Firms must pledge net zero target to bid for public work

Aaron Morby 3 years ago
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Contractors wanting to bid for public works jobs will have to pledge to be net zero by 2050 under new Government rules.

From 30 September, contractors seeking to bid projects worth more than £5m a year will have to publish clear and credible carbon reduction plans before being considered.

The move mirrors the prompt payment measure introduced in 2019, which allowed a contractor’s performance in paying their subcontractors promptly to be taken into account when bidding for government work.

The Cabinet Office has now warned firms that fail to set out a carbon reduction plan will be excluded from bidding for 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.

The new rules announced at the weekend will go further, requiring the reporting of some Scope 3 emissions, including business travel, employee commuting, transportation, distribution and waste.

These Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint.

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

The Carbon Reduction Plan should be updated at least annually and published on a firm’s website.

Director will be expected to sign off the pledge to demonstrate a clear commitment to emissions reduction at the highest level.

Minister for Efficiency and Transformation, Lord Agnew of Oulton, said:  “The government spends more than £290bn 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.”

The measures will apply to all central government departments and arms-length bodies.

Click here for further information and a template plan.

 

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