Related Expertise: Public Sector
Every year, governments around the world spend about $11 trillion to buy defense and security equipment, waste management services, fuel, electricity, construction materials, and other goods and services that they need to operate. And every year, all that activity produces about 7.5 billion tons of direct and indirect greenhouse gas (GHG) emissions, roughly 15% of the world’s total.
The sheer size of public procurement’s carbon footprint makes its potential contribution to global decarbonization central to the fight against climate change. However, reducing public procurement’s emissions to net zero will require the combined efforts of governments and their suppliers alike. The enormous amount of money that governments spend—about 13% of global GDP—should give them a considerable amount of influence over the carbon footprint of those suppliers.
BCG and the World Economic Forum collaborated to copublish a comprehensive report that analyzes the benefits and challenges of green public procurement. It also provides guidance on how officials can ensure that procurement activities contribute to achieving net-zero goals.
1. Public procurement’s GHG emissions are heavily concentrated in six industries.
2. Governments should look to exert their influence on industries that are heavily dependent on public spending.
3. Pursuing net-zero goals in public procurement will boost the green economy.
4. A considerable proportion of public procurement’s GHG emissions can be abated at a reasonable cost. We expect that greener procurement activities will raise costs by just 3% to 6% through 2050.
5. Public procurement is also complex and highly decentralized, making it difficult to devise coherent decarbonization strategies.
Overcoming the challenges of greener public procurement will take a concerted effort on the part of procurement officials at all levels of government. This framework is designed to help them meet their goals.
The green procurement framework can be applied to procurement functions at all levels of government—central, regional, and local. The key is collaboration: reaping the full benefits of green public procurement will happen only if all stakeholders across the entire public-procurement ecosystem work together to set and reach their net-zero goals.
Principal
Copenhagen
Public procurement accounts for 15% of global greenhouse gas emissions annually. Because governments can create demand for clean energy technologies, they can have a direct impact on reducing the world’s carbon footprint.
