The Green Public Procurement in the midst of the economic crisis: is it a suitable policy tool?

Abstract

The aim of this paper is to examine the response of managers, in the case where the government incorporates certain environmental criteria into public procurement. Some research hypotheses are statistically tested in order to identify the extent of managers' understanding regarding Green Public Procurement mainly under the severe financial conditions of the current economic crisis, during which time public expenditures should gradually be cut due to the flagship policy of the European Union for severe austerity measures. The data were taken from various pieces of research carried out in Greece and Cyprus, two countries which are suffering from an economic crisis and are operating under economic supervision with severe austerity measures. The study highlights that given the current economic climate, managers consider the Green Public Procurement a very weak tool to encourage the adoption of environmental management practices due to the austerity measures and budgetary cuts. They also claimed that the classical policy tools (e.g. environmental legislation and market-based instruments) might shape an unsustainable environment for their future operations and additional measures would force them out of market.

Keywords::

• environmental policy
• corporate environmental management
• corporate sustainability
• sustainable development

1. Introduction

Over the last decades, many governments have enacted certain environmental policy tools to cope with growing environmental problems such as climate change, soil degradation and water scarcity. Environmental policy tools aim either to stimulate or to enforce firms and consumers to behave in an environmentally friendly manner. The current literature classifies environmental policy mainly into three general categories: (1) command and control tools (e.g. legislation and standards), (2) market-based tools (e.g. energy taxes, subsidies, tradable permits) and (3) voluntary tools (e.g. incentives to implement ISO 14001) (van Soet 2005; Tsireme et al. 2012). Li and Geiser (2005) argue that an environmentally responsible public procurement process could be another proper environmental policy tool for governments that might encourage firms to incorporate an environmentally responsible product strategy.

Even though the influence of such policy tools on corporate and consumer behaviour has been widely examined (Tsireme et al. 2012), little attention has been given to Green Public Procurement (GPP) as a policy tool. The mainstream literature seems to focus mainly on examining government procedures for incorporating certain criteria in order to green their procurement and public purchasing, for a variety of products (Parikka-Alhola 2008; Palmujoki et al. 2010). Parikka-Alhola (2008) investigates certain environmental criteria achieved by furniture firms which supply public organizations such as schools, hospitals and universities. Varnas et al. (2009) explore the barriers and challenges faced by public organizations when incorporating environmental criteria into the contracts of the construction industry for public projects. Michelsen and de Boer (2009) identify certain environmental criteria that are essential for public contracts and point out some of them were taken into consideration by public organizations once selected their suppliers. Palmujoki et al. (2010) examine a number of environmental criteria in public procurement contracts and calls for tender.

A number of international organizations consider that GPP could play a crucial role in encouraging firms to be environmentally friendly by implementing certain environmental management practices. The Organization for Economic Cooperation and Development (OECD 2003) highlights that GPP could provide the appropriate context in order for firms to develop new technological and production (radical or improved) innovations in the field of environmental services. Similarly, the European Commission (EU 2006) conducted a survey of 25 member states regarding their GPP status which identified that there is a high possibility to create incentives for firms to implement environmental management systems (EMSs). The United Nations (UN 2012) support that the GPP implementation will contribute to natural environment preservation and economic growth. In particular, the GPP will assist governments in reducing CO₂ emissions, protecting water and energy resources, alleviating poverty, equity and cohesion problems, and finally gaining technological innovations.

However, a limited number of studies have been carried out to examine to what extent the GPP implementation will play a critical role in the decisions of managers to invest in environmental management practices. This paper aims to address the following issues: (1) the views of managers regarding the influence of a GPP policy on their decisions to green firms' procedures or products, (2) the current value of GPP policy given the economic crisis and rigorous fiscal measures and (3) the additional and supportive governmental policies in conjunction with GPP that make it beneficial for managers. To answer the first issue, a set of questions were designed regarding the potential barriers and opportunities that are considered significant in order for a GPP policy to play a crucial role in their decisions. The second issue is indirectly answered by the selection of two countries (from a total of three), members of the EU, which are currently operating under a strict fiscal and financial setting. The selection of these countries endeavors to examine how managers view the power of GPP when the current purchasing power of government is weakening. The third issue is answered by asking managers about an array of additional policies within a GPP context which could encourage them to adopt environmental management even during an economic downturn. Finally, this paper provides some important issues for future research. In particular, a re-examination of traditional environmental policy tools could be made in order to identify the power of GPP in the future as a driving force of firms and the effects of legislation requirements and environmental taxes on firms' decisions are necessary.

The rest of the paper is structured in four sections. Section 1 provides a short description of the field of GPP through academic and institutional documents. Section 2 develops the methodology and the significant research questions. Section 3 provides the findings of this research and a discussion which includes the current literature. Finally, in Section 4 the conclusions are presented.

