Introduction

The 5th Interdisciplinary Public Procurement Symposium organized in Cagliari by the International Master on Public Procurement Management (IMPPM) acknowledged once more the importance of interdisciplinary research on Public Procurement inviting academics and practitioners from all over the world to provide their perspectives and reaserch findings on Defence, Human Rights, Climate Change and Preferences in Public Procurement.

Organized by SAPIENS Lead Researchers Prof. Gustavo Piga and Prof. Tunde Tatrai, together with Prof. Annalisa Castelli, the Symposium takes place every two years, with the next one planned for 2025 in Lisbon. In this edition, SAPIENS Director of Trainings, Prof. Martin Trybus, participated as a debater in the Defence Procurement Session. Whereas SAPIENS Early Stage Researcher Valentina Bianchini presented her research paper about the impact that Public Procurement can have on enhancing Global Supply Chains resilience to climate change. Here follows a summary of her findings.

Understanding the nexus among Globalization and Supply Chains resilience

Globalization and supply chain resilience are inextricably linked. To reap the benefits of Globalization, firms have been increasingly engaged in global sourcing and supply chains have become more complex and longer.

However, the complex and geographically dispersed nature of modern supply chains present both benefits and risks. While they enable cost-efficiency and market advantages, they also amplify vulnerabilities and disruptions due to extended interependencies. As Globalization is evolving, also following the shocks caused by the recent pandemic, there is an increasing need to analyze supply chains in a holistic and non-static way.

How does Climate Change Risks affect the Supply Chains?

The risks posed by climate change are undeniable and escalating rapidly. From extreme weather events to sea level rise, these changes impact ecosystems, biodiversity, health, and the very structure of our societies. The World Economic Forum Global Risk Report 2023 identifies climate change as one of the most critical risks for the coming years, emphasizing its urgent consideration. A resilient supply chain is one that is able to anticipate and manage climate impacts, ensuring a swift recovery and post-shocks adaptation.

However, global supply chains not only are exposed to these risks, but also contribute to them by generating greenhouse gas (GHG) emissions. Scope 3 emissions which take into account both upstream and downstream GHGs emissions, are estimated to be resposnibile for about 70% of a business carbon footprint. Therefore effective mitigation comes both from efforts in making supply chains more resilient to these external shocks and from efforts to reduce Global Supply Chains impact on the environment.

Public Procurement as a Catalyst for Resilience

Public procurement is increasingly becoming a strategic function, which does not only aim to satisfy public authorities needs for goods and services, but also contributes to achieving other “primary objectives”, such as reducing the environmental impact of public organizations and of their suppliers. Given the size of public expenditures, public procurement can represent a leverage for “greening” the market as, for example, public buyers can request their suppliers to provide goods produced with low carbon emissions. 

However, amidst increasing climate change related risks public buyers should also proactively think about how resilient their supply chains are and prepare mitigation responses. Additionally, when procuring, public buyers shall aim for cost-efficiency, therefore it is crucial for them to adopt procurement strategies that factor in climate change risks and their potential costs.

Insights for Public Buyers and Way Forward

Valentina presented empirical evidence of the strategies employed by three public authorities in the U.S. to build resilience and address climate change risks. Through an explorative case-study analysis, the study examines public procurement strategies emphasizing the influence of regulation, competence, and decision-making autonomy on governance choices. The findings suggest some action for public buyers to start preparing for addressing climate change related risks in their supply chains:

1. Formulate climate plans and align procurement strategies with uncertainties.
2. Take a holistic view of supply chains, identifying and monitoring risks beyond direct suppliers.
3. Aim for flexibility in supply chain configurations to adapt to risk-informed strategies.
4. Invest in organizational competence and dedicated sustainability functions.
5. Incorporate climate-change scenario planning for enhanced preparedness and reduced transaction costs.

In light of recent legislative developments in the European Union (Proposal for a Directive on corporate sustainability due diligence) and in countries like Germany (Supply Chain Act 2023), which are requiring firms to conduct supply chains due diligence for environmental and social risks, there is increasing pressure for public and private sector organizations to monitor their supply chains. In the U.S.A., California has recently passed a Senate Bill (SB 253) mandating that companies operating in the State and generating annual revenues of at least $1 billion disclose their climate emissions generated throughout their supply chains and value networks.

By integrating sustainability and resilience goals into procurement practices and normative frameworks, public sector organizations can provide the incentives for building more sustainable and resilient supply chains.

Did you know?

The Interdisciplinary Public Procurement Symposium has since 2011 adopted an engaging format where debaters, coming from different research fields, provide their perspectives about the most pressing issues affecting Public Procurement, both as a profession and as a research area. Moreover, selected research papers are presented to further enrich the debate with empirical evidence.

The Symposium is closely linked to the themes addressed by the International Master of Public Procurement Management (IMPPM) which 12th edition is due to start in March 2024 with scholarships available for prospective candidates coming from Southeast Mediterranean Countries, Africa, the Caribbean and Ukraine.