How to make public procurement greener and more sustainable
Global government procurement operations produce seven times as much carbon as the aviation sector, according to a report by Boston Consulting Group and the World Economic Forum, Green Public Procurement: Catalysing the Net-Zero Economy.
Industries reliant on state expenditure, such as security and defence, waste disposal services, and infrastructure, accounted for three-quarters (75%) of the emissions related to public procurement.
Furthermore, targeting net-zero emissions in public procurement will generate new jobs and private investment, increasing global GDP by US$6 trillion by 2050. It also indicates that reducing emissions linked with public procurement by 40% will result in a 3% increase in expenses.
However, decentralised procurement, competition for green financing, and a lack of open emissions data will make decarbonisation initiatives more difficult.
Luckily, the report also contains a framework developed by the Mission Possible Partnership, a decarbonisation alliance that includes the WEF itself, which could assist procurement experts and practitioners in meeting their objectives.
You can also learn about embedding social value in procurement from Social Value Portal, or watching the video. The article continues below.
Identify high-emitting providers for transparency data
Countries should first utilise existing data to establish a broad overview of the issue that awaits them, as per the report. Procurement representatives, on the other hand, should trace their supply networks and select vendors for each key area.
Collecting extra data from these suppliers will enable them to apply industry standards to measure each product's impact on the environment throughout its lifecycle, from raw material production to disposal and recycling.
Prioritise forward-thinking suppliers
Suppliers should be examined and prioritised based on their progress in defining and meeting emission standards.
Two elements should be considered: the capability to engage specific suppliers and the ability of each supplier to fulfil its targets. All contract requirements should then be linked to specific criteria and targets that are precise but not unduly demanding.
Initiate products optimisation
Procurement officials should evaluate which areas of supply chains may be optimised in order to comply with emissions-cutting policies. Throughout a product's lifecycle, this could involve using low-carbon components, optimising transportation routes and vehicle loading, and transitioning to renewable fuel sources.
Create a strategy that covers cost, influence, practicality
After gathering data and enacting regulations, the next phase, according to the paper, is to determine which levers can be used to effectively cut emissions. These will comprise both government and supplier efforts, which can then be evaluated by harmonising economic and environmental costs.
Set operation standards
Procurement officials must define effective and sustainable criteria for both internal and external operations, with concrete repercussions for suppliers who fail to fulfil them.