2. Theoretical background

This section analyses the relative literature of GPP and its potential influence on managers/owners behaviour to adopt environmental management practices such as EMSs and clean technologies. It is then separated in three general parts: (1) a short introduction of GPP, (2) an analysis of GPP effects on small and medium sized enterprises (SMEs) to adopt environmental management practices and (3) an examination of some additional public policies for public procurement in order to encourage SMEs to adopt another type of management strategy or production pattern.

2.1 A short description of GPP

The GPP was officially introduced at the conference of the UN for ‘Environment and Development’ in Rio in 1992. Its seminal document, Agenda 21 (paragraphs 4.23, 4.24, 4.25, 4.26) emphasizes that the greening of government purchases and government programmes could be very significant for public policies to introduce the main principles of sustainable development (e.g. economy, environment and society). Several international organizations and scholars also highlight that GPP is likely to play a key role in the overall environmental policy since it may stimulate firms to adopt voluntary environmental management practices to increase their share in public procurement. The EC (2012) provided an executive report to cultivate the GPP idea in its member states and offer a GPP Toolkit to facilitate their attempts to introduce the essential environmental criteria into their calls for tender.

Several countries (members of the OECD and EU) have spent at least 20% of their gross domestic product (GDP) on public procurement which demonstrates the power the government has to induce firms to act in a more environmentally friendly manner and thus gain a competitive edge when cooperating with the government (Marron 2003; Nissinen et al. 2009). Parikka-Alhola (2008) also argues that GPP might be a promising policy to provide incentives for firms in the furniture sector to produce environmentally sound furniture. The GPP implies that state-owned organizations and public authorities should set specific environmental criteria when they make expenditures to acquire the most essential materials for their operations. Numerous studies have provided several tools to evaluate the extent to which calls for tender and public contracts have introduced certain environmentally friendly criteria (Day 2005). The environmental criteria of GPP vary according to country and sector (Günther and Scheibe 2006; Varnas et al. 2009; Taranini et al. 2011).

2.2 The effect of GPP on firms

A number of studies have suggested that public authorities should introduce various environmental criteria into their procurement, so as to achieve the principle of sustainable development and to promote environmentally friendly firms (Li and Geiser 2005; Preuss 2009; Walker and Brammer 2009). The GPP might be a suitable tool to facilitate a shift in operations from conventional to environmentally friendly under some particular premises, such as the level of previous knowledge of the public authorities regarding environmental issues, the existence of an appropriate external environmental consultancy, the extent of public expenditures and any previous successes on the part of public authorities in any environmental management project (Michelsen and de Boer 2009; Testa et al. 2012).

Walker and Brammer (2009) consider the implementation of a CSR/sustainability strategy and ISO 14001 by public authorities as very important as it implies that staff and top management are familiar with environmental issues and use their existing essential infrastructures and teamwork to build a new innovative environmental strategy. The consequence of GPP on firms' decisions is directly associated with the size of public authority expenditures (Preuss 2009).

2.3 Supportive public policies

Currently, public procurement in general or GPP in particular seem to be losing their powers as a policy tool to stimulate economic growth or to tackle environmental problems by encouraging firms to implement environmentally friendly strategies. This is a result of public budget cuts and austerity measures which were implemented in a range of European countries after the start of the present financial crisis (Ait-Sahalia et al. 2012). Apart from the current tendency to decrease public expenditure, some significant former weaknesses also need to be solved. Thomson and Jackson (2007) suggest that certain guidance, standards and life cycle analysis (LCA) thinking information could be developed in order to assist public authorities in the uptake of environmental requirements into procurement procedures to overcome the basic barriers that they face.

Additionally, essential infrastructure and regional structures might be prepared in order to strengthen cooperation between the public authorities concerning environmental issues and to encourage the hiring of environmental experts. Preuss (2009) classifies some important local initiatives valuable in fostering economic and environmental development such as the establishment of a web-based business forum which could provide details of current public contracts, the development of an agency for information regarding financial tools and the preparation of guides for green entrepreneurship. A range of guides on the conduct of staff and the criteria used for selecting green products have also been offered by public authorities.

3. Methodology

This section outlines the methodology used. It consists of five main sub-sections. The first section includes the research framework which indicates the baseline of the research strategy, the coherence and the sequence of different aspects of scientific inquiry. The second section describes the basic research questions that arise from the research framework. The thord section deals with the collection of essential data from a questionnaire survey in a sample of Greek and Cypriot firms. In the fourth section an analysis of key elements regarding the questionnaire is made and the final section includes a short presentation of statistical tests and variables used.

3.1 Research framework

Apart from the theory behind the environmental policy tools (e.g. environmental regulation and economic instruments), they seem to encourage firms to move from conventional to environmentally friendly behaviour. In addition to these traditional environmental policy tools, GPP has been proposed as an essential tool to encourage firms to adopt environmentally friendly strategies. Figure 1 illustrates the research framework of the paper. Initially, the influence of GPP on managers' decisions to adopt environmentally friendly behaviour was examined and the types of environmental criteria that are considered essential to include in public contracts. The impacts of GPP are analysed according to command and control and market-based tools for identifying the relative significance of GPP on managers' decisions.

