As purchasers of a diverse range of goods, services and infrastructure to meet not only their own operational needs but also to deliver on their public service mandate, governments procurement spending represents scaled-up and long-term demand across a wide number of industries. Strategically directed, this demand has the ability to act as a market supporter and catalyst, incentivizing businesses to take the risks to invest, innovate and commercialize green products and services (IISD, 2012).
By committing to the purchase of goods and services that meet certain sustainability criteria, governments can help stimulate the creation of green markets. For instance, government procurement can trigger high-volume and long-term demand for green goods and services, and thereby allow firms to capture economies of scale. Appropriate incentives can boost technology investment and spur firms to innovate. In addition to stimulating the greening of economic sectors, procurement choices are crucial for governments to lead by example and demonstrate their commitment to sustainable development.
Relevance to the SDGs
The Sustainable Development Goal (SDG) 12 references the sustainable use of goods and services. Specifically, target 12.7 promotes public procurement practices that are sustainable, in accordance with national policies and priorities.
Explore green growth resources related to SDG 12: