Posted: 02 Feb 2023 by Jamie Lee

Procurement Policy Note 06/21: Accelerating reaching Net Zero in public procurement

PPN 06/21 and Net Zero 2050

In 2019, the UK Government committed to a target to reach Net Zero by 2050. This means a requirement to reduce at least 100% of net UK greenhouse gas emissions, compared to 1990 levels. To support this, on 5th June 2021 the UK Government published Procurement Policy Note 06/21 (PPN 06/21), which came into effect for new procurements launched from 30th September 2021.

The policy introduces a new selection criteria requiring suppliers to publish a ‘Carbon Reduction Plan’ (CRP). This plan must confirm the supplier’s commitment to achieving Net Zero by 2050, and detail the carbon footprint of the bidding supplier’s UK or global operations. Suppliers who fail to make this commitment or publish their plan risk being excluded from the procurement process.

Who does PPN 06/21 apply to?

The PPN affects all domestic and overseas suppliers bidding on UK public contracts worth £5 million or more (ex VAT).

The PPN applies to contracts controlled by: 

  • Central Government Departments and their Executive Agencies
  • Non-Departmental Public Bodies, such as HMRC, CPS, and DVLA (These are referred to as ‘In-Scope Organisations’)

Environmental considerations and carbon reduction are a factor in most, if not all, contracts and therefore in the majority of cases, the application of this PPN is relevant. This may include, but is not limited to:

  • Contracts which have a direct impact on the environment in the delivery of the contract
  • Contracts which require the use of buildings by staff engaged in the delivery of the contract
  • Contracts which require the transportation of goods or people used in the delivery of the contract
  • Contracts which require the use of natural resources in the delivery of the contract

How to comply with the PPN 06/21?

To meet the requirements of the new PPN, if companies intend to bid for contracts from the UK Government and are ‘in scope’, they must ensure they prepare a detailed carbon reduction plan (CRP) confirming the supplier’s commitment to achieving Net Zero by 2050. The plan must meet the technical standard published alongside the PPN.

PPN 06/21 A carbon reduction plan must include

What should a Carbon Reduction Plan contain?

  • Supplier’s commitment to achieving Net Zero by 2050
  • Details of the supplier’s baseline emissions that their carbon reductions methods will be measured against
  • An overview of the supplier’s current Greenhouse Gas emissions
  • The supplier’s emissions reduction targets and progress to date
  • The carbon reduction measures that can be applied in the delivery of the contract
  • Assurance that CRP has been signed off at an appropriate level within 12 months of the date of the procurement

The plan should be approved by the bidding organisation’s senior leadership within the 12 months preceding the commencement of the procurement and published on the supplier’s website so that it is available for public review.

In line with PPN 06/21

What emissions should be reported in the Carbon Reduction Plan?

The CRP is based on the Greenhouse Gas Protocol (GGP), which breaks emissions (carbon dioxide and other greenhouse gases) into three ‘Scopes’:

  • Scope 1 emissions – direct greenhouse gas emissions that come from sources that are controlled or owned by the reporting organisation. e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles
  • Scope 2 emissions – indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat, or cooling. They are accounted for by the reporting organisation as they are a result of the organisation’s energy use
  • Scope 3 emissions – all sources not within an organisation’s scope 1 and 2 boundary. Scope 3 emissions often represent the majority of an organisation’s total greenhouse gas emissions

In line with PPN 06/21, the supplier’s CRP must disclose current emissions for Scopes 1 and 2 of the GGP, as well as a plan for identifying and mitigating a defined subset of Scope 3 emissions.

Full details of the reporting requirements are in the Technical standard for Completion of Carbon Reduction Plans here. 

How can STAR Index help?

STAR Index is an innovative platform to manage the wider horizons of ESG challenges in complex supply chains and it can support you to comply with the PPN 06/21 standard by:

  • Identifying the sources of emissions within & outside of your business
  • Collecting data on emissions under your control across Scope 1 and 2
  • Gathering your scope 3 data by mapping chains & data on STAR Index
  • Considering offset opportunities and ‘quick wins’ in the short term
  • Supporting you with the development of a credible carbon reduction strategy or adapting your existing strategy to deliver net-zero carbon working with our partners
  • Benchmarking your emissions and reporting year on year progress to customers and also third party standards such as SBTi and CDP

Our team are on hand to help you with any questions regarding how the STAR Index platform works and how your business can benefit from it, just click the button below.

Talk to us today!

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