On 5 June 2021 Cabinet Office published PPN 06/21 ‘Taking account of carbon reduction plans in the procurement of major government contracts.

What is it and what do I have to do?

The PPN requires suppliers who wish to bid for major government contracts worth over £5 million per year to provide a Carbon Reduction Plan (CRP) confirming the supplier’s commitment to achieving net zero by 2050 in the UK. This plan must detail the supplier’s operational emissions and set out the environmental management measures that they have in place which will be in effect during the performance of the contract.

PPN 06/21 will come into effect for applicable procurements from 30 September 2021.

In summary:

As part of assessing a supplier’s technical and professional ability, In-Scope Organisations should include, as a selection criterion, a requirement for bidding suppliers to provide a Carbon Reduction Plan confirming the supplier’s commitment to achieving Net Zero by 2050 in the UK, and setting out the environmental management measures that they have in place and which will be in effect and utilised during the performance of the contract.

Carbon Reduction Plans must meet the required standard as set out by the supporting guidance to this PPN. This includes, but is not limited to:

  • Confirming the bidding supplier’s commitment to achieving Net Zero by 2050 for their UK operations.
  • Providing the supplier’s current emissions for the sources included in Scope 1 and 2 of the GHG Protocol, and a defined subset of Scope 3 emissions.
  • Providing emissions reporting in CO2e (Carbon Dioxide Equivalent) for the six greenhouse gases covered by the Kyoto Protocol4
  • Setting out the environmental management measures in effect, including certification schemes or specific carbon reduction measures you have adopted, and that you will be able to apply when performing the contract and that support achieving Net Zero by 2050.
  • Publication of the CRP on the supplier’s website.

Environmental considerations and carbon reduction will be a factor in most, if not all, contracts and therefore it is expected that in the majority of cases, the application of this PPN will be relevant. This may include, but is not limited to:

  • Contracts which have a direct impact on the environment in the delivery of the contract;
  • Contracts which require the use of buildings by staff engaged in the delivery of the contract;
  • Contracts which require the transportation of goods or people used in the delivery of the contract;
  • Contracts which require the use of natural resources in the delivery of the contract.

How can we help?

We have the tools to help you. Using our Energinet EnMS will enable you to monitor and manage your Scope 1,2 and 3 GHG emissions on this ISO50001 accredited cloud-based software. We can also provide all the monitoring hardware, if required and all the ongoing support and training.

Utilising the data obtained will also enable you to target energy and waste reduction opportunities, not only reducing your GHG emissions but also your associated costs which will improve your bottom line.

The above policy is directed at suppliers for Government contracts; however, it will likely extend as a practice and as a requirement in the private sector. It makes business sense to start the exercise now and be prepared for future legislation and if carried out effectively you will save money.