Nine Options to Use Internal Carbon Pricing in Procurement

A new online consultation paper explains how organizations can use internal carbon pricing to future-proof supply chains

More and more organizations are using internal carbon pricing (ICP) to demonstrate climate leadership and become future-proof. However, while many organizations are focused on greenhouse gas (GHG) emissions from energy consumption and processes, a large part of their carbon footprint actually comes from the materials and products they buy.

A new online paper by Ecofys, a Navigant company, and The Generation Foundation proposes nine options for governments and companies to use ICP in procurement. These options are based on information from a subset of organizations that use ICP in their procurement decisions, lessons from other sustainable or responsible procurement practices, and insights from carbon pricing and procurement experts.

The objective of the paper is to obtain feedback from procurement and sustainability practitioners on the proposed ICP options for procurement. The paper also aims to inspire more organizations to use ICP to work with suppliers to discover new value creation opportunities, unlock the vast decarbonization potential in their supply chains, and make them more resilient in a low-carbon future.

The work resulted in two best practice guides to corporate internal carbon pricing. ThC-suite guide aims to inspire board members to explore internal carbon pricing as a way to create corporate value. The How-to guide provides practical advice to the corporate team implementing internal carbon pricing.

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