IDC White Paper:
Sustainable Procurement
A new IDC White Paper investigates the expanding role of environmental sustainability in government procurement, with a focus on technology and emerging policies on indirect emissions
IDC insights on global government trends
The new IDC White Paper, “The Hottest Topic: Addressing Climate Change Using Environmentally Sustainable Procurement in Government” commissioned by the Microsoft Public Sector Center of Expertise, provides insights on trends, case studies, and recommendations for governments seeking to understand and manage the impacts of their supply chain on their climate change targets.
Trends in environmentally sustainable procurement
The IDC White Paper notes “Governments have enormous financial power, and the scale and impact of government procurement is vast. According to the World Bank, government spending averaged 17.7% of global gross domestic product in 2020 across 151 countries, with wide variation; government spending in the EU in 2020 was 53.4% of GDP.”
They find that as government at national, regional, and local levels have now committed to ambitious climate targets, that they are “adjusting internal operations, promoting the development of green sector products and services, and reviewing at the sustainability of their supply chain and their suppliers.” As a result environmental sustainability is becoming a gating factor in public sector procurements.
“Scope 3 emissions will be the next frontier of government climate action”
Within the Whitepaper, IDC finds that an increasing recognition that public environmental policies will need to develop a more expansive scope in order to meet climate targets. They identify that while policies relating to scope 3 emissions are in their infancy, that these will become increasingly central for governments.
“To make a truly transformative impact on climate change, environmental policies must extend to Scope 3 emissions.”
IDC highlight that “With Scope 3 tracking, suppliers become essential partners in meeting targets. Manageable systems and standards need to be in place for measuring, tracking and reporting to enable data-driven decision making, prevent greenwashing, support corporate environmental disclosure and green financing and investments.”
Sustainable procurement in action
The IDC White Paper provides several examples of how countries and regions are using procurement levers to advance sustainability goals.
United States Department of Defense
IDC highlight the actions of the US Department of Defense in starting to embed tracking of Scope 3 emissions in its procurement process through a Request for Information (RFI). The Whitepaper shares the questions used within the RFI and the approach to engaging with suppliers, as a best practice which can be used by other governments with complex procurement processes.
United Kingdom
Within the UK, IDC find that “clear national goals, supporting policies around requirements and criteria, as well as advisory services and standardized agreements for sustainable technology purchasing, including a Technology Code of Practice, offer an excellent example of a coordinated national effort towards an environmentally sustainable technology supply chain.”
IDC highlights the specific guidance set out in the UK Technology Code of Practice, including: “Optimizing cloud for less energy use and using public cloud. While at first glance this may seem to merely move energy consumption from the government to the cloud provider, large cloud providers are generally more efficient than traditional enterprise data centers.”
European Union
Within the European Union, “one of the main drivers of investment in sustainability in the EU is the NextGenEU Recovery Plan. The centerpiece of the NextGenEU is the Recovery and Resilience Facility with 723 billion euros available to support member state recovery.” 37% of these funds must be spent on climate initiatives and 20% on digital initiatives. IDC research shows that 49% of government executives plan to adopt clean technologies using national and EU recovery packages funds.
IDC find that “the EU has tied recovery from the current crisis to both digital and IT modernization and environmental sustainability and prompted member nations to build recovery plans with these factors in mind in order to access funds. This is a policy best practice to watch as it develops.”
IDC recommendations
IDC recognize the dual role of technology in sustainability: “From traffic management platforms to building management systems, governments can use digital technologies to improve emission measurement and reporting as well as drive the efficiency of infrastructure and services.”
“IDC forecasts that continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 to 2025.”
IDC foresee the inclusion of scope 3 emissions as having an “important effect on government procurement policy”. They make four recommendations in the Whitepaper, as governments develop and refine their environmental sustainability policies to include technology solutions and Scope 3 emissions:
- Embed sustainability in public procurement from the design of projects to post-award contract administration.
- Develop implementable standards, definitions and measures of environmental sustainability for compliance as quickly as possible.
- Provide clear procurement guidance on green IT.
- Build organizational skills and capacity for agencies and departments at all levels of government.
About the Center of Expertise
Microsoft’s Public Sector Center of Expertise brings together thought leadership and research relating to digital transformation in the public sector. The Center of Expertise highlights the efforts and success stories of public servants around the globe, while fostering a community of decision makers with a variety of resources from podcasts and webinars to white papers and new research. Join us as we discover and share the learnings and achievements of public sector communities.
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