Companies aiming for government contracts face green rules
A new UK law orders companies who bid for government contracts over £5mn a year, must dedicate themselves to achieving Net Zero emissions by 2050.
The fresh requirements take off close to COP26 and as the UK is the first country in the world to make such a law, it is hoped that it may inspire others to follow.
Sector procurement an essential tool in driving net zero progress
The new requirements come into effect ahead of international climate conference COP26 which the UK will host later this year, with officials at the event working closely with climate experts and campaigners to encourage other countries to follow the UK’s example.
“These new rules show our bold and ambitious agenda to achieve Net Zero by 2050, protecting ourselves and future generations”, said Steve Barclay, Chancellor of the Duchy of Lancaster. “Government spends £290billion a year on procurement and it’s right that we use this spending power to green the economy. Working arm-in-arm with business, we are taking giant strides to ensure this country is building back greener and tackling climate change.”
“The message to businesses is clear - engaging on net zero is no longer an option but a necessity from today, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts”, said Andrew Griffith, UK Net Zero Business COP Champion. “As we prepare to host the UN COP26 Summit this is exactly the type of leadership and collaboration required from government and business to show the world that we are serious about investing in a greener, more prosperous future.”
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 emissions
- Scope 2: indirect emissions
Procurement companies must adhere to new scope rules
The new rules require a commitment to achieving Net Zero by 2050 at the latest, and the reporting of some Scope 3 emissions, including:
- Business travel
- Employee commuting
- Transportation
- Distribution and waste
“The scale and breadth of spend makes public sector procurement an essential tool in driving net zero progress across all sectors and regions of the country”, said CBI’s Director of Decarbonisation, Tom Thackray. “This new policy will provide a sharp focal point for public-private partnerships. Responding to their customers and investors, businesses are eager to accelerate progress towards net zero as part of a broader sustainability agenda. Working with the public sector they can demonstrate their excellence and underline the world-leading progress many industries have already made.”
“Achieving Net Zero means everyone – government, businesses, the VCSE sector and the public as a whole - working together as one”, said Mark Fox, Chief Executive of the BSA. “Harnessing the power of public procurement is one important tool at the government’s disposal. That’s why the BSA welcomes this move. We and our members contributed to the process of drawing it up. It is another important step on the road to Net Zero. We are pleased to see government, alongside business and the VCSE sector, taking a lead on this issue."
