Sustainable Public Procurement: A New Policy Imperative for Pakistan

A new appeoach

By Dr Asim J. Abro

After consulting a wide range of stakeholders, the Ministry of Planning, Development and Special Initiatives introduced the “5Es Framework” to steer Pakistan towards sustainable economic growth and development.

It outlines both short and medium-term priorities to strengthen the country’s economic resilience and institutional capacity in the years ahead. The 5Es agenda revolves around five key pillars: Exports, E-Pakistan, Environment and Climate Change, Energy and Infrastructure, and Equity and Empowerment.

Under the Environment and Climate Change pillar, strengthening institutional, legal, and policy frameworks have been emphasised to address the growing risks associated with climate change. This focus is particularly important given Pakistan’s heightened exposure to environmental shocks and climate-related risks.

Successful implementation of sustainable public procurement requires a robust performance measurement and reporting mechanism. Digital procurement platforms such as ePADS would play a crucial role in improving access to information, monitoring compliance, and facilitating data-driven decision-making. By embedding sustainability into procurement policies, Pakistan can transform public spending into a powerful driver of green growth, environmental protection, and inclusive development

The country faces mounting challenges in preserving environmental sustainability while simultaneously strengthening its capacity to adapt to climate change. Pakistan is one of the world’s most climate-vulnerable countries. According to the Global Climate Risk Index published by German watch, Pakistan has repeatedly ranked among the top ten countries most affected by climate change over the past two decades, underscoring the urgency of robust mitigation and adaptation strategies.

The World Bank’s Business Ready report emphasizes cross-cutting themes such as environmental sustainability and gender mainstreaming, particularly within public procurement systems. The report encourages governments to integrate environmental considerations into procurement policies by establishing standards, guidelines, and criteria that define minimum environmental performance requirements. Such measures may encompass standards related to energy efficiency, reduced emissions, sustainability certifications, and the use of environmentally friendly materials. It is also emphasized to promote eco-certification and eco-labelling systems for vendors, along with clear specifications for environmentally preferable goods and services.

According to the B-Ready Report 2024, under Pillar I (Regulatory Framework), Pakistan scored 59.10 points, while under Pillar II (Public Services) it received 44.97 points. In Pillar III (Operational Efficiency), the country achieved 65.90 points, indicating relatively stronger performance in operational aspects compared to regulatory and service delivery dimensions.

Pakistan annually spends around 20 percent of its GDP, or $60 billion, through this medium. This includes approximately 90 percent of the budget of public sector enterprises. Moreover, Pakistan is the signatory of Sustainable Development Goals, and Goal-12 specifically addresses the need to ensure sustainable consumption and production patterns. The SDG 12.7 target aims to “promote public procurement practices that are sustainable, in accordance with national policies and priorities”.

The country’s public procurement system has yet to fully integrate sustainability dimensions, namely social, economic, environmental, and governance considerations into its framework. Incorporating sustainable procurement parameters across the entire procurement cycle, from planning to contract award and implementation, can enable Pakistan to maximize the broader benefits of public spending. The adoption of Sustainable Public Procurement Policy principles within the existing system would facilitate a gradual transition toward more sustainable and green public procurement practices.

Public procurement is increasingly being used globally as a policy tool to promote sustainable development by integrating environmental and social considerations into purchasing decisions. In South Asia, many countries have taken initiatives to integrate SPP into their frameworks.

Bangladesh has taken the lead by adopting a formal SPP policy in 2016, which incorporates environmental and social safeguards into public procurement. India has also advanced green procurement through initiatives led by Energy Efficiency Services Limited and the Government e-Marketplace platform, promoting energy-efficient and environmentally friendly products. Sri Lanka and Nepal have introduced environmental considerations within their procurement frameworks, particularly in infrastructure and climate-related projects, although comprehensive policies are still evolving. 

The federal PPRA has recently notified the “Minimum Energy Performance Standards Compliant Pakistan Energy Labelled (Star-Rated) Products Regulations, 2025” making a major breakthrough toward integrating sustainability into public procurement. Under these regulations, all public sector organizations are now required to procure five categories of products including fans, motors, household refrigerating appliances, LED lights, and room air conditioners, only from vendors offering products that carry star rating accredited by the National Energy Efficiency and Conservation Authority. The regulations aim to ensure compliance with the Pakistan Energy Labelling scheme developed by NEECA, thereby promoting energy efficiency and environmentally responsible procurement practices across the public sector. 

However, sustainable public procurement in Pakistan is still nascent, and more concrete measures are needed to integrate environmental standards and green procurement practices into the country’s procurement regime. A two-pronged approach is essential for this.

First, comprehensive policy reforms should ensure that public sector organizations prioritize the procurement of environmentally sustainable products and services. Second, targeted policies should be introduced to encourage manufacturers and suppliers to produce and supply eco-friendly goods and services that comply with national and international environmental standards. Alongside these reforms, sustained awareness campaigns and capacity-building initiatives will be critical to strengthen implementation, while continuous stakeholder feedback can help refine policies and improve their effectiveness over time.

In order to effectively integrate sustainability considerations into the public procurement framework, the government may adopt a comprehensive policy approach that balances economic, environmental, and social objectives. Economic viability should be considered as a key principle, ensuring that sustainability initiatives remain cost-effective and deliver value for money.

Ministries and departments should apply the total cost of ownership or life-cycle costing principle, which reflects not only the purchase price but also operation, maintenance, and disposal costs over the life of a product or service. Additionally, cost–benefit analyses may be undertaken to assess the economic advantages of energy efficiency, waste reduction, and productivity improvements. To encourage sustainable practices, the government may also introduce incentives and reward mechanisms both for government agencies and manufacturers/suppliers demonstrating exceptional sustainability performance. Promoting innovation and use of modern technologies can further enhance efficiency while reducing long-term costs. 

A strong governance framework is essential for ensuring the effective implementation of sustainable public procurement. Government ministries and departments should develop clear institutional arrangements, policies, and guidelines that incorporate environmental and social considerations into procurement decision-making. Ministries may also formulate industry-specific procurement policies that integrate sustainability indicators such as life-cycle assessments, eco-labels and certifications, waste reduction practices, and the use of sustainable materials. In addition, procurement policies should incorporate socially responsible indicators, including fair labour practices, promotion of local sourcing, codes of conduct for suppliers, workplace safety, and gender-responsive procurement strategies. Such measures would help align procurement processes with national commitments on environmental protection, social inclusion, and sustainable development.

Successful implementation of sustainable public procurement requires a robust performance measurement and reporting mechanism. Digital procurement platforms such as ePADS would play a crucial role in improving access to information, monitoring compliance, and facilitating data-driven decision-making. By embedding sustainability into procurement policies, Pakistan can transform public spending into a powerful driver of green growth, environmental protection, and inclusive development.

The writer is Director (Monitoring & Evaluation) of the Public Procurement Regulatory Authority, Islamabad.