Businesses must commit to Net Zero to bid for Government contracts

The Government is bringing in new measures so that businesses will be required to commit to net zero by 2050 before they can bid for major public sector contracts.

Under the new measures, by September, prospective suppliers bidding for contracts above £5million a year will need to have committed to the Government’s target of net zero by 2050 and have published a carbon reduction plan. Firms which fail to do so will be excluded from bidding for the contract.

Minister for Efficiency and Transformation, Lord Agnew, said: “The government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to Net Zero.

“Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world leading approach.

“These measures will help green our economy, while not overly burdening businesses, particularly SMEs.”

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.

The new rules will go further, requiring the reporting of some Scope 3 emissions, including business travel, employee commuting, transportation, distribution and waste. Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint.

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