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Bids for public sector contracts will need net zero commitment

08 June 2021

New rules will be implemented by the government requiring those bidding for public sector contracts to have published net zero carbon emissions commitments.

The new rules will be implemented from 30 September and net zero plans will be required to be clear and credible.

Those failing to comply with the new requirements will be excluded from the bidding process, the government has stated.

This is the latest and - in terms of potential scale - one of the most notable announcements this year, as the UK continues its increasing focus on the need to achieve net zero carbon emissions by 2050.

Net zero carbon emissions statements will be required for all those bidding for public sector contracts worth more than £5m a year.

The new requirements have been compare to the governments prompt payment code, designed to ensure that those placing bids for public sector work treated their subcontractors fairly.

A notable requirement within the new government rules is the need for companies to report on their Scope 3 carbon emissions, such as business travel, commuting, transportation, distribution and waste.

While many include Scope 1 and Scope 2 carbon emissions in their current reports, the need to include Scope 3 details will require more attention to detail in this area.

Carbon reduction plans will need to be updated annually as a minimum requirement and published on each organisation's website.

The plans will also need to be signed by senior board members to ensure commitment to carbon emissions reduction at the highest level of each company.

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

Minister for Efficiency and Transformation Lord Agnew of Oulton said it was was important for the government to use is £290bn annual spend "to help transform our economy to net zero.

"Requiring companies to report and commit to reducing their carbon emissions before bidding for public works is a key part of our world-leading approach."

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