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Government sets net zero rule for suppliers

07/10/21

Mark Say Managing Editor

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A new rule has come into place requiring suppliers bidding all central government contracts worth over £5 million to commit to achieving net zero greenhouse gas emissions by 2050.

The Cabinet Office announced the rule, which came into force at the beginning of the month and applies to all departments, executive agencies and non-departmental public bodies.

It said the requirement will apply to all bidders, not just those that are successful, and that the UK is the first country in the world to put such a measure into place.

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 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.

Ambitious agenda

Chancellor of the Duchy of Lancaster Steve Barclay said: “These new rules show our bold and ambitious agenda to achieve net zero by 2050, protecting ourselves and future generations.

“Government spends £290 billion 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 measure’s relevance to future ICT contracts reflects the repeated emphasis on procurement on the Greening government: ICT and services strategy 2020-25. It identifies a reduction in carbon emissions as one of the strategic outcomes, and highlights minimum business rules – developed in consultation with the tech industry – for suppliers to meet net zero targets by 2050.

It adds that they will have to produce a road map and action plan by 2025, although the new rules effectively accelerate the requirement.

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.”

Image from iStock, Maxshot

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