Figure 1 Research framework.

The managers who took part in this research have been classified in two main categories. The first category only includes managers dependent on public expenditures (public dependence [PD]) as suppliers of local public authorities and the second category encompasses managers who have environmental awareness (EA). Each category only includes managers with a single attribute either public dependence or environmental awareness. This distinction between managers was made prior to the circulation of the questionnaire. In particular, research has been conducted in the public authorities of the research areas to identify which firms do business with them, thus identifying which companies are dependent on public procurement contracts. The second group (levels of environmental awareness) was identified from non-dependent firms which gave positive answers to a range of environmental topics (e.g. about EMSs, energy savings, climate change). The selection of the firms sampled was based on the level of dependence of firms on state-owned (local or national) organizations.

In particular, the Greek sample consisted of 76.9% men and 23.1% women, while the Cypriot sample included 84.4% men and 15.6% women. The age of the respondents range from 25 to 70 years and particularly 11% were under 29 years, 34% between 29 and 39 years, 29% between 39 and 49 years, 20% between 49 and 59 years and 6% over 60 years. A crucial factor is the variation in educational attainment among respondents, 17% of the sample had secondary school education, 46% had a university degree and 37% had a PhD degree. The respondents were mainly managers or owners of firms. Figure 2 shows the educational level of respondents. The majority of the respondents were engineers (49%) and economists (30%), while a limited number had studied environmental sciences (3%) (Figure 2).

Figure 2 Educational level of respondents.

The overall sample (Greece and Cyprus) consists of SMEs. Figure 3 indicates that 77% employ up to 20 employees, 11% from 21 to 50 employees, 7% between 51 and 100 employees and, finally, only 5% between 101 and 500 employees.

Figure 3 The size of sampled firms.

3.2 Research questions

The influence of environmental policy tools on firms' decisions to invest in environmentally friendly strategies is a key issue in corporate environmental management literature (Khanna and Anton 2002; Tsireme et al. 2012). As previously mentioned, a number of institutional documents provide normative indications to this debate regarding the leverage character of GPP on the environmentally friendly strategies of firms (OECD 2003; UNEP 2003). In examining the impact of GPP on firms' decisions, it is necessary to compare it with the most classical policy tools such as command and control and market-based tools. Thus, a rational research question is as follows:

Research question 1.1: How significant a factor is the GPP for public procurement-dependent firms in the adoption of environmental management practices in relation to other policy tools?

Research question 1.2: How significant a factor is the GPP for environmentally aware firms in the adoption of environmental management practices in relation to other traditional policy tools?

Under certain conditions, public policy tools might be good for persuading firms to change their behaviour (OECD 2003). What will happen if the impact of the current financial crisis on the financial structure of firms is severe and the central policy of various countries is to decrease public procurement? The question is if there are some additional governmental supporting policies which will assist GPP in having a key role in corporate environmental management such as web-based platforms, information-based policies and financial support systems.

Research question 2.1: What are the most appropriate supportive policies which stimulate public procurement-dependent managers to adopt environmental management practices?

Research question 2.2: What are the most appropriate supportive policies which stimulate environmentally aware managers to adopt environmental management practices?

The environmental criteria that are introduced into public contracts and calls for tender, seem to be very essential for the types of environmental strategies which are undertaken by firms and play a critical role in structuring their financial position. To clarify what their preferences are regarding environmental criteria, some research questions were formed.

Research question 3.1: What do public procurement-dependent managers consider the most vital environmental criteria for inclusion in public contracts?

Research question 3.2: What do environmentally aware managers consider the most vital environmental criteria for inclusion in public contracts?

3.3 Data collection

The data used in this research were drawn from a questionnaire survey conducted in Greece and Cyprus. These countries were selected due to their difficult economic conjuncture which led to an economic memorandum with the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB). The Greek general government deficit has gradually been increasing since 2008 (e.g. in 2008, it was 5% of GDP; Shambaugh et al. 2012; EC 2012). Thus, on the 3 March 2011 the Greek government in cooperation with the above organizations signed the first package of austerity measures in order to consolidate their fiscal policy (Matsaganis 2001). Despite the differences in origin and reasons for economic crisis in Cyprus, a similar economic adjustment programme was prepared with the EU, ECB and IMF (EC 2013). Shambaugh et al. (2012) show a sharp cut in government spending in all EU member states including Greece and Cyprus.

