Net-zero requirements unveiled for government contracts

7th June 2021

Shutterstock 575562766

Related Topics

Related tags

  • Procurement ,
  • Supply chain ,
  • UK government


Shams Tabrez

New measures will require UK businesses to commit to net-zero emissions by 2050 and publish credible carbon reduction plans before they can bid for major government contracts.

Prospective suppliers bidding for contracts above £5m a year will need to have committed to the new requirements by September this year. Firms which fail to do so will be excluded from bidding for the contract.

The UK government is now the first in the world to have put these rules in place, and said that they will support its plan to “build back greener” from COVID-19 by ensuring its suppliers are on a path towards net zero.

Minister for efficiency and transformation, Lord Agnew, 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 new rules will require carbon reduction plans to cover scope 1, scope 2, and scope 3 emissions, including for business travel, employee commuting, transportation, distribution and waste.

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

The approach is similar to the successful prompt payment measure introduced in 2019, which allowed a supplier’s performance in paying their subcontractors to be taken into account quickly when bidding for government work.

All companies bidding for major government contracts will need to comply with the measures, not just those who are successful in winning contracts, further widening their impact.

Tom Thackray, director of infrastructure and energy at the Confederation of British Industry (CBI), said: “As the world looks towards the UK and COP26 for leadership on decarbonisation, business is already playing a vital role in driving progress towards a greener future.

“The CBI has long supported using procurement policy to ensure government spending supports the UK’s environmental objectives, and these changes will encourage more firms across the country to demonstrate their own commitment to net zero when bidding for government contracts.”

Image credit: Shutterstock

Transform articles

UK green jobs set to offer better salaries than high-carbon roles

New jobs that help drive the UK towards net-zero emissions are set to offer salaries that are almost one-third higher than those in carbon-intensive industries, research suggests.

5th July 2021

Read more

The Taskforce on Nature-related Financial Disclosures (TNFD) has today been launched to support financial institutions and corporates in assessing and managing emerging risks and opportunities as the world looks to reverse biodiversity loss.

4th June 2021

Read more

The UK government's investment plans for green jobs lag far behind those of most G7 countries, potentially undermining its net-zero emissions target, the Trades Union Congress (TUC) has warned.

2nd June 2021

Read more

Daisy Lavington shares the main talking points of a recent webinar concerning changing employment patterns in a post-COVID-19 world

28th May 2021

Read more

Ben Kite talks to Chris Seekings about how the UK’s skills gap threatens to undermine the country’s environmental ambitions

28th May 2021

Read more

At the end of March, the IEMA Working Group on Environmental Auditing launched The Value of Environmental Auditing: an IEMA Senior Management Briefing.

28th May 2021

Read more

Nearly half of workers would accept a lower salary to work for an organisation that is socially and environmentally responsible, a survey of over 14,000 consumers in nine countries has uncovered.

22nd April 2021

Read more

In Pearce v Secretary of State for Business, Energy and Industrial Strategy, the claimant applied for an order quashing the Secretary’s consent for the Vanguard wind farm.

26th March 2021

Read more

The UK government has no coordinated plan for achieving net-zero emissions by 2050, despite setting the target in law almost two years ago, a cross-party group of MPs has warned today.

5th March 2021

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert