Net-Zero Procurement Toolkit

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My previous blog explained how deploying Net-Zero Procurement (NZP) with speed and scale will win the GHG reduction trifecta by: 1) reducing product carbon footprints to net- zero; 2) reducing businesses GHG emissions to net-zero; and 3) mitigating the global climate crisis, in time. That may sound like a daunting and complex effort. It’s not, if we use readily available resources. The free, open-source NZP Toolkit has four tools that expedite the nondisruptive integration of NZP into any procurement process.

Definition of Net-Zero Procurement (NZP)

As a reminder, this is the touchstone four-part definition of NZP:


The tools in the NZP Toolkit expedite NZP deployment.

The NZP Toolkit

The NZP Toolkit includes four tools:

  1. NZP product specifications: To determine which goods and services (i.e., products) are the “most low-carbon and circular,” we need to score product offerings on how well they meet carbon- and circularity-related product specifications. Products that earn the highest scores are the ones that are the “most low-carbon and circular.”
  2. NZP supplier assessment: To determine which suppliers are “most committed to science-based net-zero targets and to circularity,” we need to score suppliers on their GHG reduction and circularity commitments, progress, and plans. Suppliers that earn the highest scores are the ones that are the “most committed to science-based net-zero targets and to circularity.”
  3. NZP bid appraisal template: To incentivize suppliers to improve their product’s low-carbon and circularity attributes, as well as to improve their company’s GHG reduction and circularity-related performance, we need to make the above product and supplier company scores matter when appraising bids. The bid appraisal template gives significant weight to those scores.
  4. NZP contract terms and conditions (Ts & Cs): To discourage product and/or supplier greenwashing, suppliers are pre-informed of the potential incentives, financial penalties, and conditions that will be used in contracts with winning bidders, to ensure the integrity of their product and supplier scores and their follow-through on improvement plans.  

Pre-procurement checklist

Before issuing a tender, check that the product’s function is still required. (e.g., cloud storage can replace filing cabinets)

Then, check whether any the following circularity-related options would be possible:

  • Is the current product repairable / upgradable? (e.g., IT upgrades)
  • Could other in-house assets satisfy the desired function? (e.g., share internally)
  • If we procure this product, could we share it internally or externally and avoid other purchases? If so, might other parties share the cost?
  • Are other “access over ownership” / Product-as-a-Service (PaaS) options viable? (e.g., managed services, leasing, renting, borrowing, pay-for-use, sharing). Carbon footprints only need to be accounted for on new, purchased products, in the year they are bought. These non-purchase acquisition approaches eliminate that requirement, so their embodied carbon footprints are deemed to be zero.
  • Could a used / pre-owned / refurbished product satisfy the desired function? It’s not new, so its carbon footprint has already been, or should have been, accounted for by its previous owner. To avoid double accounting, carbon footprints of pre-owned products are deemed to be zero.

If none of those options are appropriate, the organization needs to purchase a new product to satisfy the user/client department’s needs. The four tools in the NZP Toolkit help with that.

1. NZP product specifications

Product quality and performance specifications always receive the most attention by procurement professionals and their user/client departments. They should. NZP does not replace those user-desired product quality specifications; it adds organization-desired low-carbon and circularity specifications to them. These are additional product quality specs, as shown in the product quality section of the Best Value section of this figure:

See the “Best Value vs Best Price” blog for how buyers add organization-desired low-carbon and circularity attributes of products and suppliers to user-desired performance attributes to determine overall product quality.

Sustainability / low-carbon / circularity attributes may be new to procurement staff. They are usually not sustainability experts. If there are sustainability professionals in the organization, they can helptheir procurement colleagues. Here are some sample product low-carbon and circularity specifications to get them started:

Notice that recycled content of product and packaging are included in the specs. That’s because recycled content reduces carbon footprints by eliminating GHG contributions from Tier 2, 3, and 4 suppliers. as shown in this figure:

Additional low-carbon and circularity specs and ecolabels for specific product categories are readily available from these government websites:

Also, sustainable procurement support organizations like the Sustainable Purchasing Leadership Council (SPLC), the Canadian Collaboration for Sustainable Procurement (CCSP), ECPAR, the Circular Innovation Council, the Procura+ Network, and the Sustainable Procurement Pledge (SPP) encourage their members to share specifications and eco-labels that they use for various product categories.

