Focus Topic: Environmental Sustainability in Procurement (Working Draft)

Top 5 Strategy Recommendations

1

Online knowledge exchange and training platform on sustainability and circular economy in construction.

2

A joint position in support of mediating the impact of CO2 emission through public procurement and carbon border adjustment mechanism.

3

An International Sustainability Index evaluates companies on their sustainability performance,  including supply chain, workers rights, direct emissions.

4

A guidebook on sustainable criteria and their implementation for the construction sector considering the regional specificities.

5

EU wide online platform for project based stakeholder consultations and information sharing between public procurement authorities.

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Executive Summary 

ChallengesSolutions

Lack of support for the implementation of sustainability criteria:

  • Insufficient emphasis on sustainability criterias in the national legislation.
  • Lack of general awareness regarding sustainability in construction and  the construction supply chain (e.g. cement, lime and steel).
  • Not enough support for the implementation of environmentally sustainable construction solutions (e.g. energy efficient buildings and the reduction of CO2 along the supply chain).
  • Lack of community and stakeholder engagement in the planning phase of public construction and infrastructure projects.

Encourage public discussions and establish regional partnerships to promote the importance of environmental criteria for public procurement:

  • Form an alliance of all relevant stakeholders (local and EU) to support legislative changes to implement existing best practices.
  • Deliver benchmark studies through local partnerships (research centers and companies) and promote best practices through media and public communication campaigns.
  • Promote a list of “Top 5 measures” to improve sustainability in public procurement.
  • Financial subsidies for clean energy investments and R&D projects.
  • Online platform to conduct stakeholder engagement in the planning phase.
  • Online platform to exchange best practices and experience between procurement officials. 

Not enough circular economy practices in construction:

  • Public procurement often does not consider circular economy practices that could be implemented for the construction sector, including the related supply chain.
  • In some cases there is a lack of legal and technical framework for the implementation of waste management solutions for construction (e.g. reuse/recycle of bitumen or concrete).
  • Lack of evaluation of additional environmental aspects such as noise management plans, track record or ISO certification in the project planning phase.

Support implementation of more circular economy measures through public procurement:

  • Online platform to offer training programs for local authorities on circular economy practices.
  • Guidebook and policy proposal for circular economy application in construction.
  • Include all relevant circular economy criterias in the pre-qualification (if possible in the planning) phase.

Lack of  emphasis on sustainable financing:

  • Lack of European wide accepted standards to evaluate companies and their suppliers’ performance on sustainability criterias.
  • Lack of an online platform to get your company evaluated on the sustainability performance. Companies are confronted with the need to have such an evaluation when applying for financing, however there is no universal tool to deliver it. 

Sustainability index for financing:

  • Develop European Standards for investors, banks, funds and public procurement officers to rank construction companies on sustainability criterias.
  • Develop an online platform to evaluate companies on the European market level of their sustainability (e.g. by analyzing  projects, materials, working conditions).
  • Support the implementation of this index as an additional criteria for public and private financing.

Lack of framework to measure the environmental impact along the supply chain:

  • No border adjustment mechanisms for CO2 and other environmental related costs.
  • No legal guideline on how to share data and interpret it (e.g. carbon footprint for construction).
  • Over-reliance on CAPEX and neglect of TOTEX.
  • Difficulties in measuring sustainability criteria.

Support an European solution to measure environmental footprint for imported materials:

  • Introduction of a CO2 carbon tax/border adjustment mechanism for imports.
  • Requirement of a mandatory European environmental audit for construction materials imported from third countries.
  • Development of an evaluation/measurement framework for the environmental footprint of construction materials.

Sustainability aspects are not considered in public procurement process:

  • Best price is preferred because it is perceived as more transparent and “safe” to use. 
  • Lack of experience and training in how to implement sustainability criteria.
  • Not enough knowledge on BIM (Building Information Modelling) and implementation of more DBO (Design, Build and Operate) projects.

Support necessary training and informational background to support implementation of sustainability criterias:

  • Implement sustainability criterias in the pre-qualification round (if not possible as awarding criteria).
  • Build an online training platform for knowledge exchange webinars on how to implement sustainability criteria in procurement and engage local authorities with it.
  • Develop and implement a training course on BIM to be integrated in the procurement webinars.

