By Charles Rice and Julia Marvin
The U.N. released its 2013 Annual Statistical Report on Procurement on July 10, and the report provides some useful insights into trends in U.N. procurement practice. As defined by the CSIS Report, A New Development Agenda, procurement is the “purchasing of goods and services, including all government expenditures except staff costs and transfer payments, for the benefit of a government agency or other public authority.” In recent years, there has been a recognition of procurement’s potential development impact, particularly when sourced from emerging or transition economies.
- Total United Nations Procurement is growing
United Nations procurement rose again this year to $16.08 billion, and has risen a total of 16.6 percent since 2009. UN and global procurement spending continues to grow, meaning there is a greater potential development impact from responsible and sustainably sourced procurement. Sourcing procurement from developing and transition economies offers economic opportunity to local vendors, but also a window to increase transparency, efficiency, and fairness in the public procurement systems of developing economies. As the U.N. begins to consider procurement in relation to its broader mandate, we can expect procurement to be a development focus for years to come.
- Sustainable Procurement is a U.N. Focus
The U.N. has rhetorically recognized the value of sustainable procurement since the Johannesburg Declaration on Sustainable Development was adopted in 2002, however it has taken longer for the organization to standardize sustainable procurement (SP) reporting practices. The sustainable procurement reporting framework aims to integrate positive environmental, social, and economic impacts of procurement by emphasizing the areas of “policy and strategy, sustainability integration in the procurement process, and internal capacity building, and supply chain development.” This year 27 of 33 U.N. organizations engaged in SP reporting, the first year more than 50 percent of U.N. organizations have done so.
- More Sourcing Through the Global Compact
The U.N. Global Compact is a voluntary corporate sustainability initiative launched in 2000, and mandates responsible development, implementation, and disclosure of sustainable policies and practices for all signatory members. Participants agree to observe 10 core principles in the areas of human rights, labor, the environment, and anti-corruption. Today the Global Compact has over 12,000 participants in 145 countries and is the largest such corporate sustainability initiative in the world. The U.N. has steadily sourced a greater percentage of total procurement from Global Compact members, indicating progress towards the overall goal of more sustainable procurement practice. CSIS convened a Chevron Forum in February to discuss the Global Compact and its impact.
- Global Compact Performance Varies by Region
The majority of procurement from Global Compact members occurs in developed countries. This is unsurprising, given that developed countries tend to have suppliers more capable of meeting Global Compact expectations for sustainable practices and reporting. Europe and North America lead the way at 47 percent and 25 percent of procurement from Global Compact members respectively, however the greatest annual increase in Global Compact procurement occurred in Asia. The African as well as Central and South American regions are lagging behind on this statistic, and in fact, have decreased the share of procurement sourced from Global Compact members in recent years. Increasing Global Compact procurement in the developing world should be a priority for the U.N. moving forward, because it is in these regions that responsible corporate practice can have the largest development impact.
All charts were taken from the 2013 Annual Statistical Report on United Nations Procurement.
Charles Rice is a Research Assistant with the Project for Prosperity and Development at CSIS.
Julia Marvin is a researcher with the Project for Prosperity and Development at CSIS.