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Greener rules for government contracts

Companies bidding for major government contracts must now abide by “greener” rules.

Greener rules for government contracts
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  • Keeli Cambourne
  • October 01, 2021
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The UK Parliament on Thursday announced that as of Friday, all companies bidding for government contracts worth more than £5 million a year must commit to achieving net-zero emissions by 2050.

The UK is the first country in the world to put such a measure in place and it is hoped the new requirements will encourage other countries to follow suit.

The implementation of these rules will help deliver the manifesto promises made by this government to reach net-zero carbon emissions by 2050.

Chancellor of the Duchy of Lancaster Steve Barclay said the new rules show “our bold and ambitious agenda to achieve Net Zero by 2050, protecting ourselves and future generations”.

The UK government currently spends £290 billion a year on procurement and Mr Barclay said it was “right that we use this spending power to green the economy”.

The new requirements come into effect ahead of international climate conference COP26 that the UK will host later this year, with officials at the event working closely with climate experts and campaigners to encourage other countries to follow the UK’s example.

Andrew Griffith, UK Net Zero Business COP Champion, said engaging on net zero is no longer an option but a necessity from today.

“Businesses large and small now need firm climate plans and commitments in place to supply major government contracts,” he said.

“A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place.

“Some large companies already self-report parts of their carbon emissions, known as Scope 1 (direct) and Scope 2 (indirect owned) emissions as part of the Streamlined Energy and Carbon Reporting regulations published in 2018.”

The new rules require a commitment to achieving net zero by 2050 at the latest, and the reporting of some Scope 3 emissions; including business travel, employee commuting, transportation, distribution and waste for the first time.

Scope 3 emissions represent a significant proportion of an organisation’s carbon footprint.

The new rules will drive forward the government’s green agenda while also striking a balance to not overly burden and potentially exclude small and medium-sized enterprises (SMEs) from bidding for government work.

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