Lack of support for sustainability criteria.

ChallengeSolutionsActors Implementation 
  • In many countries national legislation is not supportive enough of the implementation of environmental criterias. 
  • Even though the EU Directive 2014/24/EU allows to use sustainability indicators as tender criteria, member states can also decide to rely on the Best Price procedure only.
  • Local, national and EU policy-makers should push for the implementation of environmental criteria as mandatory in the procurement process.
  • Rely on the “EU New Green Deal” as a policy platform to promote sustainable standards in construction. 
  • EU Parliament (Committee on Internal Market and Consumer Protection (IMCO) ENVI committee).
  • EU Commission (DG Grow, DG COMP, DG ENV).
  • National parliaments and governments.
  • Companies and environmental NGOs.
  • Form an alliance of local and regional actors that would support the changes and promote those through a media campaign.
  • Involve EU actors and local EU representations in supporting the initiative.
  • Lack of awareness among society and policy-makers.
  • Deliver benchmarks/case studies that evaluate the possible financial, technological and environmental impacts of a sustainable procurement process. 
  • Promote environmental sustainability in public discourse as a way to support the idea of sustainable procurement.
  • Conduct awareness campaigns towards construction companies, procurement agencies to promote the use of construction materials that have European CO2 certification and a reduced environmental footprint.
  • EU Commission (DG ENV, DG CLIMA).
  • Civil Society and environmental NGOs.
  • Universities and Research centers.
  • Media outlets.
  • Public officials.
  • Establish partnerships between companies and research centers/researchers to deliver benchmark studies.
  • Make a list of “Top 5 measures” to improve environmental sustainability through public procurement.
  • Organize a media campaign to present the importance of sustainable public procurement.
  • Not enough support for the construction of energy efficient buildings across the CEEC.
  • Not enough financial support for implementation of environmental sustainable construction solutions. 
  • Promote energy efficient building projects through public funding or policy incentives (e.g. energy passports for buildings).
  • Provide financial incentives for businesses for clean energy investments and R&D projects.
  • Support sustainable financing as a way to channel private investment to the transition to a climate-neutral economy, as a complement to public money.
  • ΕU Parliament.
  • EU Commission. National parliaments, governments, regional authorities.
  • Planning and design companies.
  • Architecture bureaus.
  • Check the existing legislation in place and make a list of top relevant changes or upgrades that can be implemented to improve the support for energy efficient buildings.
  • Implement a legal energy standard for new buildings.
  • Transpose best practices and existing legal framework for energy efficient buildings (e.g. energy passports) to local legislation if there is no clear support for energy efficient buildings.
  • Organize an information campaign with regard to available funding to promote energy efficiency in construction.
  • Lack of wide community and stakeholder engagement to decide upon the financial, environmental and social sustainability of a planned project.
  • Build an EU wide consultation online platform for stakeholder engagement in the planning process to be used by local procurement agencies. 
  • Procurement authorities.
  • European Commission.
  • Consulting engineers.
  • Trade Unions.
  • Business Associations.
  • Research centers.
  • NGOs.
  • Planning and design companies.
  • Build an online platform for stakeholder engagement to get the key stakeholders (e.g. consulting engineers, trade unions, business association, research centers, NGOs, authorities and wider public) and decide what sustainability criteria to include in the procurement process.

Circular economy in construction.

