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Carbon Reduction Plan

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The Government has published a new measure that requires organisations bidding for major government contracts to commit to achieving net zero by 2050 and publish a ‘Carbon Reduction Plan’.

To explain how this works, the Cabinet Office has produced a Procurement Policy Note (PPN), a document setting out how government will take account of organisations’ carbon reduction plans when awarding government contracts. 

The guidance applies to all government departments and agencies, and to contracts whose value exceeds £5m per annum excluding VAT. It will come into effect for contracts advertised on or after 30 September 2021. But over time, it may affect more contracts and more sub-contracts for more firms, so it is worth understanding the requirements now.

Key points:

  • When bidding for government contracts, organisations must provide a carbon reduction plan confirming their commitment to 2050 Net Zero and setting out environmental management measures in place that will be utilised during the delivery of the contract. 
  • Organisations’ carbon reduction plans will have to meet standards including:
  • Providing current emissions reporting for greenhouse gasses 
  • Setting out environmental measures you have in place, including certification schemes, that will be applied to contract performance 
  • Carbon reduction plans should be published and signposted on the bidding organisation’s website, approved by a director or equivalent senior staff member.
  • Environmental considerations and carbon reduction will be a factor in most contracts, including:
  • Contracts which have a direct impact on the environment
  • Contracts which require the use of buildings 
  • Contracts which require the transportation of goods or people 
  • Contracts which require the use of natural resources 

A template Carbon Reduction Plan can be found here.