The questionnaire was only circulated in Northern Greece and the surrounding area of Nicosia (Cyprus) during 2013. The distribution of the questionnaire was made by email and face-to-face meetings. A web-based questionnaire was generated in order to facilitate responses through a Google application. The questionnaire consists of five key sections. The first includes questions on the knowledge of respondents of various environmental management practices. Particular questions look to identify how respondents are informed about Environmental Management and Audit Schemes (EMAS), ISO 14001, eco-labels and other environmental management practices. Other questions aim to examine the level of knowledge about public procurement and GPP. The second section examines to what extent various incentives are considered important by respondents. Here, a number of questions aim to explore the views of respondents on the various incentives, such as meeting the consumption habits of consumers, to comply with the GPP requirements and environmental legislation. The third derives information regarding the environmental criteria which respondents believe should be introduced into public contracts. This section asked respondents to answer questions as follows: what from the following criteria do you consider significant to include in public contracts such as recycled products, organic products and the use of renewable energy. The following section consists of questions which aim to explore respondents' level of awareness and understanding of certain additional and supportive policies of GPP. A number of questions attempt to reveal the views of respondents regarding the significance of some additional educational programmes for staff and a web-based platform for promoting green products. The final section encompasses questions which provide the demographic data of respondents (Table 1 contains a description of each variable and data collected from the questionnaire). This section highlights information regarding the gender, educational level, staff position and other demographic characteristics of the sample. The majority of these questions were measured on a five-point Likert scale from 1 (not at all) to 5 (very much). Only a limited number were based on two-point scale with 1 ‘No’ and 2 ‘Yes’.

Table 1 Variable description.

Variable	Description	Mean	SD
ENVIPRO	The importance of environmental problems	4.88	0.94
EURODIR	The knowledge of the European Guides of green purchasing	2.49	1.49
ENVISTR1	The knowledge about EMSs	2.27	1.32
ENVISTR2	The knowledge about eco-label	2.33	1.4
ENVISTR3	The knowledge of energy saving criteria	3.04	1.37
ENVISTR4	The knowledge of GPP To°lkit	1.5	0.91
ENVISTR5	The knowledge of national action plan of GPP,	1.64	1.049
SUPO	The dependence to public procurement	1.4	0.49
PEPO	The percentage of dependence; 1 ( < 25%), 2 (25–50%), 3 (>50%)	1.3	0.61
BROGO	The public authority sector	1.7	0.93
ENVICRI	The environmental criteria in the public contracts	1.53	0.5
PEENCR	The environmental criteria percentage in the public contract; 1 ( < 5%), 2 (5–25%), 3 (>25%)	1.77	0.77
IMMOTIV1	The public resources saving	3.54	1.26
IMMOTIV2	The decrease of carbon footprint	3.62	1.14
IMMOTIV3	The decrease of environmental impacts	4.13	1.06
IMMOTIV4	To meet the demand of environmental awareness consumers	3.77	1.08
IMMOTIV5	To compliance with GPP requirements	3.82	1.01
IMMOTIV6	To compliance with environmental legislation	3.94	1
IMMOTIV7	To create new innovations	3.76	1.19
IMMOTIV8	To promote green products by public authorities	3.61	1.32
IMMOTIV9	To take subsidies	3.98	1.17
IMMOTIV10	To make good working conditions	3.94	1.02
IMMOTIV11	The existence of environmental criteria in public contracts	3.81	1.1
IMMOTIV12	The harshness of environmental criteria in public contracts	3.86	1.17
IMMOTIV13	The improvement of corporate profile	4.17	0.89
CRITERIA1	The recycle materials	3.92	1.12
CRITERIA2	The energy saving devices	4.29	0.96
CRITERIA3	The biological products	3.9	1.1
CRITERIA4	The use of renewable energy	4.3	1.03
CRITERIA5	EMS-certified suppliers	3.9	1.01
CRITERIA6	Eco-labelled furniture	3.7	1.1
STRADO1	Environmental awareness of staff	4.05	1.06
STRADO2	Suitable environmental educational programmes	4.08	1
STRADO3	Third party environmental certification	3.93	1
STRADO4	The consumers awareness regarding environmental products	4.26	1
STRADO5	Web-based platform to promote environmental products	4.11	1.04

A total of 800 questionnaires were given to specific Greek and Cypriot SMEs and only 90 valid questionnaires were received, which fulfilled either the criterion of environmental awareness or of dependence on government procurement. Not taking into account that the response rate was 20%, a smaller sample was utilized (approximately 10.5%) in order to avoid potential interactions among the samples, such as to examine managers who have environmental awareness and high dependence on expenditures. Fifty per cent of the questionnaires came from Greece and 50% from Cyprus. The response rate is acceptable and in accordance with previous studies in corporate environmental management literature (Melnyk et al. 2003; Johnstone and Labonne 2009). However, it is worth pointing out that the period during which this study was conducted was characterized by severe financial crisis and the majority of SMEs were reluctant to answer questions concerning environmental issues while fighting for their primary financial goals.

