WEF: Why Public Procurement is Key to Sustainability Drive

Share
The WEF makes the case for leveraging public procurement for sustainability
The World Economic Forum (WEF) argues that public procurement remains underutilised as a tool for combating environmental degradation

Governments worldwide spend more than $10tn annually on goods and services, a figure that accounts for around 15% of global greenhouse gas emissions and significantly affects ecosystems, especially through transport and infrastructure supply chains. Yet, geopolitical tensions, financial constraints and trade pressures often make it difficult for governments to meet climate goals.

The World Economic Forum (WEF) argues that public procurement – the process by which governments purchase goods and services – remains underutilised as a tool for combating environmental degradation. Public-private partnerships and cross-sector coalitions, it suggests, can accelerate sustainability by increasing demand for greener solutions and transforming supply chains.

However, while the WEF says CPOs are central to driving sustainable change within organisations and across supply chains, challenges such as fragmented systems, higher costs of green products and outdated frameworks hinder progress.

Youtube Placeholder

Bringing stakeholders together

The WEF recently convened leaders from governments, international organisations and cities at the 2024 Urban Transformation Summit and a virtual roundtable on Green Public Procurement Leadership. These discussions, held in partnership with organisations like the World Bank, Organisation for Economic Cooperation and Development (OECD) and the C40 Cities network, highlighted how procurement practices can support green goals and sustainable industries.

Following these events, WEF published a report detailing the obstacles governments must overcome to make public procurement a more effective tool for sustainability.

One key challenge is the fragmentation of procurement systems. Many governments operate decentralised systems, making it harder to adopt consistent green procurement practices.

Rowena Candice M Ruiz, from the Government of the Philippines, notes: "Procuring entities often face… manual and fragmented processes, especially when it comes to GPP data and capacity development.”

Governments are, however, beginning to address this by adopting unified approaches to green procurement.

The cost of sustainable goods and services – referred to as the “green premium” – remains another significant barrier. To overcome this, some governments pool resources through partnerships, phase procurement to spread costs, or offer financial incentives.

Nick Xenos, Executive Director for the Centre for Greening Government at the Government of Canada, says: “The Government of Canada is using the total cost of product ownership to better assess the benefits of green procurement.

“We are partnering with the private sector to green federal buildings through energy performance contracts that use energy savings to pay for building upgrades.”

The World Economic Forum is committed to improving the state of the world

Modernising frameworks and balancing priorities

Outdated regulations also stand in the way of effective green public procurement. With support from organisations like the World Bank and OECD, many governments are now revising procurement frameworks to prioritise sustainability.

Ethiopia, for instance, is reforming its procurement regulations and implementing an e-procurement system to better measure supplier data. Woldeab Demissie, Director General of the Federal Public Procurement and Property Authority for the Government of Ethiopia, says this includes revising procurement rules, directives and standard bid documents.

Similarly, Oslo is using its policy framework to electrify public construction works, with Philip Mortensen, Senior Advisor for the Agency for Climate, City of Oslo, noting: “There is high attention at the policy level on public procurement as a key enabler of transformation.”

Despite these reforms, political cycles and public expectations often push governments towards quick, visible wins rather than longer-term sustainability goals.

“Truly transformative green public procurement requires a long-term vision for transitioning to a low-carbon, environmentally friendly economy,” states the WEF. “The challenge lies in balancing immediate tangible benefits with laying a solid foundation for the future.”

Success stories in green procurement

Some governments are already demonstrating the potential of green public procurement. The US Federal Buy Clean Initiative, for example, leverages the purchasing power of the federal government to drive demand for low-carbon construction materials like steel and concrete.

Madeline Reeves, Deputy Federal CSO at the White House

Madeline Reeves, Deputy Federal CSO at the White House, explains: "The Federal Buy Clean Program leverages the purchasing power of the US Federal Government, as the single largest buyer on Earth, to spur demand for clean American-made construction materials – steel, concrete and beyond.This programme’s demand signal helps spur clean American manufacturing.”

Similarly, the IDDI Green Public Procurement pledge has seen seven governments commit to prioritising low-carbon materials in their procurement processes.

Soledad Reeve, from the United Nations Industrial Development Organization, adds: “The IDDI government signatories are sending a strong demand signal for low-emission concrete and steel, which are high-impact procurement categories in infrastructure projects.”

As governments and cities continue to experiment with green procurement, collaboration and long-term strategies will be key to unlocking its full potential. 


Explore the latest edition of Supply Chain Digital Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today. 


Supply Chain Digital is a BizClik brand.

Share

Featured Articles

The Panama Canal and its Crucial Role in the EV Supply Chain

Supply Chain Digital examines the Panama Canal's vital role in the EV supply chain amid geopolitical tension and global trade volatility

Q&A: JP Lauer at GEP Europe Tour 2025, Amsterdam

Supply Chain Digital caught up with JP Lauer, Vice President Consulting at GEP, during the first leg of the GEP Europe Tour 2025 in Amsterdam

Blue Yonder: Optimising Cold Chain Operations for RealCold

RealCold, a key player in cold chain services, is deploying Blue Yonder’s Warehouse Management solution to digitally transform its operations

This Week's Top Five Stories in Supply Chain

Digital Supply Chain

Nestlé and sennder's Bid to Decarbonise Logistics

Logistics

What Does Rachel Reeves Speech Mean for Supply Chain?

Operations