Net Zero Week: Changes to carbon reporting in government procurement

PPN 06/21 means that from the end of September, prospective suppliers vying for public projects worth more than £5m a year will need to commit to becoming net zero by 2050 to be considered.

The new guidance will support the government’s ongoing plan to build back better and greener, will go towards the UK’s overall goal of becoming carbon neutral by 2050 and will prompt companies to implement more robust carbon footprint reporting and planning.

Overall, this is a great step in the right direction, and one that will drive change across the board. Reporting on carbon footprints is something that many companies – particularly large ones – will already have in place, but giving this clearer guidance along with realistic parameters will work towards creating consistency across the board.

More companies will begin to report this data, so it is positive to see such clear guidance with provided templates to make it easier for companies to report this information and form good habits – particularly for those companies that have not yet starting reporting or are struggling with the requirements.

There are a number of aspects companies will need to keep in mind with reporting in the coming years – particularly with the pandemic in mind. The PPN notes that bidding suppliers will need to clearly outline what measures will be taken to reduce emissions from a baseline year prior to the introduction of any carbon reduction strategies. Many companies will set their baselines based on 2020, but this was a year like no other – and this will show in data.

With most people working from home for a large majority of the past year, many companies may see a significantly reduced carbon footprint for 2020 when compared to previous years. So, post-pandemic many companies may see an upswing in carbon footprints as people return to the office – and this is something that will have to be evidenced and considered when comparing yearly emissions.

With many companies also moving to a hybrid setting, we should also consider the implications on business carbon footprints when part – or all – of the workforce’s working week will be carried out remotely. Plus, company growth will also impact the speed at which net zero can be achieved, especially if that growth is rapid.

The overall guidance strikes a healthy balance when it comes to targets and project values, meaning it is not placing heavily stringent thresholds in place to begin with. Setting a £5m project threshold is a reasonable one to begin with rather than going for an extremely low value, but it may be reduced in the future to capture more companies within the requirements.

The guidance sets a minimum standard in terms of reporting, but also offers larger companies an opportunity to present their long-term plans and more ambitious targets, as well as demonstrate where they are not only meeting the guidance but going above and beyond.

As with many government procurement legislation, this guidance applies to government contracts but can be expected to filter through, seeing the wider public sector implement the same requirements.