From September 2021 all firms bidding for major contracts worth over £5m for Central Government and arms-length public bodies must submit a "clear and credible" Carbon Reduction Plan that details their commitment to achieving net zero emissions by 2050. For many businesses this may be their first exposure to carbon footprinting.
For now, the £5m threshold means that the requirement will be mandatory for major contracts only, however it remains to be seen whether it is adopted for smaller contracts and by local authorities for their procurement projects.
This article gives a brief explanation of a compliant carbon reduction plan and explains how to go about writing one.
A compliant carbon reduction plan consists of 6 elements:
Carbon Reduction Projects that have been completed and that you plan do to in the future (including environmental management measures, certification schemes or specific carbon reduction measures that will be in effect during the performance of the contract)
Declaration and Sign Off (a director must sign off the plan)
The procurement note applies to any organisation wishing to bid for all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies when procuring goods and/or services and/or works with an anticipated contract value above £5million per annum (excluding VAT) averaged over the life of the contract from September 2021.
It is important to realise that the requirement to supply a carbon reduction plan is at the time the bid is submitted. So, if a compliant plan is not submitted the bid will not go forward into the procurement process.
There is a "related and proportionate" clause but the guidance makes it clear that most contracts over £5m are expected to comply.
The guidelines are clear that the bidding organisation will not be scored based on the emissions reported or on the quality of the measures planned. It is simply a PASS/FAIL based on providing the information required.
The most important thing to do in preparing to write your plan is to calculate the carbon emissions, not only of your energy use, but also of some elements of your value chain. If you have not done this before, or if you have only reported your Scope 1 and 2 emissions (the emissions from your energy use as required by SECR) then you need to make this a priority as in our experience it will typically take 8-16 weeks to do first time round.
If this is the first time you have calculated your emissions, your Current year will be the same as your Baseline year.
The next things to do are to set the target date to achieve net zero emissions and set reduction targets for the next 5 years.
If this is the first time you have created a carbon reduction plan we would make the following recommendations:
Achieving net zero emissions is a long-term project that will need a consistent focus on making year-on-year reductions. We strongly recommend embedding a carbon management system into your operations so that carbon reduction becomes part of the way you do things, just like growing your profits.
We recommend adopting an annual process like the one illustrated below:
Alternatively, you could implement an externally accredited environmental management system such as ISO14001 or our own Go Climate Positive programme.
If you have done your preparations well then completing your plan is the easy bit. The government guidelines contain a template for your plan and we have created two versions you can download and use straightaway.
If you don't have time, or you want the reassurance of someone to help you through the process get in touch. Our Carbon Coaches have an in-depth understanding of the requirements and can walk-you though the process step-by-step, we can even do the calculations for you.
Eoin (pronounced like "Ian") is the Chief Carbon Coach and founder of Go Climate Positive. He is a Practitioner member of IEMA (the Institute of Environmental Management) and a sustainability lead on the Cheltenham Economic Recovery Task Force.
Eoin says, "Sustainability is no longer a 'nice to do', it is business critical. My goal is to make it accessible and affordable for every business, however big or small , no matter their market sector."