3.4 Variables description

Table 1 shows the key variables used in this paper with average and standard deviation. These variables are compared by using the Mann–Whitney U-test to confirm the research questions mentioned above. It is a non-parametric test which helps to compare differences between two independent samples when their dependent variables are not normally distributed (Oja and Hannu 2010; Gorder and Foreman 2014). Especially, the variable ENVIPRO refers to the importance and severity of environmental problems, while EURODIR deals with the respondents' knowledge regarding European guides such as ‘Purchasing Green’ and ‘Procura+’. The variables ENVISTR (i) (where i = 1,…, 5) disclose information on the respondents' knowledge about a number of present environmental practices. For example, the variable ENVISTR1 examines the level of respondents' knowledge of EMSs (i.e. ISO 14001, EMAS), while the variables ENVISTR2 and ENVISTR3 recognize the level of knowledge about the European eco-labelling flower symbol and energy savings criteria (e.g. energy star). Similarly, the variables ENVISTR4 and ENVISTR5 examine the level of respondents' knowledge regarding the EU Toolkit for GPP and the national plan for GPP.

To examine the dependence of respondents (firms) on the public procurement, the variable SUPO was utilized, while the variable PEPO examines to what extent (the percentage) their sales are dependent on public expenditures. Similarly, an investigation was conducted to identify the type of public authorities they have supplied (variable BROGO). The variable ENVICRI examines the green status of public contracts and the variable PEENCR calculates the precise percentage of environmental criteria covered by the public contracts the respondents have signed. The incentives variables (IMMOTIV (j), where j = 1,…, 13) look to identify the sensitivity of respondents to both the implementation of GPP and other environmental policy tools. Finally, the variables CRITERIA (k) (where k = 1,…, 6) examine what criteria respondents considered crucial and thus should be incorporated into the public contracts such as eco-labelling and organic products. The importance of certain additional governmental policies (STRADO [l], where l = 1,…, 5) are also examined.

4. Results and discussion

To answer the research questions developed in the previous section, respondents were divided in two categories: those with knowledge of environmental issues and those who depend on public procurements. This distinction was deemed necessary in the context of this paper in order to identify either the influence of public policy on managers' decisions or self-regulated incentives. Even though a further division of the sample into additional types of managers (e.g. both environmental knowledge and public procurement dependence) might shed more light on this field, the current sample was not large enough to provide opportunities for further separations. Table 2 shows the allocation of Greek and Cypriot respondents regarding their dependence on public procurement.

Table 2 Public dependence firms (SUPO).

Nationality	Yes	No	Total
Greek managers	56.4	43.6	100
Cypriot managers	62.2	37.8	100

Additionally, Table 3 shows the extent of dependence on public procurement. More specifically, of the Greek managers who supply public authorities, 81.8% supply less than 25% of their total sales, and only 9.1% supply over 25% of their total sales. Similarly, 62.2% of Cypriot managers supply less than 25% of their overall sales and the rest above 25%.

Table 3 Percentage allocation of private sales (PEPO).

	< 25%	25–50%	>50%	Total
Greek managers	81.8	9.1	9.1	100
Cypriot managers	75	17.9	7.1	100

4.1 Research question 1

The first research question aims at examining how significant the effects of a GPP policy tool were on the environmental decisions of managers who operate in Greece and Cyprus, two countries which are suffering from severe fiscal problems. Some Mann–Whitney U-tests were run between variables SUPO, PEPO and IMMOTIV. The variables IMMOTIV (i) (where i = 1, 5, 8, 12 and 11) refer to the GPP policy, while variables IMMOTIV6 and IMMOTIV9 refer to ‘command and control’ and ‘market-based’ policies, correspondingly. The variables IMMOTIV(i) (where i = 2, 3, 4, 7, 10 and 13) represent the voluntary initiative of firms to adopt environmental strategy mainly with the intention to exploit new opportunities and benefits (e.g. cost cutting, innovations, improved image). Table 4 illustrates the most significant reasons for which the sampled firms adopt environmental management practices. The findings indicate that there is a statistical significance for variables IMMOTIV4 ‘to meet consumer demand’ (U = 9, p = 0.018), IMMOTIV8 ‘to promote the green products by public authorities’ (U = 12, p = 0.032) and IMMOTIV9 ‘to take subsidies’ (U = 8, p = 0.014) with the decisions of Greek managers to adopt environmental management practices. This demonstrates that a set of sampled firms consider both the suitable public context for promoting their present or future green products and subsidies to finance their green strategies important incentives for adopting environmentally friendly behaviour. Some of the sampled firms also consider meeting consumers' needs for green products as important. The greater interest of managers (who are independent of government expenditures) in policies to increase consumption of green products indirectly indicates that the significance of GPP on a manager's decision to shift towards environmental strategies is somewhat diminished due to the gradual decrease in government expenditure. As is known, the significance of public procurement on decisions of mangers is associated with the level of public procurement and purchasing budget.

