Page 18 - Energize February 2022

NEWS

Green government procurement practices could cut

15% of global GHG emissions

Public sector procurement activities are directly or indirectly responsible for 15% of global greenhouse
gas (GHG) emissions, seven times the amount emitted by the entire aviation industry, according to a new
report from the World Economic Forum and Boston Consulting Group (BCG).

round the world, the study around $6 trillion through 2050 – a
finds, governments currently significant proportion of the green
Aspend $11 trillion – or 15% of economy’s total GDP of $70 trillion.
global GDP – on procurement every
year, making the transition to green Public procurement emissions can be
public procurement crucial for reaching abated at low cost
net zero. The report, “Green Public The study finds that approximately
Procurement: Catalyzing the Net-Zero 40% of all emissions related to public
Economy,” has been released. procurement can be abated for less than
As of November 2021, 92 countries, $15 per ton of CO 2 emissions, although
which collectively account for about 85% this amount varies by industry. And
of global greenhouse gas (GHG) emissions, greener public procurement should
have pledged to meet net-zero emissions increase costs to governments by no more
targets. The new analysis indicates that than 3% to 6%.
greener public procurement practices can The added cost of green procurement
significantly reduce CO 2 emissions across could spur governments to work
government supply chains and operations. cooperatively to encourage suppliers to Joerg Hildebrandt
Most of the emissions associated with invest in the technological innovation
public procurement – up to 75% of needed to make the transition to net capture their greatest opportunities.
the total – stem from the activities of zero. This, in turn, would help suppliers BCG was the pioneer in business strategy
six industries: defence and security, decarbonize the goods and services they when it was founded in 1963. Today, we
transportation, waste management sell to governments. work closely with clients to embrace
services, construction, industrial products Borge Brende, President of the World a transformational approach aimed at
and utilities. Economic Forum, concluded: “Achieving benefiting all stakeholders – empowering
Joerg Hildebrandt, a BCG managing net zero will require collaboration organizations to grow, build sustainable
director and senior partner and a co- between governments and companies. competitive advantage, and drive positive
author of the report, says: “Government Importantly, this report shows that the societal impact.
spending power is often overlooked in transition to green public procurement Our diverse, global teams bring deep
discussions of paths to net zero. But benefits all stakeholders. The transition industry and functional expertise and
public procurement’s sheer scale and to green procurement practices shouldn’t a range of perspectives that question
spending power can exert considerable be perceived as a cost burden for the status quo and spark change. BCG
influence in combating global warming. industries and the public sector, but rather delivers solutions through leading-edge
There is a short-term green premium as something that creates long-term management consulting, technology and
for governments when transitioning to sustainable economic growth.” design and corporate and digital ventures.
more sustainable products and services. We work in a uniquely collaborative model
The increased cost will decline over time, A copy of the report can be across the firm and throughout all levels of
however, as new technologies are scaled downloaded here. the client organization, fuelled by the goal
up, making the production of net-zero of helping our clients thrive and enabling
products more efficient.” About Boston Consulting Group them to make the world a better place.
The private investment and new jobs Boston Consulting Group partners with
triggered by greener public procurement, leaders in business and society to tackle For more information, please visit
in aggregate, will boost global GDP by their most important challenges and BCG’s South African website

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