Harnessing the power of public procurement to meet the climate change challenge


By Mohamed Hans, CIPFA Procurement and Insurance Advisor

As the world grapples with the COVID-19 crisis, experts are predicting that climate change is an even bigger challenge that requires swift action. Every day, there are stories from around the world about climate or environmental disruption, which makes you wonder how close we are to the tipping point. It’s hard to see that we have any realistic prospect of meeting the Paris Climate Change Agreement, penned in 2016, unless all stakeholders accept ownership and deliver on their promises.

Public procurement will continue to contribute significantly to climate change initiatives. The UK public sector’s spending power is massive at £300bn, equating to approximately 32% of total public sector expenditure and 13.7% of GDP.

If we think about climate change through a procurement lens, we can see both a challenge and an opportunity. On the one hand, climate change brings the threat of disruption to supply chains in food, pharmaceuticals and even waste recycling. Climate-related events pose countless problems against which procurers and supply chain managers need to take proactive measures. On the other hand, there is the opportunity to do public good by working with suppliers to introduce new technology and processes that tackle the causes and effects climate change and protect the environment.

Public contracting authorities deliver a diverse range of vital services. This offers them huge opportunities to direct expenditure towards efficient low-carbon options and help the UK achieve its target of net zero emission of all greenhouse gases by 2050 (Scotland by 2045). Collectively, transport, homes, agriculture and energy, contribute a massive 78% of total emissions, which opens up huge prospects for public procurement to play a leading role in driving down emissions.

If we take the top few categories of expenditure across the public sector, which includes construction of new hospitals, highways and schools (£28bn), facilities and property management (£23bn) and education and passenger transport (£5.3bn), public bodies can develop specifications which act as a catalyst to drive the supply market and develop more innovative and energy-efficient products.

For example, every local authority will have a wide range of transport contracts from fleet vehicles and grounds maintenance vehicles, to school transport and waste wagons. Before new procurements commence and instead of just repeating what has been done before, contracting authorities can set out their short, medium and long-term vision and thereby direct suppliers to offer vehicles and other technology with reduced or no emissions, while at the same time delivering better value for money. 

Earlier this year, Liverpool City Council introduced a new fleet of waste wagons which are powered by biomethane, a compressed natural gas, that will produce 80% fewer carbon emissions and 90% less nitrogen oxide than the previous and highly polluting diesel vehicles. Not only that, but the joint Mercedes and Faun Zoeller Variopress wagons will have a load capacity of up to 10.5 tonnes and a rear steering axle to enable easy manoeuvring around narrow city streets. The council has also invested in a fleet of electric street cleansing vehicles, as well as promoted the use of electric taxis, introduced more LED street lighting and created a new bus hub in Liverpool city centre – all of which are estimated to take a combined 5,000 tonnes of CO2 out of the atmosphere annually. As a result of this and other projects, Liverpool is on course to meet its climate change target three years ahead of schedule.

The Cabinet Office, Department for Culture, Media and Sport, and Crown Commercial Service recently launched an updated social value policy for central government which can also be applied by sub-central contracting authorities.

Fighting climate change is a key part of this model. Public bodies should actively be looking for suppliers to take actions to work towards net zero carbon emissions and support environmental protection and improvements.

The key word here is action. It is not enough to get suppliers to provide a copy of their environmental policy, unless this is linked to a specific action plan with clear deliverables. What matters most is what is the supplier actually doing or going to deliver to tackle climate change and protect the environment?

Where possible, this should now be included as a specific award criterion in all major procurements, and the supplier's response or proposal made a specific contractual deliverable.

Public bodies must now step up to the climate challenge and revisit their procurement plans and implement an action plan to make a better tomorrow.

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