As governments around the world grapple with climate change, every single one of them has a powerful and untapped tool at their disposal: public procurement.
Last month, we gathered with over 60 climate action reformers to dive deeper into the role of public procurement in fighting climate change and building resilience. We were joined by co-organizers at the Patrick J McGovern Foundation and The Transparency & Accountability Initiative, as well as speakers from CivicDataLab, Carbon Leadership Forum, George Washington University School of Law, Cambridge University, and StateUp.
Here are our top takeaways and action items from the conversation.
1. Public procurement already has an outsized impact on our planet. We need to make it a good one.
We learned about the massive costs that our planet is already paying for status quo procurement—with global government contracts alone producing 7.5 billion tons of greenhouse gas emissions, about 15% of the world’s total. Infrastructure is one of the top industries driving these emissions. With $97.5 trillion in infrastructure investments needed by 2040 to meet the Sustainable Development Goals, it is critical to overhaul the way public works are planned, procured and delivered so that every infrastructure asset delivers for both the planet and its people.
The numbers also show that it is not too late to turn things around. 40% of all GHG emissions related to public procurement can be abated for less than $15 per ton of CO2 emissions, no more than a 3-6% increase in cost to governments. According to the World Bank, $4.2 trillion can be saved by investing in more resilient infrastructure. Plus, there are systematic, data-driven approaches we can use to reduce corruption in public works spending and make sustainable investments.
Ultimately, the size and scale of the problem means that we need to work together to leverage procurement for climate action. Simply put, we cannot afford to stick to the status quo.
2. Procurement transformation requires innovation and rethinking how governments define value.
It is impossible to achieve net-zero or any other climate goal without huge amounts of technological and policy innovation. We will need governments to buy things in a fundamentally different way. Many governments still struggle to identify the right technology and innovation partners, especially as technology changes so quickly and some of the solutions we need aren’t yet commercially available.
Procurement is also notoriously risk-adverse and focused on lowest price and standardization, instead of customization and best value, and the rules often discourage innovation and/or punish risk. So we will need to rethink how we procure, especially how governments talk to their marketplace to solicit the best climate solutions. That requires a big mindset shift and public sector practitioners will need support to grow internal capacities so that they can make the political, economic, and cultural shifts needed to be effective market drivers for climate and environmentally friendly products and services, as well as avoid greenwashing and thinking about outcomes, not just the price paid. The municipality of Copenhagen provides a stellar example of procurement transformation that balances costs, supplier capabilities, and needs. Through procurement reform and stakeholder engagement with organic farms and kitchen staff at public schools and hospitals, the local government achieved their policy goal of 90% organic ingredients in all 900 kitchens that produce meals across the city—all at no additional cost.
3. There is a wealth of actionable, accessible information and advice, but we need more research and knowledge-sharing around outcomes.
As OCP, we are seeing an increasing appetite for guidance and resources on sustainable public procurement. From reducing emissions through green transportation in Mexico City, to increasing the uptake of green products in Lithuania, we’re helping open contracting champions create better climate outcomes. Our two roundtable case studies also featured ready-to-scale pilot projects. In Washington State, the Carbon Leadership Forum researched a statewide “Buy Clean, Buy Fair” Policy which aims to reduce ‘embodied carbon’ in the built environment. In Assam, India, CivicDataLab has built sophisticated data models to help the government make informed decisions on infrastructure spending to improve disaster preparedness and reduce vulnerability.
StateUp has a very helpful guidance for the transition to green government, My Society is prototyping climate projects based on government spending and digital services, and much more. The European Commission has a wealth of tools and resources for this as well.
That said, sustainable procurement is still woefully understudied and underinvested in as a policy lever for fighting climate change, especially around outcomes. A recent paper in Nature found only 16 studies of public procurement as an environmental policy tool (versus, for example, over 40 studies on tax exemptions). We need more research into how we might maximize the potential of procurement and measure impact. We also need more digital platforms for global knowledge sharing, evidence, data, and public engagement. And we need to facilitate local networks for reformers and citizens to drive bottom-up advocacy, too.
4. Data standardization is essential to making the transition to sustainable procurement.
Data and data tools are the foundation upon which effective climate action is built. We need open, structured, standardized, and machine-readable data to help inform leadership decisions and define evidence-based solutions. Initiatives such as the Patrick J. McGovern Foundation’s Data Practice Accelerator serve as a leading example of how funders can support organizations to build evidence for critical data use cases.
This goes for public procurement too, and publishing open data around green procurement is critical to inform target-setting (i.e. data about emissions, pollution, air quality, traffic intensity, waste, consumption, etc.), track implementation to benchmark performance of buyers and their suppliers, and boost public reporting of progress towards a green economy. OCP’s Green Flags for Sustainable Procurement resource provides step-by-step for guidance for how to leverage data (and which data to pay attention to) throughout this process.
5. We are fighting against a powerful status quo. So, we need powerful coalitions.
Public procurement is a huge market that impacts the economy, society, and the environment. However, decisions about how and with whom public money is spent are not neutral, they reflect the prevailing power structures. It is said that $1 trillion needs to be unlocked in climate finance by 2030 in order to cap global warming at 1.5 degrees, and in order to make sure this is spent well and equitably, it will take an interdisciplinary movement of reformers to overcome complacency and drive real change.
In the CivicDataLab case study, we saw how a civic technology company, a government disaster management agency, a global non-profit, and a philanthropic funder each played a critical role in moving their project forward. This kind of collaborative approach is the only way we will be able to break down entrenched systems and the power and influence of those who benefit most from the status quo.
We look forward to helping build new partnerships and new commitments required to transform public procurement. This roundtable served as the first of many conversations, and we hope to partner with enthusiastic multilateral, bilateral, and philanthropic organizations who are eager to support more research on sustainable procurement as a policy tool; lift up technological innovations that will help us better assess green products, criteria, and environmental impacts; or accelerate the work of organizations that are developing educational materials and facilitating learning in this space. There is an important role for funders in catalyzing effective use of procurement for climate action, and public procurement reform can equally play an important role in helping climate action funders achieve their goals at scale.
We have big ideas on how to drive climate action through government contracting reform and innovation. Get in touch with OCP’s Head of Sustainability, Ben Fernz, to continue the conversation with us!