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Companies bidding for major government contracts face green rules

New measures which require businesses bidding for major government contracts to commit to achieving net zero emissions come into force.

The implementation of these rules will help deliver the manifesto promises made by this government to reach net zero carbon emissions by 2050. The requirements will apply to any companies bidding for government contracts worth more than £5million a year, not just those who are successful.

The UK is the first country in the world to put such a measure in place, underlining the government’s leadership in the fight to tackle climate change.

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.

Andrew Griffith, UK Net Zero Business COP Champion, said:

“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.”

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) and Scope 2 (indirect owned) emissions as part of the Streamlined Energy and Carbon Reporting regulations published in 2018.

The new rules will go further, requiring 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 for the first time. Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint. Understanding, reporting and reducing these emissions will play a substantial role in decarbonising governments supply chain, and the UK economy as a whole.

The new rules will drive forward the government’s green agenda while also striking a balance to not overly burden and potentially exclude small and medium sized enterprises (SMEs) from bidding for government work.

The measures will apply to all central government departments as well as their Executive Agencies and Non-Departmental Public Bodies.

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