Towards a more Circular Economy: Proposing a framework linking sustainable public procurement and sustainable business models

TLDR

Sustainability seeks long‑term environmental and socio‑economic solutions, yet most research has focused on environmental issues; the emerging Circular Economy concept aims to transform waste into resources and bridge production and consumption, but research on its practical aspects remains limited. This paper links public procurement to sustainable business models, proposing a shift from product‑selling to service‑oriented procurement. The authors propose a collaborative framework that incorporates technical, non‑technical, socio‑cultural, and proximity specifications to enhance resource efficiency and support sustainable business models. Collaboration between procurers and suppliers extends relationships, cuts raw material use and waste, and fosters new sustainable business models.

Abstract

Sustainability aims at addressing environmental and socio-economic issues in the long term. In general, the literature on sustainability has focused mainly on the environmental issues, whereas, more recently, a Circular Economy has been proposed as one of the latest concepts for addressing both the environmental and socio-economic issues. A Circular Economy aims at transforming waste into resources and on bridging production and consumption activities; however, there is still limited research focusing on these aspects. This paper addresses the link between procurement and supply practices, and proposes changing from a traditional public procurement process, based on product-selling business models, to a more service-oriented system. The paper proposes a framework to include technical and non-technical specifications of product/service combinations that improve resource usage efficiency through recovery. The framework also considers socio-cultural specifications and physical and social proximity between the stakeholders in the procurement process. The framework is based on collaboration, which is a vital link between the public procurement process and the development of more sustainable business models, where the experience gained in the collaboration process serves as the bases for suppliers and procurers in improving their contribution to CE, whilst at the same time securing economic benefits for both parties. Although, in this process, the specification setting may take longer, the relationships between procurer and supplier tend to be longer lasting and stronger. This research shows that collaboration between procurers and suppliers throughout the procurement process can lead to reductions in raw material utilisation and waste generation, whilst promoting the development of new, more sustainable, business models.