All Companies bidding on Public Contracts in the UK must publish a Carbon Reduction Plan

Big news for all companies bidding on public contracts in the UK worth £5 million or more. From 30^th September 2021 any company doing so must make a commitment to achieving net zero by 2050 and publish a ‘Carbon Reduction Plan’.

In the biggest example to date of “greening the supply chain” the Cabinet Office has produced a Procurement Policy Note (PPN) setting out how government will take account of organisations’ carbon reduction plans when awarding future government contracts.

The guidance applies to all government departments and agencies, to contracts whose value exceeds £5m per annum (excluding VAT) and will come into effect for contracts advertised on or after 30 September 2021. Although the current threshold is £5m per annum this is expected to fall in future, affecting more contracts and suppliers, as the requirements of a Net Zero society start to impact all levels of the UK business community.

More information on PPN 06/21 is available via: https://www.gov.uk/government/publications/procurement-policy-note-0621-taking-account-of-carbon-reduction-plans-in-the-procurement-of-major-government-contracts

In order to meet the requirements being introduced suppliers will first need to determine their ‘baseline’ carbon emissions by measuring their direct and indirect emissions relating to their UK operations.

In brief carbon emissions fall into 3 categories, or scopes:

Scope 1: Direct emissions from owned or controlled sources of energy

Scope 2: Indirect emissions from the generation of purchased energy

Scope 3: Indirect emissions relating to the supply/value chain

Companies need to measure and record Scope 1, 2 & 3 carbon emissions for their baseline year, taking into account any changes that have occurred in the company structure and operations.

Once baseline carbon emissions (or the ‘carbon footprint’) have been calculated the requirement is that companies must provide a carbon reduction plan confirming their commitment to achieving Net Zero by 2050, and setting out environmental management measures that will be applied during the delivery of the contract being bid for. The Carbon Reduction Plan must then be published on the supplier’s website.

In a major change to how large public contracts are bid for these changes may introduce an additional layer of bureaucracy to an already complicated process, but this is where Inteb are here to help. By applying our experience and expertise in helping business understand and reduce their environmental impact, and specifically carbon emissions, we are on hand to provide bespoke and customised services to companies of all sizes and across multiple industries, to help them understand the requirements and successfully keep and win new government contracts, while making significant improvements in carbon reduction, resource efficiency and business costs.

Through a combination of our carbon accounting software platform and low carbon consultancy services we can help measure, guide and reduce carbon emissions in line with the requirements of PPN 06/21 while helping with other compliance requirements, such as SECR and ESOS, along the way.