ChallengeSolutionsActors Implementation 
  • Circular economy offers good solutions for the construction industry (especially regarding waste management in the construction sector) but those are not considered by tendering authorities.
  • Construction related procurement often does not take into account environmental impact of construction material transportation or the availability of local resources.
  • Online platform for training, webinars and conferences on the relevance of circular economy in construction for local authorities and procurement bodies.
  • Implement a Green Points Model – giving additional points to a bidder for a foreseeable reduced environmental footprint through local sourcing.
  • Introduce environmental impact and labor costs on the supply chain as part of the campaign to promote localized (regional or European) consumption.
  • Support the implementation of local circular economy practices (such as Cascading or Reuse, Refurbish, Remanufacture, Urban Mining) in construction starting with the project planning phase.
  • Include circular economy related aspects as pre-qualification criteria (if possible awarding criterias).
  • ΕU Parliament.
  • EU Commission (DG Grow, DG COMP, DG ENV, DG ECFIN).
  • Ellen Macarthur Foundation, UNFCCC.
  • National governments.
  • Civil society and NGOs.
  • Working group of stakeholders to design curriculum and short courses for the use of local authorities and training institutions for all involved stakeholders (e.g.companies, procurement officers, planning bureaus).
  • Prepare a “practitioners guidebook” how to source locally – on mechanisms and available local resources for the construction projects.
  • Benchmark case study on the relevance of supply chain economics and its impact on local consumption, economy and environment. 
  • Prepare a “digital map of local resources”.
  • Engage local waste management companies in the construction logistic chain starting with the planning phase.
  • With research support, prepare a case study on how circular economy practices can be implemented in a specific context (e.g. in Slovenia) and what are the relevant actors to be involved. 
  • Create a public awareness regarding existing projects that are successful in recycling of construction materials.
  • No legal and technical framework for implementation of circular waste management solutions for construction.
  • Evaluate additional aspects such as noise management plan, company track record, ISO and others in the project planning phase.
  • Policy proposal for recycling and reuse standards/certifications in construction projects.
  • Guidebook for Circular Economy in Construction for public procurement authorities to also include waste and noise management plans. 
  • European Commission (DG Grow, DG COMP, DG ENV, DG EFIN).
  • Tendering authorities. 
  • National parliaments.
  • National governments. 
  • Construction industry stakeholders. 
  • Policy and guidebook proposal that transposes best practices regarding waste management and circular economy from more advanced systems (e.g. NL, DE, SE, AT) and adapts those to the local context.

Sustainable financing.

ChallengeSolutionsActors Implementation 
  • Lack of standardized tools to evaluate companies and their suppliers’ performance on sustainability criterias.
  • Companies are confronted with the need to have such an evaluation when applying for financing, however there is no universal tool to deliver it.

International Sustainability Index for financing:

  • Develop International Standards for investors, banks, funds and public procurement officers to rank construction companies on sustainability criterias (e.g. workers rights, CO2, past projects):
    • Rank companies on the level of their sustainability (e.g. by looking at projects, materials, working conditions).
    • Support the implementation of this index as an additional criteria for public and private financing.
  • Construction industry stakeholders.
  • Financial institutions. 
  • Organize a working group of companies and financial institutions to finalize the methodology for the index.
  • Deliver a first pilot index for a smaller number of companies to test its reliability and efficiency.
  • Scale up the implementation of the index with the involvement of more companies, banks and public officials. 

No framework to measure the environmental impact along the supply chain.

ChallengeSolutionsActors Implementation 
  • There is no adjustment mechanism that takes into account the CO2 and other environmental related costs at EU level, thus preventing a level playing field for EU and non-EU companies.
  • No in-depth legal guideline how to share data and treat it (e.g. carbon footprint for construction).
  • Ιntroduction of a potential CO2 carbon border adjustment mechanism (or any tax alternative) for imports with a requirement for importers of goods to measure, report, and factor in the costs of a product’s carbon footprint.
  • Require mandatory European environmental audit for construction materials imported from third countries.  
  • Introduce a calculator that measures the embodied carbon footprint in the construction materials.
  • Implement an European online database to share the relevant information regarding the material environmental footprint (e.g. CO2, waste water).
  • EU Parliament (Committee on Internal Market and Consumer Protection (IMCO), ENVI committee).
  • EU Commission (DG Grow, DG COMP, DG ENV, DG TAXUD).
  • National parliaments and governments.
  • National and European research centers.
  • NGOs (e.g. Sandbag).
  • Submit a joint position on the EU’ Green Deal‘s open public consultation (carbon border adjustment mechanism) suggestion in accordance to the proposed solutions developed within the weTHINK’s strategy. 
  • Issue a press release on the subject in the name of the working group. 
  • Develop a  Carbon Embodied in construction Materials Calculator (Research institutes, private companies and public authorities to participate).
  • Support a media campaign to promote the implementation of Carbon import tax or the ETS for imported goods that would ensure a level-playing field.
  • Conduct awareness campaigns towards construction companies, procurement agencies and wider public to promote the use of construction materials that have European CO2 certification and a reduced environmental footprint.
  • Οver-reliance on CAPEX and neglect of TOTEX.
  • Promote more Design Build (Operate) projects that can ensure long-term project sustainability with early stakeholder engagement 
  • Support the usage of TOTEX as a possible evaluation criterion.
  • EU Commission.
  • National parliaments and governments.
  • Research centers.
  • Universities.
  • Business associations.
  • Engineering organizations.
  • Benchmark study that would detail on a practical example (a project developed in the region/country) the relevance of TOTEX, possible gains and means of implementation of TOTEX as evaluation criteria. The study to be conducted in research-industry cooperation.
  • Involve media sources in the debate regarding the relevance of TOTEX vs CAPEX.
  • Difficulties in measuring sustainability criteria:
    • No online tracking tools to measure environmental impact along the supply chain. 
    • Other environmental impacts than CO2 of the project along the supply chain are neglected. 
  • Develop an evaluation/measurement framework for environmental footprint of construction materials (e.g. steel, cement, lime) along the supply chain. 
  • Promote implementation of the data passports for materials in the construction sector.
  • Implement a (border) evaluation/ measurement system for additional environmental factors that applies to all importers.
  • Research centers.
  • Universities.
  • Construction companies.
  • Construction material producing companies.
  • ΕU Parliament.
  • EU Commission.
  • National parliaments and governments.
  • Organize a media campaign to support the implementation of a border evaluation system for additional environmental factors.
  • Support financially the implementation of data passports in construction.
  • Require mandatory data passports for materials used in large public construction projects.
  • Build a material passport data platform for knowledge sharing.

