How to incorporate ESG criteria into e-auctions

According to our analysis, contracting authorities today approach the inclusion of ESG criteria in e-auctions in various ways.

We find differences mainly in three areas:

(1) Weight of the ESG criterion – In some cases, ESG is just a small part of the overall evaluation (a token effort to “tick the box”), while elsewhere it carries a weight of x% or even more. This has a significant impact on the dynamics of the tender and the level of interest from participants.

(2) Method of including ESG points – Some contracting authorities treat them as a knockout criterion (pass/fail), others use a bonus/malus directly in the auction, where a better ESG score means a price advantage and a worse one a disadvantage that can be compensated by a lower price. The advantage is transparency, the disadvantage is the ease with which bidders can manipulate it.

(3) Transparency – ESG can be reflected already during the live auction (point (2)) or only after the auction ends, when recalculating the results.

There is no single right solution, because each setup affects the tender differently and can contribute to the contracting authority’s legitimate objectives.

If you are looking for the right approach for your case, talk to the experts at Promitea (including myself: jan.vasek@promitea.com). We will be happy to show you different configuration options on a concrete example and advise you on when each is suitable. For our customers, we also provide a unique study on current best practices.

Promitea is not just procurement software — you also gain know-how and access to solutions that save you a lot of money and time. As with all other procurement challenges, you could certainly figure it out yourself, but why, when Promitea has already explored it and turned it into best practice?