The new rules apply to all firms bidding for government work worth more than £5m a year, not just those who are successful.
A carbon reduction plan sets out where a firm’s emissions come from and the environmental management measures that they have in place.
Many large contractors 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.
These Scope 3 emissions represent a significant proportion of a firm’s carbon footprint and include business travel, employee commuting, transportation, distribution and waste for the first time.
The Government argues reporting and reducing these emissions will play a substantial role in decarbonising its supply chain, and the UK economy as a whole.
The measures will apply to all central government departments as well as their executive agencies and non-departmental public bodies.
Andrew Griffith, UK Net Zero Business COP Champion, said 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 from bidding for government work.
“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.
“As we prepare to host the UN COP26 Summit this is exactly the type of leadership and collaboration required from government and business to show the world that we are serious about investing in a greener, more prosperous future.”