Purchase for impact - how procurement and public spending can accelerate development

Anne-Claire Howard joined UNOPS in 2022 as Director of the Procurement Group. She has been the co-chair of the Sustainable Procurement working group in the United Nations High Level Management Committee Procurement Network since May 2023. Anne-Claire has over 20 years of experience in heavy industry and raw materials sustainability, good governance and responsible supply chain management. Prior to joining UNOPS, Anne-Claire advised multiple organisations on sustainable supply chains including the International Finance Corporation, Adam Smith International and Shell. Most recently she was the CEO of Responsible Steel, a global multi-stakeholder standard and certification initiative that aims to maximise the role of steel in building a sustainable society. A graduate of Johns Hopkins School of Advanced International Studies and Science Po Paris, she is also a member of the first cohort of the Franco-British Young Leaders Network.

As the central procurement hub of the United Nations, what is your approach to procurement towards other partners in order to ensure sustainability in procurement?

Our approach, as reflected in the restated UNOPS Strategic Plan 2022-2025, is to help governments and other partners plan and implement transparent, cost-effective public procurement for sustainable, equitable and gender-sensitive impact. As a central United Nations resource for procurement, we harness efforts for economic, social and environmental effect through sustainable procurement and capacity development of local supply chains and public institutions, responding to all Sustainable Development Goals, especially SDG 12. Institutional capacity development for sustainable, transparent and fair public procurement practices can expand the resources available for countries to accelerate achievement of the SDGs and combat climate change.

We help our partners purchase for impact by:

• Realising potential through sustainable procurement: UNOPS ensures sustainable and resilient procurement that can strengthen supply chains, enhance transparency and facilitate inclusive choices. Diversifying supply chains can give businesses owned by women, young people, people with disabilities and ethnic minorities a chance to prosper.
• Ensuring more effective public spending to empower institutions: UNOPS helps public procurement be more efficient, with greater levels of transparency, greater value for money, a greater impact for governments and better public services for the people they serve.
• Supporting local economies: Around half of our procurement is from local suppliers, which can help lessen environmental impacts by reducing emissions and directly support local economies.
• Optimising public procurement for impact: UNOPS strives to free up resources by realising efficiencies, avoiding loss from fraud, corruption and lack of transparency, and increasing effectiveness through choices that enable sustainable, resilient and inclusive development.

How does UNOPS assess the global situation with regard to sustainable public procurement?

Public procurement accounts for an estimated USD 9.5 trillion in global public contracts annually, of which EUR 2 448 billion is awarded in the European Union, making it an important catalyst for economic growth. Its impact extends across a range of economic sectors, from the provision of school meals to hospital constructions.

The last official global assessment of sustainable public procurement (SPP) was conducted by UNEP in 2022 and shares some interesting conclusions. As the report concludes, there is a general acceptance of SPP as an international public procurement best practice but still a challenge in balancing the ‘vertical’ objectives of public procurement (generally recognized as integrity, transparency, economy, openness, fairness, competition, and accountability) and the ‘horizontal’ ones (advancing national sustainable development objectives). While the strategic value of public procurement has long been recognised, its disconnection from development opportunities raises the question of whether a new comprehensive approach to public procurement is needed.

Defining sustainable public procurement plans around low-hanging fruit is an appropriate approach to make the case, but governments should use public procurement as a strategic tool aligned with their national development plans to deliver greater value and better outcomes.

Establishing stronger connections would facilitate foresight, encourage long-term planning and elevate the discourse around public procurement from a conventional administrative function to a strategic tool that exerts considerable influence on an administration's ability to implement public policies and align the private sector with shared objectives. Adopting more efficient practices would allow redirecting freed-up resources towards actions that directly contribute to the achievement of the Sustainable Development Goals (SDGs).

Implementing SPP beyond law but actually turning this into systematic action is a challenge we face daily. There is a lot to do in this space and we are committed to supporting our partners in implementing SPP through all facets of our procurement activities. This comes through capacity building, creating practical tools that can be used by all but also by highlighting the commitments made by others. In that sense, we welcome all commitments from donors and multilateral development banks who make sustainable procurement a key aspect of their delivery.

