Summary
Cut through the green tape
We don't push agendas. At Net Zero Compare, we cut through the hype and fear to deliver the straightforward facts you need for making informed decisions on green products and services. Whether motivated by compliance, customer demands, or a real passion for the environment, you’re welcome here. We provide reliable information—why you seek it is not our concern.
Details
Deep dive
Background
Government procurement in the UK is a major means of public service delivery. According to the latest official estimates, in 2020/2021 the UK government spent £329 billion (32% of the total government spending for the year) buying a range of goods and services from the private sector. Between 2014/15 and 2020/21, on average £277.6 billion was spent on government procurement. The UK government published over 38,000 tenders and awarded 70,000 contracts in 2023. The bidding process for government contracts is therefore a key tool at government's disposal for directing private sector action towards certain national policy objectives. Accordingly, the UK government published the Procurement Policy Note (PPN 06/21) in June 2021 requiring all "Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies" to include climate-related disclosures as a selection criterion for prospective suppliers. The climate disclosure criterion applies to the procurement of goods, services and works with an annual value of over £5 million (excluding VAT) which fall under the scope of the Public Contracts Regulations 2015.
Before the release of the Public Procurement Note (PPN) 06/21, there were no specific, climate disclosure rules for public procurement in the UK. However, some related policies and frameworks encouraged or indirectly addressed environmental and sustainability considerations in public procurement. For example, the Greening Government Commitments (GGCs) first published in 2011, set targets for UK government departments to reduce their environmental impact (including carbon emissions) while encouraging sustainable purchasing practices. The Procurement Policy Note (PPN) 06/20 (June 2020) also established a "social value model" with climate change as one of its themes.
Requirements of the PPN 06/21
With effect from 30 September 2021, the PPN 06/21 requires bidding suppliers to submit a Carbon Reduction Plan (CRP) stating the supplier’s commitment to attaining net zero emissions by 2050 in the UK, along with environmental management processes that they have established and will implement during the contract's execution. PPN 06/21 provides a template for the CRP. Among other information, the CRP, which should also be published on the supplier's website, should include the supplier’s Scope 1, Scope 2, and a subset of Scope 3 emissions following the GHG Protocol. The CRP should also disclose the supplier's emissions in CO2e (Carbon Dioxide Equivalent) for the six greenhouse gases covered by the Kyoto Protocol.
Which companies are affected by the PPN 06/21
Suppliers bidding for UK government contracts with an anticipated value exceeding £5 million annually must comply with the emissions disclosure requirements of the PPN 06/21. The rule is therefore targeted at relatively larger suppliers bidding for high-value UK government contracts. It is stated that environmental considerations and carbon reduction will play a role in most, if not all, contracts, making the application of this PPN relevant in the majority of cases.
Consequences for non-compliance
An obvious consequence of not providing the CRP with the required information is disqualification from the bidding process. Moreover, the provision of false or misleading claims might be liable to legal action. Though not mentioned in the PPN 06/21, false or misleading emissions claims by bidding suppliers could result in legal action under existing misrepresentation laws in the UK. Suppliers must therefore ensure that the statements in their Carbon Reduction Plans are accurate and verifiable.
