New measures require businesses to commit to net zero by 2050 to win major government contracts

Prospective suppliers bidding for government contracts above £5m a year must have committed to the government’s target of net zero by 2050 and published a ‘clear and credible’ carbon reduction plan by September.

The measures will apply to contracts offered by all central government departments and arms-length bodies, and suppliers that fail to have their carbon reduction plan in place will be excluded from bidding.

Announced on World Environment Day, the new measures make the UK government the first in the world to put this requirement in place.

A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place to improve.

Large companies must already report parts of their carbon emissions due to Streamlined Energy and Carbon Reporting legislation (SECR), covering emissions from Scope 1 (direct- such as heating and transport fuel) and Scope 2 (indirect such as electricity).

The new rules will go further, requiring the reporting of at least some Scope 3 emissions, which are business travel, employee commuting, transportation, distribution and waste.

Scope 3 emissions often represent the majority of an organisation’s total carbon footprint, particularly when encompassing the full extent which would include the full supply chain and in-use and end of life emissions from products.

The new rules seek to drive forward the government’s green agenda, whilst also seeking to strike a balance to not overly burden and potentially exclude small and medium-sized enterprises from bidding for government work.

Daniel Crowe, Head of Carbon Services at Inspired Energy, commented on the announcement: “This is a significant ruling in ensuring that businesses take steps to reach Net Zero. Government procurement has a powerful ability to drive changes throughout all sectors with steps like this. I would expect similar metrics to become commonplace in all public sector contracting processes in time.”

Inspired Energy are engaging with all their suppliers – both for energy supply contracts and for energy saving products – to understand their current position regarding net zero. If you need any assistance in auditing your own suppliers, or if this announcement impacts your organisation’s activities, Inspired Energy may be able to support you. To find out more, speak to Wayne Brown on 01772 689250 or email wayne.brown@inspiredenergy.co.uk