You recently worked on developing measurement and mitigation strategies for the reduction of UNOPS’s scope 3 emissions. Do you have any advice for other organisations seeking to decarbonise their activities or supply chains?

UNOPS is still at the beginning of its scope 3 reduction journey. But we are working in UNOPS and alongside other organisations in the development space on walking the talk when it comes to reduction of emissions in our supply chain. For UNOPS this has a number of layers: we have the procurement we do for our own operations (approximately 2% of our spend) and the vast majority of procurement which we do as part of our project delivery.

The advice we have is to take a step-by-step approach. Supply chain related emissions are vast and complex, especially in the development space and especially for organisations like ours, with the majority of our work in fragile and conflict affected contexts with local suppliers. Currently we are looking at expanding our accounting for indirect emission from our value chain activities, with the main objective of driving meaningful improvements and quantifiable emissions reductions. We are prioritising our approach based on the materiality of emissions sources based on their estimated magnitude, their influenceability, the interest of our stakeholders, and other social/ environmental co-benefits. 

But we believe that working across the development space, with other UN agencies, with our funding partners and with other humanitarian agencies is the best way to achieve meaningful impact and reductions.

UNOPS recently published a report on ‘Gender-responsive Public Procurement’, you mentioned that “procurement plays an important role in not only working towards creating economic empowerment but also promoting equality and inclusivity”. What actions is your department taking to meet SDG 5 - gender equality?

UNOPS as a whole has taken an all-encompassing approach to gender with the launch in 2022 of the Gender Equality and Social Inclusion Mainstreaming Strategy in Projects reaffirming our commitment to gender equality, diversity and inclusion. It mobilizes our efforts to promote equal rights and opportunities for people to live full lives, supported by sustainable, resilient, and inclusive infrastructure, and by the efficient and transparent use of public resources in procurement and project management.

More specifically in procurement, we have focused on:

• Strengthening our gender responsive procurement processes: where gender mainstreaming continues to be an essential element of our Sustainable Procurement Strategy. UNOPS Sustainable Procurement Framework requires that all formal tenders include sustainability considerations including gender. This informs UNOPS of the plans that suppliers have developed to impact gender equality and support gender mainstreaming through the delivery of the contract. In addition, this informs UNOPS how the suppliers support gender mainstreaming practices within their operations (i.e. through the DRiVE supplier sustainability programme (see below) and requests for formal written statements as part of their bids). This year to date, we have achieved over 90% compliance with the framework globally and the Procurement Group is working to further increase this.

• Setting internal targets: Building on our previous efforts and progress, in 2020, the UNOPS Procurement Group set internal targets to enhance gender mainstreaming in our tenders. These included a target that UNOPS ensure that globally at least 1,500 women-owned businesses participate in our tenders, and that at least $10m USD in contracts are successfully awarded to women-owned businesses. In 2022 UNOPS exceeded its ambitions for women-owned businesses in terms of both participating in tender processes and the value of tenders awarded to these businesses.

• Promoting responsibility in vendor engagement: As part of the Sustainable Procurement Framework, UNOPS implements a multifaceted due diligence approach to provide insight into how suppliers manage their impact, awareness and the mitigation of supply chain-related issues. This is done through the development of a vendor self-assessment, verification/inspection and corrective action-planning programme, which is mainstreamed into UNOPS procurement policy under the name DRiVE (Delivering Responsibility in Vendor Engagement). DRiVE focuses on helping suppliers improve their own ambitions on sustainability while in turn helping to ensure UNOPS ability to provide safeguarding through downstream engagements. 

  Since January 2020, all suppliers responding to a tender for a Long-Term Agreement (LTA), Invitation To Bid (ITB), and Request For Proposal (RFP) for goods and services above $50,000 must complete the DRiVE supplier self-assessment questionnaire which includes eight questions related to gender.

  A dashboard of the collected data helps with background checks, and voluntary corrective actions by the awarded supplier. Starting from 2020 to date, more than 9,400 suppliers have filled out the self-assessment from 160+ countries in 3,900+ tenders.

• Ensuring supplier diversity and inclusion. The next iteration of the UNOPS Possibilities Programme - UNOPS Supplier Diversity and Inclusion initiative supports UNOPS to target more women-owned businesses to work with. It supports capacitation of suppliers on various topics including gender, sustainability and general procurement.