Product low-carbon and circularity specifications are important. In an NZP procurement system, supplier GHG reduction performance and use of circular design are even more important.

2. NZP supplier assessment tool

In an NZP system, suppliers are scored on their commitment to net-zero and to circular design. The Toolkit includes the free, open-source, generic Net-Zero Ambition Assessment Tool (NZAAT). It is comprehensive and its SME-friendly questions are based on questions asked by other questionnaires that assess a company’s commitment to net-zero targets (see the Comparison – Net-Zero Questionnaires). It uses multiple-choice questions to score the organization’s commitment to, and progress toward, science-based net-zero targets and to circularity.  It also suggests over three dozen actions that would reduce Scope 1, 2, and 3 GHG emissions. Here is a sample dashboard to illustrate how NZAAT scoring works:

NZAAT is written in Excel, so it can be easily tailored to better suit an organization’s needs. Users can translate it into other languages, change question weightings, change scoring formulas, use it as a base for an online app, and integrate elements of it into their current supplier-facing tools.

3. NZP bid appraisal template

It’s good to determine the above product and supplier scores. It’s even better if the customer / buyer makes them matter. Giving significant weight (i.e., at least 10% of the points) to both scores in the bid appraisal does that. The NZP toolkit includes a sample bid appraisal template.

Notice that price and product performance scores are still weighted heavily – 40% and 30% of the points in the above example – but product and supplier scores on low-carbon and circularity are given at least 10% of the points.

This is the signature feature of an NZP system. NZP makes suppliers’ GHG reductions and circularity matter because scores on product and supplier low-carbon and circularity attributes are significantly weighted in the buyer’s / customers’ bid appraisal. That’s how NZP incentivizes suppliers to improve their product and company scores, so that they earn more points than their competitors and win more bids. What interests customers fascinates suppliers.

4. NZP contract Ts & Cs

In an NZP system, contracts with winning suppliers stipulate an appropriate combination of incentives, financial penalties and conditions to ensure winning suppliers’ pledged net-zero and circularity targets are met. The Tool incudes the sample terms and conditions (Ts & Cs)

  • Financial penalties / bonuses re completion of the supplier’s short-term net-zero action & circularity planned actions.
  • Preferential payment terms or financing rates based on carbon reduction targets and progress toward circular design.
  • Verification of supplier score on the net-zero GHG plans questionnaire by qualified 3rd party. Contract termination if verified score is >10% lower.
  • Suppliers must publicly communicate their net-zero & circularity scores, commitments, plans, and progress.
  • Requirement that supplier require their CEO’s compensation be linked to meeting their short-term circularity and net-zero targets. (In 2023, 61% of incentive plans had environmental / emission reduction measures.)
  • Contract termination if specified net-zero & circularity targets are not met.

The open-source NZP Toolkit includes the four add-ons described above, plus a Total Cost of Ownership (TCO) calculator for use, if appropriate. The Toolkit is downloadable from here. It enables an organization to reduce its purchased products’ carbon footprints to net- zero; helps reduce their own and their suppliers’ GHG emissions to net-zero; and helps mitigate the global climate crisis.

Net-Zero Procurement is one of the most powerful market forces to engage business in the race to net-zero. The NZP Toolkit expedites its integration into any procurement system. Let’s use it.


Note: This companion pamphlet provides an overview of the Net-Zero Procurement Toolkit. The toolkit is one of my most valuable resources. Figures in this blog are from slides in my Master Slide Decks, to which anyone can subscribe. For blog subscribers, please click here to visit my site and provide feedback.