11 December 2024

ESG: Sustainability in public procurement

  • Articles
  • Legal
  • Governance / ESG

Every year, the public sector (Confederation, cantons and municipalities) procures goods, services and construction work worth more than CHF 41 billion. Through its demand, the public sector can play a pioneering role, particularly in the circular economy, and thus make an effective contribution to climate protection and the conservation of natural resources. If the state sets a good example in ecological procurement, it also strengthens the credibility of the state's environmental policy.

  • Adrian Peyer

    Legal Partner

Legal framework:

The United Nations has set itself 17 goals for sustainable development. All UN member states should achieve these by 2030. One of the sub-goals of the agreement, to which Switzerland has also committed itself, is: "Promote sustainable practices in public procurement." Accordingly, the aim is to promote goods, services, construction services and forms of production that meet the social, environmental and economic requirements of sustainability.

Every year, the public sector (Confederation, cantons and municipalities) procures goods, services and construction work worth more than CHF 41 billion. As a consumer, it can therefore exert an influence on the market that should not be underestimated. With ecological requirements, e.g. with regard to energy consumption or the chemical content of the products supplied, and consistent consideration of the life cycle, the public sector promotes the development of high-quality, innovative and resource-conserving products. Through its demand, the public sector can play a pioneering role, particularly in the circular economy, and thus make an effective contribution to climate protection and the conservation of natural resources. If the state sets a good example in ecological procurement, it also strengthens the credibility of the state's environmental policy.


Sustainability criteria:

The focus in public procurement is on environmental and social criteria and the prevention of corruption.

  • Environmental criteria refer to principles 7 to 9 of the UNGC.
    This means applying the precautionary principle, particularly with regard to climate change and greenhouse gas emissions, promoting environmental awareness, resource efficiency and the development, application and dissemination of environmentally friendly technologies (i.e. promoting innovation). According to the prevailing view today, green procurement does not only mean considering suppliers and products that comply with environmental protection legislation. Rather, the public sector should also look for products and services with the least possible impact on the environment. This means that products and services must meet environmental requirements throughout their entire life cycle (planning, production, use and disposal phases).
  • Social criteria refer to principles 1 to 6 of the UNGC.
    In other words, these are intended to prevent "complicity" in human rights violations committed by third parties, namely by suppliers (e.g. with regard to safety in the workplace, compliance with working hours and fair pay). The social criteria include, in particular, compliance with the eight ILO core conventions (e.g. abolition of child and forced labor as well as ensuring freedom of association and non-discrimination). As far as possible, the procurer must ensure that these principles are observed
  • In the corruption prevention dimension, the procurer must do everything in its power to prevent corruption, including extortion and bribery, in the procurement process (see Principle 10 of the UNGC).


Cantonal regulations based on the example of the Canton of Zurich:

In the canton of Zurich, the revised Intercantonal Agreement on Public Procurement (revised IVöB) has been in force since October 1, 2023. The new public procurement law contains a clear commitment to sustainable procurement. Sustainability is already mentioned, for example, in the purpose article (Art. 2 IVöB). One of the most important changes is Art. 41 IVöB: the contract is now awarded to "the most advantageous tender" (previously "the most economically advantageous tender"). Ecological and social criteria can be integrated into the award criteria (Art. 29 IVöB).

The guidelines specify the Government Council's procurement policy and support the cantonal administration and interested municipalities in implementing the IVöB. The guidelines were developed in collaboration with the canton's procurement offices and with external advice and were published in September 2023 (Guidelines for Sustainable Procurement | Canton of Zurich).


Specifically: Can the public sector demand labels in the tender, for example?

Environmental and other labels may be used as technical specifications and as award criteria. It is also conceivable to use labels as proof of compliance with the conditions of participation. If it serves an environmentally friendly and socially responsible production of the procurement object, labels that contain requirements for general corporate action (e.g. Fairtrade) may also be required as part of the new procurement culture.

However, the principle of equal treatment requires the acceptance of equivalent labels. Any offer that meets the same requirements must be accepted.

If labels are required as proof, it should be borne in mind that these are subject to a charge and are therefore sometimes not applied for by SMEs. Equivalent evidence should therefore also be accepted.

The "labelinfo.ch" web portal developed with the support of the FOEN provides an overview of the most relevant labels available on the Swiss market (see "Recommendations for green public procurement").


How can a company position itself better in the tendering process?

Companies are confronted with increased and very different requirements in the area of sustainability in tenders, whether from private companies or the public sector.

Nowadays, large companies that are listed on the stock exchange have extensive sustainability reports with detailed information. SMEs, which are not yet legally obliged to collect and report such information, often find it difficult to submit the required data and information in a tender.

We therefore recommend taking a proactive approach to labels and standards.

Various tools and labels are available for companies to have their sustainability efforts assessed.

Ecovadis (ecovadis.com), for example, is an internationally recognized standard. Due to the relatively complex evaluation process, it is more suitable for larger companies. SMEs with fewer resources can use the Swiss tool "esg2go", for example, to evaluate their sustainability efforts and have a corresponding report drawn up (esg2go.org). Certain Swiss companies also require their suppliers to submit such a report.

Regardless of which tool is used, we recommend that a company records its sustainability data (e.g. CO2 emissions, energy consumption, paper consumption, number of employees, etc.) and defines and documents processes and responsibilities within the company. The aim must be to create a solid basis for recording the data, which will also be "audit-proof" in the future.

It should be noted in this context that information on climate issues must be correct (ESG: Switzerland decides to ban greenwashing). The Federal Act against Unfair Competition (UCA) will be tightened in this respect: "Makes statements about itself, its works or services with regard to the climate impact caused that cannot be substantiated by objective and verifiable bases." (Art. 3 para. 1 lit. x UCA).

If you have any questions about sustainability in public procurement law, please do not hesitate to contact our ESG team.


Appendix:

Overview of relevant legislation (international and federal level):

United Nations Convention against Corruption, in force: October 24, 2009 (as of May 5, 2017), SR 0.311.56.

OECD Convention on Combating Bribery (Convention on Combating Bribery of Foreign Public Officials in International Business Transactions), in force: July 30, 2000 (as of March 25, 2015), SR 0.311.21.

Government and Administration Organization Ordinance (RVOV) of 25 November 1998 (status: 1 September 2017), SR 172.010.1.

Federal Personnel Act (FPA) of March 24, 2000 (as of January 1, 2017), SR 172.220.1.

Federal Personnel Ordinance (FOPO) of July 3, 2001 (as of January 1, 2017), SR 172.220.111.3.

Federal Law on Public Procurement (BöB) of December 16, 1994 (as of January 1, 2016), SR 172.056.1.

Ordinance on the Organization of Public Procurement in the Federal Administration (OrgVöB) of 24 October 2012 (as of 1 January 2017), SR 172.056.15.

Ordinance on Federal Real Estate Management and Logistics (VILB) of December 5, 2008 (as of January 1, 2016), SR 172.010.21.


Further information (see bkb.admin.ch):
Back

Your Team