Circular Procurement Pays Dividends

Contributed article that appears in Media Planet:

Despite Canada’s efforts in building a better circular economy, it could learn from other countries to build a more sustainable tomorrow

Canada’s circular economy is generally expressed as waste minimization through improvements to recycling or product design. However, its principles are based on broader concepts that deliver simultaneous benefits: preserve natural capital, manage cost, improve competitiveness, bolster local economies, and reduce waste and greenhouse gas emissions.

While governments are beginning to see merit in circular principles they tend to integrate it narrowly through regulatory change, which is arduous and slow. Fortunately, there is opportunity for governments to advance circular outcomes immediately.

Circular procurement, as defined by the European Union, is the purchase of works, goods, or services that seek to contribute to closed energy and materials loops within supply chains, whilst minimising or … avoiding negative environmental impacts and waste creation across their whole lifecycle.

Recognizing its opportunity, the European Commission developed a guide to accelerate implementation of circular procurement with case studies that quantify economic, social, and environmental benefits.Using the guide, Turin, Italy introduced criteria for school catering contracts where bidders were encouraged to favour low environmental impact packaging, including reusable or biodegradable products. One requirement included a shift from plastic to reusable dishes that was estimated to eliminate 157 tonnes of waste annually. Zürich, Switzerland switched from buying/leasing multifunctional devices to procuring a managed service that paid per page printed. Energy savings of 34 percent was achieved and the quantity of printed pages was reduced by 30 million annually.

The Governments of Canada and Ontario spend $230 and $89 billion respectively on goods and services every year. Leveraging that kind of purchasing power can meet multiple policy objectives of financial prudence, economic growth, and environmental protection. So what’s the holdup?

Implementation of new processes remains a sizeable barrier. Departments that focus on environmental protection rarely influence procurement officials, and the centralized departments that oversee purchasing across the entire system may not be aware of circular principles. Most governments do require environmental considerations as part of tenders, however, they are narrow and rarely measured on the same level as price and service.

Circular procurement has proven to pay dividends elsewhere in the world. Now it’s Canada’s turn.