Suppliers should be prepared to be assessed against the PPN criteria when bidding for contracts advertised on or after 30 September 2021.
By 30th September 2021, it will be mandatory for suppliers who bid for large government contracts (over £5 Million) to provide a Carbon Reduction Plan (CRP), detailing their commitment to achieving Net Zero by 2050 and how they will reach the target.
A Procurement Policy Note (PPN06/21) released by Crown Commercial Service in June 2021 sets out how government departments need to take account of suppliers’ Net Zero CRPs in the procurement of major government contracts.
The PPN is subject to the Public Contracts Regulations 2015.
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Why now? The UK’s commitment to carbon reduction
In 2019, the UK Government committed to a target to reach Net Zero by 2050. This means a requirement to reduce at least 100% of net UK greenhouse gas emissions, compared to 1990 levels.
The recent announcement is the government’s next step in the wider strategy to tackle emissions in the private and public sectors. The scheme signals the first exclusion criteria based on Net Zero Targets and aims to drive behaviour change for suppliers. It follows on from other carbon reduction schemes such as Streamlined Energy Carbon Reporting, launched in 2019 requiring qualifying UK companies to prepare and file energy and carbon information, and the Public Sector Decarbonisation Scheme, which provides funding for public sector bodies in England for energy efficiency and heat decarbonisation projects.
Who will be affected by PPN 06/21?
The PPN will affect most suppliers bidding for government contacts for the supply of goods and/or services worth over £5 million per year (ex VAT).
This could include a wide range of companies, for instance, those that offer accountancy, pharmaceuticals, computing hardware or technology.
The PPN applies to contracts controlled by:
- Central Government Departments
- Their Executive Agencies and Non-Departmental Public Bodies, such as HMRC, CPS, and DVLA
Whilst this PPN specifically applies to the above, it is a useful reference point to other public sector organisations in their commitment to meet the national plan to achieve Net Zero carbon emissions.
What must organisations do now?
To prepare to meet the requirements of the new PPN, if companies intend to bid for contracts from the UK Government and are ‘in scope’, they must ensure they prepare a detailed carbon reduction plan (CRP) confirming the supplier’s commitment to achieving Net Zero by 2050. The plan must meet the technical standard published alongside the PPN.
Requirements for the CRP:
- A commitment to achieving Net Zero by 2050 across your UK operations
- Details of your baseline emissions that your carbon reductions methods will be measured against
- An overview of your current emissions across scope 1, 2, and a subset of scope 3
- Your emissions reduction targets in CO2e (Carbon Dioxide Equivalent) and progress to date
- Evidence of your carbon reduction measures and those that will be used to achieve Net Zero by 2050
The carbon reduction plan should be developed using the provided template. The plan should be approved by your organisation’s senior leadership within the 12 months preceding the commencement of the procurement, publicised on your company website, and updated at least annually.
Suppliers may be excluded from applying for government contracts for failing to achieve compliance with the selection criteria, such as failing to make an organisational commitment to reaching Net Zero, disclosing emissions, or showing an evidenced strategy to reduce emissions.
Suppliers should be prepared to be assessed against the PNN criteria when bidding for contracts advertised on or after 30 September 2021.
As gathering the data required to complete baseline and current emissions can take up to 8 weeks (depending on the complexity of supply chains), companies who anticipate bidding for contracts that fall under the PPN should start to prepare now.
How can Anthesis help?
Anthesis can support you to comply with this requirement by helping you formulate a carbon reduction strategy or adapting your existing strategy to meet the government criteria.
Our support extends across the Net Zero journey from understanding and calculating your current carbon footprint and emissions baseline, setting targets, developing strategies, and implementing them across your business and supply chain.
Anthesis works with clients across the public and private sectors. This has included supporting businesses to successfully comply with government criteria, such as Streamlined Energy and Carbon Reporting and the Energy Saving Opportunity Scheme.