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BCG-WEF Project: Mission Possible

The goods and services that public procurement agencies buy contribute greatly to global greenhouse-gas emissions. But given governments’ buying power, they can encourage the industries they buy from to abate their emissions.
  • Governments around the world spend about $11 trillion annually on the goods and services they need to keep operating—about 13% of global GDP.
  • Net-zero public procurement would add just 3% to 6% to costs through 2050.
BCG and the World Economic Forum collaborated to copublish a report that offers a detailed framework for making green public procurement a reality. Read the report here.
Public procurement is responsible for a significant proportion of global greenhouse-gas emissions. Governments can accelerate their path to net-zero operations by adopting the green procurement framework—an approach designed by BCG and the World Economic Forum for the Mission Possible Partnership.

Recent Content

A Procurement Strategy for Low-Carbon Concrete and Construction

Demand for cement—the key ingredient in concrete—is soaring on the wings of a global infrastructure and building boom that is driven by the expansion of developing and developed economies alike. But cement manufacturing poses multiple challenges. Namely, it will not be possible to meet climate change goals unless steps are taken to reduce the CO₂ emissions that result from cement manufacturing, which is responsible for approximately 7% of the global total.

Attempts to address this looming concern must begin with the public sector. Governments and agencies at the national, regional, and local levels are responsible for 40% to 60% of concrete sales and 20% to 30% of the construction industry’s revenues. The public sector can lead the transition toward low-carbon concrete by shifting more rapidly to green procurement policies. Governments can develop regulations and business environments that encourage and, at times, mandate the procurement of low-carbon concrete and the adoption of low-carbon construction methods.

A new report explores the activities of six countries (Sweden, Germany, France, the Netherlands, UK, and US) that are leading the charge to develop rules for low-carbon concrete and construction procurement. This report—a joint effort by the World Economic Forum, the Global Cement and Concrete Association, and Boston Consulting Group—is based on interviews with construction and procurement experts from the public and private sectors in the countries we studied. The report examines the tools and regulations that have been adopted to support the shift to low-carbon concrete.

Our analysis suggests a blueprint for low-carbon concrete and construction that is focused on a carbon reduction foundation and procurement policies.

  1. The foundation is a set of common standards for assessing the carbon emissions of concrete, other building products, and completed projects. It generally includes a product database for collecting and storing carbon emissions information and baselines. Similar databases and baselines can also be established for whole projects.  
  2. Procurement policies determine rules for the disclosure of carbon in concrete products and projects, which are essential for data collection in the foundation stage. In addition, procurement policies are needed to set targets for carbon emissions reduction. To meet these targets, mandates and incentives should be adopted.  

The report describes the primary issues that policymakers, procurement leaders, and the private sector must address to design and implement low-carbon-concrete standards, tools, and policies. Among these issues is the need to measure carbon impacts across the life of a project, even after its completion. We also explore the obstacles in scaling green concrete and construction globally.

Procurement programs should be measured and refined over time, becoming more ambitious as the technology advances for carbon capture and carbon emissions measurement, among other things. Ideally, these improvements to procurement programs should align with the targets set forth in the Paris Agreement. In addition, programs must be tailored for developing markets, where much of the future demand for concrete and infrastructure will lie. International collaboration is necessary to accelerate progress and ensure that minimum shared guidelines are adopted. These guidelines should emphasize the disclosure of embodied and operational carbon in concrete and construction projects, set ambitious and credible targets, and incentivize low-carbon design.

Green Public Procurement: Catalyzing the Net-Zero Economy

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.

Five key findings from the report

  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.

The Green Procurement Framework

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.

Create transparency in baselines and targets

Optimize products for GHG abatement across their life cycle

Define product and supplier standards and work with suppliers

Develop the wider ecosystem and create buying groups

Transform the procurement organization and align across agencies

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.

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BCG-WEF Project: Mission Possible