure on the environment is estimated to be about $525-billion a year, and is expected to exceed $600-billion by 2005.
Complementing this growth is a raft of new recyclable materials and goods that are available to consumers. If one includes organic farming, then the growth potential jumps dramatically.
Organic farming is already the fastest-growing sector in agriculture, driven largely by market forces and encouraging signs of incentive-based policies within certain EU member states that want to capture a chunk of this new market. The global market for organic foods is estimated to be worth about $17,5-billion a year and is growing at an annual rate of 30%.
Interestingly, another trend to watch is the growth of managed funds that include social screens, including the environment. These funds have increased from $1,49-trillion in 1999 to more than $2-trillion in 2001, demonstrating the strength of socially responsible investing.
The largest spend on the environment occurs in the areas of waste management, water treatment works, water equipment and air pollution abatement equipment.
Markets for environmental goods and services are driven by regulation, policies and consumer preferences. In Europe economic surveys demonstrate that consumers who want to enjoy a better quality of life are willing to spend more on health and environmental services than anywhere else in the world.
South Africa is on the cusp of being able to introduce some enlightened policies and strategies, at least at government procurement level. These could be designed in a manner to stimulate local recycling and green industries.
They could also strategically respond to a growing market in areas where there is a comparative advantage, for example, organic farming. Already the use of integrated pest management in the South African citrus industry is paying dividends, even though the primary motivation for a shift away from pesticides is based on health standards set in Europe, rather than out of concern for the environment.
As the Greening the WSSD experience demonstrates, procurement can be a fantastic opportunity to shift purchasing behaviour and influence industries towards more sustainable alternatives, at the same time introducing economic and social benefits.