Table 4 The influences of environmental policy tools on managers behaviour.

Nationality/type of managers	Variable	U	p
Greek managers/EA	IMMOTIV1	17.5	0.045
Greek managers/EA	IMMOTIV3	89	0.009
Greek managers/PD	IMMOTIV4	9	0.018
Greek managers/EA	IMMOTIV6	13	0.024
Greek managers/EA	IMMOTIV7	12	0.019
Greek managers/PD	IMMOTIV8	12	0.032
Greek managers/PD	IMMOTIV9	8	0.014
Greek managers/EA	IMMOTIV12	13.5	0.025
Cypriot managers/EA	IMMOTIV1	113.5	0.038
Cypriot managers/PD	IMMOTIV2	4	0.037
Cypriot managers/EA	IMMOTIV3	76.5	0.021
Cypriot managers/EA	IMMOTIV10	107.5	0.045
Cypriot managers/EA	IMMOTIV11	26	0.017
Cypriot managers/EA	IMMOTIV12	89.5	0.014
Cypriot managers/EA	IMMOTIV13	107	0.047

Some aid through market-based instruments (e.g. subsidies) is necessary to stimulate managers to adopt environmental management strategies. This is exacerbated by the various austerity measures enacted by EU members and it makes it difficult for GPP to play a leverage role in enforcing the business community to invest in green economy. Additionally, the diminished power of GPP on Greek managers could also be explained by the reduction of public procurement (less than 25% of the overall turnover).

The Greek managers who have knowledge of the National Master Plan of GPP (ENVISTR5) consider the contribution to the main governmental sustainability goals of saving national resources (IMMOTIV1, U = 17.5, p = 0.045), improving of state environmental performance (IMMOTIV3, U = 89, p = 0.009) and putting stronger environmental criteria into public contracts (IMMOTIV12, U = 13.5, p = 0.025) as important incentives in order to invest in environmental management practices. Greek managers with energy criteria awareness consider the improvement of environmental performance in order to plan an environmental strategy to decrease environmental impact (IMMOTIV3, U = 89, p = 0.009) as an important factor. The Greek managers with environmental awareness, consider compliance with environmental legislation (IMMOTIV6, U = 13, p = 0.024) and the creation of new innovations (IMMOTIV7, U = 12, p = 0.019) as important incentives for investing in environmentally friendly practices.

The Cypriot managers who are public procurement dependent, seem to place great emphasis on decreasing impacts on the natural environment (IMMOTIV2, U = 4, p = 0.037). This implies that public procurement has less impact on their decision to adopt environmental management practices. Cypriot managers who have been informed of the EU GPP Toolkit consider the growing number of environmental criteria of public contracts (IMMOTIV11, U = 26, p = 0.017 as a very important incentive for them. They also place emphasis on the improvement of natural resources such as the improvement in carbon footprint performance (IMMOTIV2, U = 85, p = 0.048) and general environmental impacts (IMMOTIV3, U = 76.5, p = 0.021). Some Cypriot managers who are aware of EMSs (e.g. ISO 14001, EMAS) consider the amelioration of working conditions (IMMOTIV10, U = 107.5, p = 0.045), the growing number of environmental criteria in public contracts (IMMOTIV12, U = 89.5, p = 0.014) and the improvement of corporate image (IMMOTIV13, U = 107, p = 0.047) as very important incentives. These findings show that managers who are interested in implementing management strategies aim to exploit financial benefits. Finally, managers from Cyprus who have knowledge about eco-labelling, show an interest in contributing to saving public resources (IMMOTIV1, U = 13.5, p = 0.038).

Figure 4 illustrates that the educational background of respondents influences the value of motivations that they consider significant before adopting any environmental management practice. This implies that those managers from both countries who have studied environment sciences consider 1 (public resources savings), 4 (to meet the demand of environmental awareness consumers) and 12 (the harshness of environmental criteria in public contracts) more important motivations, while managers with an educational background in economics consider 2 ‘(the decrease of carbon footprint), 8 (to promote green products by public authorities) and 9 ‘(to take subsidies) more important motivations. The respondents with a background in economics seem to support more market-oriented policies in order to adopt environmental strategies, while the managers with a background in environmental sciences suggest mixing policies either market-based (to improve their economic position) or environmentally based (to improve society's and the natural environment's change).

Figure 4 The educational background and the significance of motivations. ^*ES, environmental studies; EcS, environmental economic studies. ^**The scores are calculated as average of respondents scores (five-point Likert scale).

This implies that those managers from both countries who have studied environment sciences consider 1(‘public resources savings), 4 ‘(to meet the demand of environmental awareness consumers) and 12 (the harshness of environmental criteria in public contracts) more important, while managers with an educational background in economics consider 2 (the decrease of carbon footprint), 8 (to promote green products by public authorities) and 9 ‘(to take subsidies) as more important motivations. The respondents with a background in economics seem to support more market-oriented policies in order to adopt environmental strategies, while those with an background in environmental science suggest mixing policies either market-based (to improve their economic position) or environmentally based (to improve society's and the natural environment's change).

