On 05 June 2021, Government Commercial Function published a Procurement Policy Note (PPN 06/21) that mandates Carbon Reduction Plans (CRP) be completed by all suppliers bidding for any central government contract valued above £5 million per annum. In practice, we have found that procurement teams often are also insisting on Carbon Reduction Plans for small, sub £250k contracts. Therefore, to avoid the risk of being excluded from bidding into the UK public sector, suppliers must act now and develop their Carbon Reduction Plan if they have not yet done so.
A Carbon Reduction Plan (CRP) as part of a tender response must be submitted in the format which can be accessed here, along with PPNG 06/21 and associated guidance. The CRP template is identical across procurements. Your company’s CRP must be published on your website, signed by a company director (or senior leadership) and updated at least annually. The following broadly outlines the components of the plan:
A commitment to Net Zero by 2050
The government’s Net Zero target is a commitment to reduce the UK’s greenhouse gas emissions by 100% (compared to 1990 levels). All suppliers are required to pledge their commitment to this in the CRP.
Baseline vs Current Emissions
Your current emissions are divided into three separate scopes, then added up and measured against a previous baseline year. They are measured as CO2e (carbon dioxide equivalent). This unit is made up of the seven greenhouse gases identified by the Kyoto Protocol:
- carbon dioxide (CO2)
- methane (CH4),
- nitrous oxide (N2O)
- hydrofluorocarbons (HFCs)
- perfluorocarbons (PCFs)
- sulphur hexafluoride (SF6)
- nitrogen trifluoride (NF3).
The three scopes are defined as follows:
Scope 1 (direct emissions): These are emissions from activities owned or controlled by your organisation. Examples of this include:
- emissions from boilers, furnaces and vehicles
- emissions from chemical production in process equipment
Scope 2 (energy indirect): These include emissions into the atmosphere associated with your consumption of purchased electricity, heat, steam and cooling. These are a consequence of your organisation’s energy use, but are not associated with sources you own or control.
Scope 3 (other indirect): These are emissions that are a consequence of your company’s actions, but that occur at sources you do not own or control (excluding those identified in scope 2). These emissions typically represent up to 80% of any organisation’s carbon emissions. Examples include:
- Business travel by means not owned or controlled by your organisation
- Employee commuting
- Waste disposal
- Materials or fuels your organisation purchases
- Transportation and distribution between company’s own facilities
- Upstream transportation and distribution (transportation and distribution of products between your company’s tier one supplier and its own operations)
- Downstream transportation and distribution (transportation and distribution of products sold by company to end consumer
How to calculate CO2e: The government has provided resources based on Green House Gases (GHG) conversion factors to help organisations calculate their CO2e emissions, and this can be found online. Organisations may wish to seek guidance within the carbon accounting sector to ensure the data they provide is as accurate as possible. ISO 14064-3 and ISAE 3410 are widely used standards for GHG emission report verification, but there is no specific requirement for companies to audit their carbon footprint reporting.
Emissions Reduction Targets
Once CO2e across the scopes is calculated, your company is required to commit to a target over the next five years to further reduce your emissions. Your actual progress is then plotted on a graph against your target progress, to demonstrate that you are meeting your aims.
Carbon Reduction Projects
Finally, you are asked to describe carbon reduction projects that you have completed or implemented since your baseline measuring year. This may include management measures such as certification schemes like ISO 14001 or PAS 2060, signing up to SBTI or other specific measures through which you can demonstrate tangible emissions reduction.
As you can see, Carbon Reduction Plans will require you to become familiar with the process of calculating emissions and commit to specific targets and projects going forward. Once the proper resources are deployed to the development and completion of these plans however, your organisation will benefit from increased access to public sector work. Additionally, you will be doing your part to tackle the global threat of climate change. All things considered, that’s a win – win for everyone.
NewBusiness.Dev can help you with the process above by reviewing your CRP, by introducing you to Carbon reduction specialists or by providing access to our library of data and resources so that you can create your own CRP more easily. If you would like a helping hand then get in touch – email@example.com.