Green procurement: A complete guide for businesses in 2025

Green procurement is not just a passing trend; it is a better way to purchase items that mitigates your environmental impact and enhances your sustainability. In this blog, we’ll discuss what green procurement actually is and why it is important. We will look at the concept of green public procurement and investigate the reasoning for green purchasing, and how businesses can effectively form policies. Finally, we will look ahead to the future of it and it’s role in growing sustainable businesses.

What is green procurement?

Green procurement refers to when organizations procure goods, services, or works with a commitment to reducing environmental impact over the life cycle, rather than simply purchasing based on price and quality. To determine priorities, green procurement incorporates energy efficiency, recycled content, use of renewable resources, and reduced emissions into purchasing decisions. The intent of the approach to develop buying decisions is to enable sustainable buying. For example, in procuring materials, whether they are eco-friendly, with suppliers who demonstrate responsible practices, or materials designed for reuse and recycling. 

What is green public procurement?

Green public procurement describes the way in which governments and organizations in the public sector use their purchasing power and sustainable options to make environmentally friendly choices for superior goods and services. The public sector tends to be one of the largest consumers in most economies, and so the decisions made can be very powerful examples for businesses and citizens to emulate. 

Green public procurement takes purchasing decisions beyond just price to encourage suppliers to provide products and services that critically consider the environmental footprint, which includes product energy efficiency, material recyclability, toxicity, and sustainable resources. These options could look like a government purchasing electric public transport buses, or using recycled paper in offices, or giving preference to contractors that meet green building standards. 

By integrating green public procurement into their practices, governments are making a difference not only in reduced environmental impacts, but also creating markets for sustainable products, spur innovation, and encouraging private sector businesses to go greener.

Green purchasing and its importance? 

Green purchasing is not just a “green” option; it is an intelligent and proactive purchasing method. Companies can dramatically reduce their environmental impact while also purchasing items that are energy-efficient, recyclable, non-toxic, and made with sustainable resources. By choosing greener products and services, companies can reduce their impact on Mother Earth and also save themselves money over time. 

Here are the top 10 reasons why green purchasing is important:

Reduce environmental impact 

Choosing eco-friendly products and services reduces pollution and greenhouse gas emissions, reduces landfill waste, and is integral to improving the environment.

Supports sustainability initiatives 

Green purchasing is an integral element of corporate social responsibility (CSR) and ESG goals, making it easier for companies to show progress on sustainability initiatives.

Encourages innovation 

As demand for greener products and services increases, it encourages greater innovation from suppliers looking to create and offer greener technologies, materials, and approaches that are more efficient and less harmful to the environment.

Saves energy and resources 

Many green purchases, such as energy-efficient products, water-efficient fixtures, and energy-saving equipment, not only reduce utilization by purchasing more efficient products, but the costs over the life of use are fantastic savings, and far more than you think.

Enhances brand reputation 

Customers and stakeholders want to work with businesses that are sustainability-focused, which improves trust levels and increases market competitiveness. 

Complies with regulations 

With the increasing amount of environmental regulations, green purchasing will allow businesses to stay compliant, maintain a positive brand image, and avoid potential fines due to non-compliance. 

Creates cost savings 

While green products often have higher upfront costs, their longer lifespan, efficiencies, and lower disposal costs often lead to savings over their lifecycle. 

Supports supplier stewardship 

By supporting suppliers that are adopting green practices, businesses are encouraging their supply chain to do the same through ethical, sustainable, and socially responsible practices. 

Encourages circularity 

Green purchasing has a focus on products that are reusable, recyclable, or durable, which creates minimal waste and maximizes the life cycle of the products. 

Protects future generations 

In a world with quickly depleting resources, every time you make a green purchasing decision, you are helping to conserve resources and provide future generations with a cleaner and healthier planet.

These top 10 reasons demonstrate that sustainability and sound business decisions can go hand in hand to change outcomes for the planet and your business’s bottom line.

Building a green procurement policy

A green procurement policy is a written policy that helps an organization to formally recognize the decisions it makes when it comes to purchases, such as environmental or ecological purchasing goals. The policy provides specific standards, priorities, and processes to employ so that organizations can evaluate environmental, social, and economic impacts when buying goods and services.

When developing a policy, the first step should be to evaluate how the organization is procuring goods or services and identify opportunities to address sustainability. These opportunities may include selecting energy-efficient products, making purchasing decisions based on savings found in examining resources, selecting suppliers based on eco-friendly practices for delivered materials, considering packaging waste when making procurement decisions, and identifying recyclable or renewable materials.

A solid policy will also identify measurable goals, assign responsibility, and explain how progress will be monitored and reported. Providing training to employees and suppliers that acknowledges these practices will not only build consistency but will also help the organization build sustainability into everyday purchasing decisions.

When organizations implement a green procurement policy, they can reduce environmental impact, promote supply chain innovation, and market their commitment to sustainability and future growth.

Green procurement guidelines for businesses

Green procurement guidelines are key to supporting business decisions that are environmentally responsible while remaining efficient, cost-effective, and enhancing sustainability. The guidelines amplify an intentional way to proactively ensure that every purchase is an environmentally responsible decision, aligned with the organization’s broader strategies. Privately adopting these practices will assist organizations in reducing their carbon footprint, fostering greater innovation amongst suppliers, and demonstrating the continued commitment to creating sustainable growth.

Each business should have its own sustainable and environmentally responsible policy, and the following should be included within the policy for procurement guidelines:

1. Clearly defined sustainability standards

Create specific sustainable environmental criteria for all procurement activities, addressing: energy efficiency, renewable resources, recyclability, low emissions, and chemically non-toxic materials. Clear standards will support employees in deciding on sustainable purchasing habits that are predictable and simple. 

