The US government’s $5 trillion purchasing power has made companies greener, study finds

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By Gary Thill & Laura Counts, UC Berkeley Has News. 

Excerpt: When the U.S. government flexes its $5 trillion annual purchasing power to encourage environmental progress, companies listen—and act. A new study from the UC Berkeley’s Haas School of Business shows that firms have reduced toxic emissions, developed greener products, and taken concrete steps to address climate change in their pursuit of government contracts. The study, led by Haas professor Omri Even-Tov, analyzed ten years of data on about 2,700 companies headquartered across more than 350 U.S. counties. The companies seeking government contracts not only started talking more about climate disclosures, but they cut emissions by up to 10,000 pounds per year per county and were 5% more likely to develop green technology patents. “Our research shows that when the government sets expectations as part of procurement, it’s not just greenwashing,” says Even-Tov, an associate professor of accounting and co-faculty director for the Center for Social Sector Leadership. “Companies are actually getting greener and it’s making a big change in the world.” The paper, forthcoming in the Review of Accounting Studies and coauthored by Guoman She, Lynn Linghuan Wang, and Detian Yang of the University of Hong Kong, is among the first to empirically show how rules associated with government purchases of goods, supplies, equipment, services, and construction have nudged companies to take environmental action without requiring further regulations.... 

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