Firms bidding for major government contracts must commit to Net Zero

Bidders for new government contracts worth £5 million or more will be required to pledge to meet Net Zero carbon emissions by 2050, the Cabinet Office has announced.

Making the announcement on World Environment Day, from September 2020 firms will have to publish "clear and credible" carbon reduction plans, the quality of which will be weighed up as part of the assessment of technical and professional capabilities to meet contract terms.

A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place. Some large companies already self-report parts of their carbon emissions, known as Scope 1 (direct) and Scope 2 (indirect owned) emissions.

The new requirements will go further, requiring the reporting of some Scope 3 emissions, including business travel, employee commuting, transportation, distribution and waste.

Scope 3 emissions often represent a significant proportion of an organisation’s carbon footprint.

Speaking about the plans, Lord Agnew, the UK Government Minister for Efficiency and Transformation, said:

"The government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to net-zero.

"Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world leading approach.

"These measures will help green our economy, while not overly burdening businesses, particularly SMEs."

The new Net Zero requirements come ahead of the UK hosting the presidency of the UN Climate Change Conference, COP26, in Glasgow later this year, in which the Government is positioning to demonstrate itself as a global leader in tackling the climate emergency.

This Procurement Policy Note applies to all UK central government departments, their executive agencies and non-departmental public bodies in England only.

The UK’s devolved administrations will make their own policy decisions, but are unlikely to deviate significantly from the UK Government’s position. Indeed some may go further and faster in achieving Net Zero within their own jurisdictions.

A template carbon reduction plan and other tools and services to help with carbon footprint calculation accompanies the Procurement Policy Note and can be accessed here.

Photo by Jacqueline Godany on Unsplash