4.2 Research question 2

The second research question aims to identify the most correct supportive policies which stimulate public-dependent procurement and environmentally aware managers to adopt environmental management practices. Table 5 shows that there is a statistical significance mainly for the environmentally informed Greek managers regarding the European guides ‘Green Purchasing’ and ‘Procura+’ (EURODIR) with certain governmental initiatives to prepare web-based platforms and databases to promote green firms and green products (STRADO5, U = 69, p = 0.018). The Greek managers who are informed about EMSs (ENVISTR1), consider the improvement of third party certification procedures under a strict governmental administration (STRADO3, U = 72, p = 0.014) and governmental attempts to strengthen consumer awareness of environmental products (STRADO4, U = 62, p = 0.004) as the most important. The public-dependent Greek managers seem to want a limited number of governmental interventions since they consider that they could have an advantage in relation to other managers and gain a competitive edge, while any governmental intervention might weaken their position. It is worth noting that there are no similar findings for Cypriot managers. Cypriot managers seem to have lower levels of trust in their government to take initiatives in promoting environmental and economic policy issues. This could be explained due to the fact that the majority of people have limited trust in the government to provide solutions to social problems during a period of financial crisis.

Table 5 Governmental supportive policies.

Nationality^a/type of managers	Variables	U	p
Greek managers/PD	STRADO3	72	0.014
Greek managers/PD	STRADO4	84.5	0.035
Greek managers/PD	STRADO5	69	0.018

a Greek and Cypriot managers.

Figure 5 indicates that the educational background of respondents might be associated with the type of practices that they believe should be adopted in order for firms to effectively achieve their environmental goals. Those managers with a background in environmental science seem to prefer to adopt strategies 1 (environmental awareness of staff) and 2 (suitable environmental educational programs). Managers with a background in economics seem to prefer market-orientated strategies such as 3 (third party environmental certification) and 4 (consumer awareness of environmental products).

Figure 5 The educational background and importance of environmental strategy. ^*ES, environmental studies; EcS, environmental economic studies. ^**The scores are calculated as average of respondents scores (five-point Likert scale).

4.3 Research question 3

The final research question examines the most significant environmental criteria of public contracts for public-dependent procurement and environmentally aware managers. Table 6 shows the most significant criteria according to the opinion of the respondents. The Greek managers who are public procurement-dependent consider the use of renewable energy resources (CRITERIA4, U = 118, p = 0.035) as significant criterion. The significance of this criterion can be explained by the fact that the majority of Greek firms sampled stated that renewable energy is used for their day-to-day operations. This explanation is more intuitive, obtained from information given in the questionnaire, rather than being based on rigorous scientific proof.

Table 6 Environmental criteria.

Nationality^a/type of managers	Variables	U	p
Greek managers/PD	CRITERIA4	118	0.035
Greek managers/EA	CRITERIA1	94	0.086
Greek managers/EA	CRITERIA2	87.5	0.046
Greek managers/EA	CRITERIA3	81	0.032
Greek managers/EA	CRITERIA5	74	0.017
Greek managers/EA	CRITERIA6	84	0.043
Cypriot managers/EA	CRITERIA1	24	0.017
Cypriot managers/EA	CRITERIA2	77	0.014
Cypriot managers/EA	CRITERIA3	78.5	0.002
Cypriot managers/EA	CRITERIA4	104.5	0.009
Cypriot managers/EA	CRITERIA5	92	0.007

a Greek and Cypriot managers.

The Greek managers who are aware mainly of EMSs (ENVISTR1) placed emphasis on criteria such as energy saving appliances (CRITERIA2, U = 87.5, p = 0.046), organic products (CRITERIA3, U = 81, p = 0.032), environmentally certified products (CRITERIA5, U = 74, p = 0.017) and eco-labelled furniture (CRITERIA6, U = 84, p = 0.043).

The Cypriot managers who are environmentally aware of the European eco-labelling flower symbol (ENVISTR2) consider organic products (CRITERIA3, U = 78.5, p = 0.002), the use of renewable energy (CRITERIA4, U = 104.5, p = 0.009) and environmentally certified products (CRITERIA5, U = 92, p = 0.007) to be significant. Additionally, Cypriot managers who are aware of the national plan of GPP (ENVISTR5) consider environmentally friendly consumables (CRITERIA1, U = 24, p = 0.017) and energy consumption appliances (CRITERIA2, U = 77, p = 0.015) to be significant.