Sustainability aspects are not considered in public procurement process. 

ChallengeSolutionsActors Implementation 
  • Best Price strategy is preferred to avoid legal disputes because there is less room for interpretation of subjective criteria, resulting in possible corruption practices. 
  • Legally commit for more sustainability criteria to be introduced in the tendering process. The criteria themselves should be formulated during the procurement process and not in the legislation. 
  • ΕU Parliament.
  • EU Commission.
  • National parliaments and governments
  • NGOs and civil society organizations.
  • Define, with a wide stakeholder participation, what constitutes environmental criterias and at what stage those should be considered in the public procurement process.
  • Lack of expertise and training for the procurement authorities with regard to the implementation of more sophisticated environmental indicators as evaluation criteria. 
  • Lack of an EU guidebook/toolkit on how to handle sustainability in procurement.
  • Build an online training platform for specialized webinars on how to implement sustainability criteria in procurement and engage local authorities with it. 
  • Yearly training on best practices in procurement should be mandatory for procurement officers.
  • Develop an EU toolkit (framework and technical solutions) on how to handle sustainability in procurement, setting objective and measurable criteria.
  • Outline a baseline threshold on environmental and social criteria (e.g. ISO certified) as a pre-qualification requirement. 
  • There should be a platform contracting authorities can share the sustainability criteria use.
  • Universities and local/European research centers.
  • Industry associations.
  • Media actors .
  • National parliaments and governments.
  • Joint statement from all the relevant actors from the construction sector on the importance of regular training regarding state of the art procedural and technical know-how on sustainability in construction.
  • Establish an alliance with national and local authorities to promote training and specialization activities and improve the existing legislation.
  • Develop a partnership between research centers, authorities and industry actors to finance the development of a toolkit for sustainability in procurement.
  • Set up a permanent working group of industry actors that would outline and keep updated the most relevant environmental and social criterias that could be considered in the procurement process. 
  • Develop a platform for contracting authorities to share their knowledge and experience regarding sustainability criteria in procurement and do the performance rating of these criteria. Also contracting authorities could evaluate and select relevant companies based on their profile and reference list
  • Lack of experience in implementing more Design, Build and Operate projects, which leads to reduced material efficiency and sustainability in construction.
  • Introduction of a BIM (Building Information Modelling) system,in the procurement process  across the supply chain will increase the efficiency of material usage and decrease the environmental impact.
  • Engineering community.
  • Planning companies.
  • Consultancies.
  • National parliaments and governments.
  • Prepare a series of learning (e-learning) materials that would introduce BIM and explain the basics of it to the wider practitioners community.
  • Involve public actors in promoting and supporting training on BIM usage and implementation.
  • Build a coalition of actors to write a project proposal (e.g. engineering companies. consultancies) for financing (e.g. the EU, EIB, EBRD) of training activities for BIM.

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