Public tendering and requirement specifications can play a huge rule in the transition to a circular economy.
“You’ve got to differentiate between basic things like, whether you’re procuring a maintained lawn or a lawnmower though, right?” says Louise Wallmander, who works at Varberg Municipality’s Business and Destination Office, which has participated in Cirkulära Halland (Region Halland’s project on circular business models).
In order to meet the goals of the Paris Agreement on Climate Action, companies simply must make the transition from linear products to producing and selling circular services instead. For that to happen though, you need both sellers and buyers to get on board.
One important “buyer” and influencer in society’s shift to a circular economy is the public sector, given that it is involved in procurement worth billions of SEK each year. Cirkulära Halland has thus not only engaged companies from the private sector, but also relevant participants from the public sector, like Varberg Municipality.
– “We held training via Cirkulära Halland in 2019,” explains Louise Wallmander, who was in charge of the project at Varberg’s Business and Destination Office. “Our office participated and we also invited three privately owned companies and three municipal companies to join us and learn more about the circular economy approach,” she says.
From strategy to action
One of the biggest outcomes, however, was the quick realization that the municipality’s public tendering practices offered the greatest opportunity for really delivering on their strategic sustainability goals. For this reason, the procurement office was also invited to participate in the project.
– “When they procure items on behalf of the municipality, they must specify the requirements very carefully. And if the specifications only cover products, rather than functions, companies committed to circularity will never have a chance at winning the contracts. That’s why those of us working with procurement at Varberg Municipality need to understand the difference between procuring maintained lawns and procuring lawnmowers,” she says.
Investment in training
During the year, Varberg Municipality made major investments in training for everyone who participated in the project, including its own procurement department.
– “For us, and many of the other municipalities we engaged with during the year, we were lacking knowledge as to how far private industry has come in offering circular functions. So, it’s been a learning process. Nevertheless, we’ve begun and have now completed our first, at least partial circularity-based tendering process for furniture,” she says.
It’s been a learning process
Procurement of a function instead of a machine
Halmstad, which is Varberg’s neighbour to the south, is another municipality that is starting to look more closely at adapting its procurement to the circular approach. They, too, also recently completed their first tender where focus was on a function rather than a machine.
– “We definitely want to do whatever we can to care about the world around us and our environment,” says Jenny Hertsgård, Head of the Park and Nature Department at Halmstad Municipality. But, we also saw an opportunity for improvement, making sure that we had the right machinery for the task, during each season of the year,” she says.
The municipality had, in the past, purchased mowers for use during the summer. Then, they adapted them to be used for plowing snow and spreading anti-slip materials during winter.
– “As mowers, they were great. But for winter use, they were suboptimal and there was a lot of wear and tear from using them in this way,” says Jenny Hertsgård. Optimal park operations require that we use the right staff and the right machinery for the task. With that in mind, we became interested in the opportunities that could arise with circular procurement,” she says.
We’re all familiar with the concept of a “wear-and-tear” or “throw away” society. Where we use a product until it breaks or it is time to replace it with a newer model. And then, you just throw the old one in the dumpster. Today, we think differently. We know that our world’s resources are finite and that we must take better care of our planet. With that in mind, the Paris Agreement on Climate Action and Goals of the 2030 Agenda for Sustainable Development have set high demands on countries, regions, municipalities, companies and consumers alike. But, where do we start? How do we actually create a sustainable, circular economy? How do companies broaden and adapt their businesses to become both profitable and circular? And, how can the public sector (municipalities and regions) adapt their tendering processes to impact the market?
In Cirkulära Halland (Region Halland’s project on circular business models), RISE has worked in close collaboration with industry and municipalities to create the prerequisites for a circular economy. This is our story.