Figure 6 shows that a difference in preference exists between those who studied environmental science and those who studied economics. The former category of respondents place emphasis on 1 (recycled materials) and 2 (organic products), while the latter category focuses more on 3 (the energy saving devices), 5 (EMS certified suppliers) and 6 (Eco-labelled furniture). This may imply that respondents with a background in environmental science pay more attention to environmental topics (e.g. recycling, organic products), while respondents with a background in economics seem to favour topics regarding firms' reputation, reliability and legitimacy (e.g. third party certification).

Figure 6 Educational background and importance of green criteria. ^*ES, environmental studies; EcS, environmental economic studies. ^**The scores are calculated as average of respondents scores (five-point Likert scale).

4.4 Comparison with other studies

These findings are not fully aligned with the mainstream literature which shows that traditional environmental policy instruments could play a critical role in SMEs decisions to adopt environmental management strategies (Porter and van der Linde 1995; Ambec and Barla 2002). Simpson et al. (2004) indicate that despite the financial limitations faced by SMEs in their attempts to adopt environmental management practices, some deemed them as important factors to increase their competitiveness. Unfortunately, this is not confirmed in this paper where environmental legislation or environmental taxes are considered by respondents as an important threat for their viability since an increase in total costs in conjunction with a sharp decrease in revenue (as result of the economic crisis) could force them out of business. Under the contemporary financial conditions, managers of SMEs do not believe that the traditional environmental policy tools could offer incentives for them to exploit opportunities. Furthermore, the findings are not in alignment with the plans and suggestions of fundamental institutional documents which illustrate the GPP as a proper policy tool to drive firms to adopt environmental strategies. The power of this policy tool has fallen since governmental budgets are constantly being cut due to the austerity measures enacted within European countries as well as in European countries that are operating under economic supervision (e.g. Greece and Cyprus).

The findings also demonstrate that the majority of managers demand further terms for public authorities in order for the GPP to become a promising tool for their operations. They suggest that a state-owned web platform promoting both environmentally friendly products and displaying the best environmental performance of firms could shape necessary market conditions in order to provide new opportunities to exploit the green economy. A virtual market (like eBay) might encourage firms to adopt environmental management practices and change their conventional production processes given that a turn to the green economy is likely to identify many consumers who willing to buy green product mainly in the case where it operates under the supervision of the state. Managers with particular knowledge of the benefits of environmental management practices, insist on the active role of the state for a more transparent third party certification and a flexible mechanism to strengthen the knowledge of consumers about corporate environmental performance. This finding is confirmed by Delmas and Toffel's (2004) proposal regarding governmental attempts to decrease the costs of firms by providing information and technical assistance to firms regarding environmental management practices as well as governments attempt to promote adopters within consumers.

In the case where a state is willing to introduce certain environmental criteria into public contracts, managers highlighted energy criteria and environmentally friendly consumables and appliances. The findings show that managers suggested a restricted number of criteria to be introduced into the public contracts. Conversely, Nissinen et al. (2009) indicate that Nordic countries introduced a large number of criteria, while Michelsen and de Boer showed that Norway's municipalities had introduced various environmental criteria into public contracts. The low emphasis on environmental criteria is explained by the poor financial conditions which make firms reluctant to suggest additional criteria for the fear that these might be potential barriers for their future cooperation with public authorities.

5. Conclusions

The aim of this paper is to examine the influence of GPP on firms to invest in environmental management practices. The majority of present institutional documents suggest GPP as an important policy tool which might encourage firms to shift their operations from conventional to more environmentally friendly methods. The findings showed that GPP has little influence on the decisions of firms regarding environmental issues. The majority of managers, regardless of dependency on public procurement, seem to pay great attention to financial and competitive issues in order to pay for environmental management practices such as the proper subsidies and the essential market conditions (e.g. strong consumer demand for green products). This could be directly associated with the odious market conditions shaped by the current economic crisis which oblige managers to urgently seek new strategies to overcome both their day-to-day financial problems (e.g. high taxes, lower consumer demand, bad creditworthiness) and some inevitable requirements of traditional environmental policy tools (e.g. environmental legislation and energy taxes) which inflate their total costs and threaten their future.

The respondents highlighted some very important institutional interventions which may assist in developing suitable conditions for the financial viability of the adoption of environmental management practices. Managers maintain that some initiatives of the government to strengthen consumer preferences for green products and the good environmental performance of firms, as well as an introduction of some specific and clear criteria into public contracts, might be necessary. Differing levels of environmental knowledge could explain the variation in managers' views regarding the types of institutional interventions. For example, managers who have knowledge about relevant policies (e.g. National Plan of GPP and European GPP Toolkit) seem to prefer the inclusion of more environmental criteria in public contracts, while managers with knowledge of environmental management practices would prefer corporate benefits in order to invest in environmental management strategies (e.g. improved image and better working conditions). Finally, the educational background of respondents seems to influence their preferences concerning to adopt environmental management practices, the types of environmental practices and the criteria that could be introduced into public contracts.