Firms must commit to net-zero to win government contracts over £5 million

Interpreted from a UK Government Press Release:

By Reiss Hilton

The government is yet again taking a world-leading approach in a bid to decarbonise UK industry.

It will be the first in the world to use its heavy purchasing power (around £290 Billion each year) to transform the UK into a net-zero economy by requiring that all prospective bidders on large government contracts demonstrate a commitment to achieve net-zero by 2050.

From September 2021, all new tenders will be subject to a much more meticulous procurement policy that places a substantial weighting on carbon reduction and environmental credentials. This new initiative will support the government’s plans to build back greener by ensuring that suppliers have measured and documented their emissions with a published carbon reduction plan demonstrating how they will achieve net-zero emissions by 2050. Firms that fail to do so will be excluded from bidding for the contract.

Net-zero requires that companies measure and eliminate emissions resulting from direct operations (Scope 1), energy purchasing (Scope 2) and the supply chain (Scope 3). This will mean companies will need to go further than just reporting on current mandatory categories (Scope 1 & 2) and consider wider environmental impacts from business travel, employee commuting, transportation and distribution and waste.

Similar procurement policies have been mirrored in the private sector as large corporations must take account of their suppliers’ emissions to be able to achieve net-zero themselves. Procurement reform is likely to be the main driver behind industrial decarbonisation, urging private corporations to take independent action on climate change. After all, a net-zero UK relies on a collaborative approach to carbon reduction.

We assist companies on routes to net-zero. Our effective carbon management plans ensure a continual reduction in carbon through rigorous and financially-driven reduction plans, demonstrating a clear path to carbon neutrality and allowing free certification upon achievement.