Current procurement climate blocking net zero targets?

Executive Compass responds to Pagabo’s latest white paper, warning that without urgent procurement reforms, businesses bidding for public sector contracts risk undermining the UK’s decarbonisation goals.

A new white paper from national framework provider Pagabo has revealed significant doubts among public sector procurement professionals over whether the UK’s 2035 decarbonisation targets can be achieved.

Drawing on responses from 171 professionals across 147 organisations, the report found that 65 per cent of respondents do not believe the government’s 2035 Net Zero target of reducing emissions by 81 per cent from current levels is achievable. Confidence was particularly low in regions with more limited specialist supply chains, such as the South West.

The research also showed that 59 per cent of public sector stakeholders faced significant barriers to meeting their own net zero targets, with a further 13 per cent having no formal strategy or action plan in place.

While challenges vary, the cost of decarbonisation and the availability of funding were cited most often, alongside skills shortages and capacity constraints. One of the most striking statistics from the white paper is that 75 per cent of respondents indicate cost takes priority over sustainability most or all of the time in decarbonisation procurement.

Executive Compass, one of the UK’s leading and only bid consultancies with a dedicated social value division, says the findings show direct implications for businesses bidding for public sector decarbonisation contracts.

Christian Rowe, CEO of Executive Compass said: “Public procurement will be central to meeting net zero goals. If cost continues to outweigh sustainability in decision-making, there is a real risk that environmental and social value benefits will be sidelined, making it even harder to meet national targets.”

The report also points to regional disparities in awareness of funding opportunities, with 40 per cent of respondents saying funding options were unclear, and 69 per cent reporting challenges when applying for funding.

The report comes at a significant time for UK procurement, as the Cabinet Office opened a public procurement consultation last month to build on existing changes introduced by the Procurement Act 2023. This consultation aims to review and simplify the Act to maximise benefits for working people. Among its goals are to simplify social value frameworks and improve procurement processes, changes that Executive Compass believes could help better align cost, quality, and sustainability if applied effectively.

Rowe added: “A change in the Procurement Act framework to simplify and maximise benefits for working people could offer a real opportunity to lean on social value and sustainability more deeply in tenders. But without consistent funding access, early market engagement, and region-specific support, those opportunities could be missed.”

Encouragingly, 78 per cent of buyer organisations said they consider sustainability in procurement activity, and 55 per cent track or monitor social value outcomes. However, with cost pressures so prominent, there is a risk that social value is seen as a ‘nice to have’ rather than a core part of procurement.

In light of Pagabo’s findings, Executive Compass emphasises several critical areas for action to improve decarbonisation efforts. They highlight that early engagement between contracting authorities and suppliers is key to providing clarity around funding and technical requirements. Helping to overcome the confusion and challenges many face in accessing resources.

Addressing regional knowledge and skills gaps will also be vital to ensure all areas of the UK have equal opportunity to participate, particularly where specialist supply chains are limited.

Most importantly, giving greater weight to social value and sustainability in procurement scoring is essential to help balance immediate cost concerns with the need for long-term environmental and community investment and benefit.

Pagabo’s white paper concludes that the public sector will play a pivotal role in leading the UK’s decarbonisation journey, and Executive Compass agrees. The bid writing consultancy believes that with the right procurement approach, suppliers and contracting authorities can work together to make the targets more achievable.

To read Pagabo’s white paper ‘Driving Decarbonisation in the Public Sector’ click here.