Challenge: In 2020, only 3% of public procurement spending by value used green award criteria favouring environmentally-friendly products and services in Lithuania. The government wants to shift that to 100% by 2023.
Approach: Lithuania launched an ambitious public procurement reform in 2021 to reduce the country’s carbon footprint and ensure every public procurement decision considers its environmental impact. The Environment Ministry created a roadmap for this reform, with a ministerial decree setting the criteria for what counts as green procurement and which includes regular reporting milestones. The Lithuanian Public Procurement Office (LPPO) created a new sustainability unit to lead the charge, encouraging the use of green award criteria with training, a helpdesk to assist buyers, and with specific guidance for high-impact sectors. The LPPO is also using open procurement data to track the status of its ‘green targets’ through a user-friendly public dashboard, nudging authorities if they lag behind. Green fairs, catalogues, and other vendor outreach events encourage government buyers to change their purchasing habits.
Results: Levels of green procurement uptake across Lithuanian public institutions have increased to 59.7% by value and 32.6% by total procedures for 2022. The LPPO is now keen to move beyond measuring outputs like the use of green criteria to focus on the outcomes from better procurement, such as reducing Lithuania’s carbon footprint.
More than half of Lithuanians expect the national government to lead efforts to tackle climate change. Yet a 2020 Lithuanian government program showed that spending on green procurement has been decreasing year-on-year.
Lithuania’s Ministry of the Environment and its Public Procurement Office (LPPO) didn’t just decide to fix the decline. They went large, aiming to procure 100% green products and services by 2023.
Established by ministerial decree, their green public procurement reform affects around 4,000 agencies that conduct at least one public procurement procedure annually.
After the reform’s first year (2021), use of green procurement across all agencies has increased from 3% in 2020 to 59.7% of all Lithuania’s procurement by value, exceeding the target of 50% by value. This accounts for 32.6% of total procedures although the decree didn’t set formal volume targets for 2021.
The LPPO’s plan builds on their other successful efforts to encourage transparency and innovation. These include opening up emergency contracting during the pandemic, which saw government, civil society, and journalists work together to track pandemic spending and fix bottlenecks and poor purchasing. To foster integrity and better procurement decisions, the LPPO website also publicly lists vendors who have supplied false information or are qualified as “unreliable” based on past performance.
It’s not easy being green
But how exactly is green procurement defined? Under the 2021 decree, a procurement is ‘green’ if it:
- Uses award criteria established by the Environment Ministry, building on the European Commission’s GPP criteria via the ministerial decree;
- Includes supplier certificates such as ecolabels or environmental management systems;
- Comes from pre-selected product groups that have been defined as green.
If an institution cannot use specific award criteria (say, an ecolabel), it can construct its own criteria that effectively achieve the same objective by applying green principles, such as asking for a product that uses recycled materials or is produced with renewable energy. The LLPO is learning on the go about the challenges of criteria use and is planning to introduce an intelligent system of exceptions to account for situations where applying green criteria is near impossible — for example, when the National Opera struggled to use green criteria for hiring an orchestral conductor.
The criteria are not yet mandatory but are strongly encouraged. Open reporting with clear institutional performance ratings are being used to incentivize adoption, as well as sector-specific and general guidance, web tools, tailored training, trade fairs and one-on-one consultations through a helpdesk. These activities are coordinated by the Sustainable Procurement Competence Centre, a special unit in the LPPO created by the Government in July 2021.
“The growth of inquiries shows a genuine need for hand-holding. In 2021, since we started, we received around 150 queries about the use of green criteria. That figure tripled in 2022″, says Greta Ambrutytė, the Head of the Competence Centre.
Setting up guidelines and support systems
Lithuania’s roadmap for uptake included milestones: 10% adoption by value for 2021 and 50% for 2022, intending to reach 100% green procurement by 2023.
Green public procurement (GPP) support and guidance are being rolled out in phases across different product groups in high impact sectors. Its first phase is focused on two key sectors for sustainability: transportation and food. Future phases will focus on construction and renovation and introduce new criteria for electricity and fuel. These will all be developed through public consultations.
How OCP is helping
The Open Contracting Partnership (OCP) has been building on its pandemic response work with the Lithuanian government to support dialogue between stakeholders and advise on data and benchmarks to publicly track the reforms. This includes helping structure the government’s data and metrics using the Open Contracting Data Standard as a global best practice schema for procurement data. We have been working with reformers on how to measure the outcomes from the use of green criteria, focussing first on CO2 emissions from Lithuania’s food sector procurement.
Tracking goals and delivering results
In 2022, the Public Procurement Office added a set of key sustainability performance indicators to its procurement dashboard.
“At the LPPO, we are showcasing how open data can be used to promote and track sustainable purchasing. We have created a scoreboard for public authorities, which collects and presents data on technical specifications, award criteria, and clauses. It also shows the detailed levels of green procurement uptake across Lithuanian institutions” said Kestutis Kazulis from the Lithuanian Public Procurement Office in a recent webinar.
Levels of green procurement uptake across Lithuanian public procurement institutions are currently at 59.7% by value and 32.6% by total procedures for 2022.
The indicators and dashboard have benefited stakeholders on both sides of the tendering process.
On the one hand, the public dashboard has created “healthy competition between buyers within their sectors, as no one wants to fall behind,” says Kazulis. And on the other hand, it is particularly helpful for buyers to look into past green technical specifications of similar (or the same) goods and services they are planning to buy. They are seeing the impact that the reform is having to incentivize suppliers to transform their business to become more green in strategic markets such as public transport.
It allows the government to monitor uptake by institutions and for the LPPO to direct more hands-on support where needed. The dashboard also provides them the data to plan and target their assistance toward bigger future procurements.
Of course, challenges remain. There are gaps in the data: some 23% of the contracts coming out from the tenders have yet to be published by public procurement entities in 2022. The LPPO expects this figure to decrease after this indicator was recently added to the public dashboard.
With green procurement still very much an emerging practice in many countries, achieving 100% in only two years seemed more a political statement than a realistic goal. But a data-driven approach is now helping to set milestones and measurable targets and track them in real-time for everyone to see. The procurement agency is already exploring new opportunities to apply that data and technology, such as using artificial intelligence to help buyers make greener decisions.
The reform has a clear future action plan, which includes strengthening the legal mandate for green purchasing, further professionalizing the process, and introducing new tools into the e-procurement system that will facilitate greener procurement choices by 2025.
“Here in In October, we’re organizing the Green Procurement Fair to help buyers meet suppliers face-to-face to learn about exclusively sustainable products, services and works,” added the LPPO’s Kazulis.
With climate change already having visible effects around the globe, Lithuania’s experience holds valuable lessons for all governments facing the challenge of making their procurement practices better for people and the planet.