Procurement and impact

Procurement and impact

June 22, 2022
Procurement

Governments spend over 13tn USD a year with their suppliers, or around 15% of global GDP. We’ve started analysing the carbon intensity of public procurement. It is uncertain how much of our carbon is emitted through public procurement, but with a strong emphasis on infrastructure, transport, and military spending it is likely to be more than 15% of the world’s greenhouse gas emissions.

There is a growing awareness that procurement professionals should consider these emissions in their purchasing activity, providing a challenge to suppliers to help them reduce their contracted emissions and set out how to make their own organisations carbon neutral. This might mean hospitals seeking to reduce beef in their catering contracts, or social housing teams demanding low carbon concrete in new homes. However, procurement teams face pressure to deliver savings which can require buyers to sign up to long-term contracts, effectively baking in emissions until the contract is re-let. Even a simple five-year contract now consumes one-sixth of the time that we have until the 2050 target for net-zero.

This puts greater pressure on procurement teams to use the moment of renewing a contract to specify lower-carbon alternatives. This is why our team has started experimenting with open procurement data to see if we can model the likely impacts of reducing emissions as contracts renew. Using data from the UK we’ve modelled different projections for the likely carbon emissions under different scenarios. Based on the data we have analysed, a twenty percent reduction at each renewal would see the UK government’s contracting still emitting 686,000 tonnes of carbon per month by 2030.

This is likely to be a significant underestimate, poor data quality meant that we were only able to evaluate 40% of the data that was published and further limitations on transparency mean that some contracts are not being published. Despite the limitations of our analysis, there’s increasing recognition by governments that they need to evaluate the carbon intensity of their supply chains and take a leading role in reducing the amount of carbon we emit.

The USA is committing to federal sustainability and the UK has set new targets for suppliers. Many other countries across the world are implementing new policies that will drive carbon out of our public supply chains, from Mexico to Lithuania and beyond our governments are getting ready for public procurement to go green. If the data is made public, we’ll be there to measure their progress.

Get in touch with us if you’d like to know more about our government procurement data and our API.

 

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