2. Evaluate supplier sustainability processes

None of their sources of material or production elevates the human condition in other parts or realms of the world. Support those suppliers who are environmentally and sustainably producing, have ethically sourced input material, or show a link to sustainability with transparency. The sustainability of suppliers is just as important as the products or services being purchased that may be labeled as “green,” with organizations supporting responsible supply chains.

3. Think about the whole product lifecycle.

Think about products and services not just when they are purchased, but throughout their entire lifecycle. Assess how things are made, used, maintained, and then (usually) disposed of (or recycled?). Lifecycle thinking allows you to make choices that minimise waste, energy, and resources and support long-lasting sustainability.

4. Be conscious of eco-friendly options.

Use products and services that have been designed to have minimal environmental impacts. Examples are: energy-efficient household appliances, reusable or recyclable products, and items with a lower carbon footprint. Putting eco-friendly options first helps signal to suppliers that we want to create new eco-innovations and that we also want these options to be available in the marketplace.

5. Think green in your procurement process.

Include the green requirements in the procurement process, tenders, and contracts. Making the environmental criteria a formal part of the purchasing policies will have businesses take sustainability into account in their everyday purchasing decisions and help to integrate sustainability into the organization.

6. Track, measure, and report on performance.

It is important to keep track of recruitment decisions and report on them to determine your performance against sustainability goals. Monitoring key metrics can help organizations evaluate areas of improvement, share those results with individuals and stakeholders, and hold the organization to account for achieving t targets.

7. Train employees and stakeholders

Provide education and training on green procurement practices to your procurement teams, employees, and suppliers. Awareness and training are key to a consistent approach across the organization and for embedding sustainability within the culture of the company.

8. Promote collaboration and innovation

Collaborate with your suppliers to develop eco-friendly products, consider sustainable alternatives, and work together to improve procurement processes. Collaborative action creates and fosters innovation and builds strong supplier relationships, thereby expanding the scope of green procurement practices.

9. Review and update guidelines annually

Sustainability standards and technologies are fluid and developing. As such, consistent review of purchasing policies can support organizations’ efforts to follow best practices, remain in compliance with new regulations, and consistently evaluate new green products.

In step with these all-encompassing the guidelines, businesses can make environmentally responsible purchasing decisions that reduce their impacts, where possible, support sustainable development, and create long-term benefits and value for themselves and the planet.

Real-world green procurement examples

Examples show how organizations are making environmentally responsible decisions in ways that help them achieve their business objectives. The following five are standout examples to follow:

IKEA: Sustainable Materials

IKEA sources wood, paper, and cotton from sustainable sources, which limits the impact of deforestation and promotes sustainable supply chains.

Unilever: Eco-Friendly Packaging

Unilever uses recyclable and biodegradable packaging, which protects the environment from plastic waste, as well as promotes sustainable practices amongst suppliers and consumers alike.

The Government of Canada: Green Public Procurement

The Canadian government demonstrates pride in purchasing energy-efficient equipment, low-emission vehicles, and green office supplies. This www.redrivercollege.ca is demonstrating to its public institutions at all levels what is a best practice for public institutions.

Apple: Renewable Energy Use in Supply Chain

Apple requires its suppliers to use renewable energy in the manufacture of products to minimize the overall impact of Apple both in terms of its corporate carbon footprint.

Starbucks: Ethical Coffee Sourcing

Starbucks sources coffee beans from farms under sustainable agriculture certification programs like Fair Trade and Rainforest Alliance, which aligns the company with environmental sustainability and social responsibility.

These examples of green procurement are examples of how businesses and governments can take sustainability into consideration when making procurement decisions, as well as limit environmental impacts and increase innovation in entire supply chains.

Benefits of green procurement

While it can offer many benefits for businesses, governments, and organizations, it can also come with challenges that need to be managed. Awareness of both the benefits and the challenges can help organizations make informed procurement decisions and implement sustainable development practices. 

Title	Description
Environmental protection	Choosing eco-friendly products and services reduces waste, lowers emissions, and conserves natural resources.
Cost savings in the long run	Energy-efficient, durable, and recyclable products can reduce operational and disposal costs over time.
Enhanced brand reputation	Organizations that prioritize sustainability build trust with customers, investors, and stakeholders.
Compliance with regulations	Itt ensures alignment with environmental laws and standards, avoiding fines and penalties.
Encourages supplier innovation	Demand for greener products motivates suppliers to develop sustainable materials, processes, and technologies.
Supports corporate sustainability goals	Integrating green procurement helps achieve CSR and ESG objectives.
Promotes a circular economy	By prioritizing reusable, recyclable, and durable products, businesses contribute to resource efficiency.

Challenges of green procurement

Title	Description
Higher upfront costs	Some sustainable products may initially be more expensive than their non-sustainable counterpart.
Limited availability	Some sustainable products or sustainable suppliers may not be available in all locations due to regional supply chain limitations.
Lack of awareness	Employees, procurement staff, or suppliers may not entirely grasp all of the principles.
Measuring impact	Identifying and measuring the environmental benefits and decisions can be complicated.
Resistance to change	Organizations may face internal barriers when transitioning from traditional purchasing practices to sustainable purchasing alternatives.

Despite these challenges, the benefits of green procurement often outweigh the drawbacks, making it a strategic approach that supports both environmental responsibility and long-term business value.

Conclusion: The future of green procurement

Green procurement is rapidly becoming fundamental for organizations and governments wishing to balance economic growth with sustainability. From green public procurement to green purchasing in daily business, it is possible for organizations to create a lower environmental impact, achieve savings, and advance their reputation. With strong policies, authoritative guidelines, and solid examples to follow, many challenges can be resolved. The future rests with innovation, collaboration, and commitment, and poses a powerful way forward to a greener and more sustainable future.