‘The CO2 Performance Ladder has enormous potential to make an impact in Europe'

Power of procurement

Governments can significantly influence the emissions of companies and heavy industries by making carbon reduction an important criterion when purchasing goods and services. The CO2 Performance Ladder, developed and managed by the Foundation for Climate Friendly Procurement and Business (SKAO), harnesses the power of procurement to reduce the carbon emissions of governments, companies, supply chains and heavy industries. It does this by giving companies a financial advantage in tendering processes when they commit to reducing emissions. A great way to stimulate innovations and carbon reduction. In 2022, SKAO will investigate whether more European governments are ready to reward sustainable innovation. This could help direct almost €2 trillion of public spending towards low-carbon production and consumption.

Who uses the CO₂ Performance Ladder and what is the effect of its use? 

Maud: “The Ladder has a dual function, serving as both a CO₂ management system and a green procurement tool. Over 1200 organisations in the Netherlands are already certified for the CO₂ Performance Ladder as a carbon management system, and over 200 contracting authorities are using the CO₂ Performance Ladder in their procurement processes to reward more sustainable contracters. Over the past twelve years, the CO₂ Performance Ladder has developed into the most important sustainability instrument in the Netherlands, helping businesses and governments to achieve ambitious and structural CO₂ (and cost) reductions within their business operations, during projects and in their value chain.”

George: “In the Dutch infrastructure sector, the CO₂ Performance Ladder has brought about a sustainable revolution, and its success has not gone unnoticed further afield: sectors such as IT, facilities services, landscaping and waste management have begun certifying on the Performance Ladder. Scientific research shows that certified organisations reduce their CO₂ emissions at twice the rate of uncertified organisations. Furthermore, by using the CO₂ Performance Ladder, all of the companies under investigation established a fully-fledged energy management system, which includes structural monitoring of emissions trends and embeds  CO₂ reduction as a key business strategy.”

Maud: “The Ladder has really caused a cultural shift, not only at the company level but also for the supply chain. Companies and governments work together to reduce CO₂ as supply chain partners Contractors use the CO₂ Performance Ladder to reduce CO₂ in their own organisation, in projects and in the chain. For example, if a local contracting authority begins using the Ladder, you will quickly see that several companies in the region respond, and start working with the CO₂ Performance Ladder – for example the number of certified organisations in Zeeland province jumped rapidly after the province started using the Ladder in its tenders.”

How does the CO₂ Performance Ladder differ from other sustainability instruments? 

George: “The CO₂ Performance Ladder is not only about CO₂ reduction, but also about the conditions necessary for that - creating insight into your climate impact, transparency in the form of communication and collaboration with other organisations to create wider change. A key feature of the Ladder is that companies have license  to implement the requirements of the Ladder in the way that works best for their organisation, rather than making particular measures obligatory.”

Maud: “What I noticed is that while many other sustainability instruments are binary (you either have it or not), the Ladder is not. The Ladder has five ambition levels, which continuously pushes you to keep improving yourself. What’s more, there are very few sustainability systems that are also used as a tendering instrument with which you can gain an award advantage.”

The use of the CO₂ Performance Ladder leads to an accelerated CO₂ reduction in companies. How does this work in practice?

George: “The purpose of the CO₂ Performance Ladder is to realise a substantial increase in companies’ CO₂ reduction by encouraging measures within operational management, projects and the supply chain. Research by the University of Utrecht shows that the CO₂ Performance Ladder is responsible for a strong CO₂ reduction in the construction and civil engineering sector, that would not have been realised without the Ladder."

Maud: “Companies at the top levels of the CO₂ Performance Ladder are required to make value chain analyses. A chain analysis is a consideration of your business process and value chain, aimed at mapping out CO₂ emissions throughout the process. For example, by analysing the waste processing process, the purchased materials or the energy consumption of your product when it’s used by your customer. In short, emissions that are not directly caused by the company itself, but by suppliers or customers. So CO₂ is not only reduced within one’s own organisation but also in the value chain.”

And now you want to conquer Europe? 

Maud: “The CO₂ Performance Ladder has brought about a sustainable revolution in the Netherlands and as such the success as a CO₂ management system and a GPP instrument has caught the attention of many on the international stage. Examples of this international acknowledgement include the OECD recognising the CO₂ Performance Ladder as a Best Practice for sustainable procurement, and the three Belgian regional governments launching a three-year pilot to implement the Ladder in their procurement processes. Furthermore, knowledge is regularly exchanged with (local) governments, businesses and NGOs in other European countries, and around the world who are interested in our instrument. I think that the CO₂ Performance Ladder has enormous sustainable potential to make an impact in Europe.”

George: “Every year, European government bodies spend around  €1.8 trillion, which represents approximately 14% of the EU's Gross Domestic Product (GDP). Although GPP is considered an effective policy instrument in the fight against climate change, many European countries are still encountering a number of obstacles that are hindering the implementation of this kind of policy. The main obstacles in this regard are insufficient political support, the perception that green services and products are more expensive, low levels of GPP expertise and the lack of practical instruments. We hope the Ladder can address some of those issues and help more parties to harness the Power of Procurement to drive carbon reductions.”

Maud: “From a legal and procurement point of view, there is no threshold to deploying the CO₂ Performance Ladder in Europe. Our system is based on international standards and European law, and so can be used in practice by European contracting authorities.” George: “It’s important to say that our ‘conquest’ will be very cooperative! It is not our intention to tell others  that they should implement GPP in their own country, or to impose our way of doing things. But we do think the Ladder can be of help to more countries and organisations, and if there is interest, we would work together with the contracting authorities to  integrate the Ladder in that particular context, and still make impact”

Accelerating Decarbonisation in Europe Through the Power of Procurement

Together with partner IISD, SKAO is seeking to expand the use of the instrument beyond the Netherlands and Belgium. Ultimately, the project aims to accelerate carbon emission reductions in Europe through green public procurement. IISD supports SKAO in identifying European countries and business networks that are good candidates to  use the CO₂ Performance Ladder. This includes a quick scan of all European Union member states (plus Switzerland, Norway and the United Kingdom), as well as an in-depth feasibility study of countries and networks, selected on the basis of the quick scan.

Maud: “In the coming 1.5 years, SKAO will, together with IISD, investigate which European contracting authorities are interested and suitable to apply the Ladder by means of a quick scan and a feasibility study. The scope of the project does not only include public contracting authorities (ministries, provinces, cities, etc.), but international buyer groups and networks will also be considered.

I would like to make an appeal to companies and governments. We’re looking to broaden our international network. Who and which organisations and networks should we definitely approach for this project? We are looking for organisations that can help us with this. So don’t hesitate to give me a call!”