Bidding for Public Sector Contracts – New Carbon Reduction Plans Explained

Three years ago, the UK became the first major economy to adopt a legal commitment to achieve Net Zero by 2050. This is an environmental target of completely negating the amount of greenhouse gases produced by human activity by reducing emissions. New Carbon Reduction Plans can be an effective way of achieving this – so it’s important to understand what they are, and why they are significant in the world of business sustainability.

Given that businesses are responsible for generating a large percentage of carbon emissions, they are increasingly being held to higher standards and expected to demonstrate what they are doing to play their part in the fight against climate change. One effective way of doing this is by identifying and implementing a Carbon Reduction Plan.

In this blog, we explore what a Carbon Reduction Plan entails, and why they’re useful tools for any business looking to increase their transparency, secure important contracts and cut their emissions.

What Are Carbon Reduction Plans?

Carbon Reduction Plans are an initiative that have been put in place to help both suppliers and customers understand the impact that a contract – and subsequently their wider operations – have on the environment.

It essentially details their organisational carbon footprint (including scope 1, 2 and 3 emissions) and confirms their commitment to achieving Net Zero by the specified deadline.

Completed by the bidding supplier, Carbon Reduction Plans are required to meet specific reporting requirements outlined in supporting guidance and must include the supplier’s current carbon footprint to track and monitor progress.

Where Did Carbon Reduction Plans Come From?

The UK government has set out that 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 plan that details their commitment to achieving Net Zero emissions.

Carbon Reduction Plans must include certain details which include a declaration of the organisation’s commitment to delivering on Net Zero goals (including a target year), a baseline emissions footprint, a current emissions report and an emissions reduction target. The plan must also be published on the bidder’s website and signed off by a director. 

For more information and a comprehensive list of requirements, please click here.

Why Are Carbon Reduction Plans Important?

Whilst the £5m threshold limits the requirement to major contracts, it seems likely that similar measures will be adopted by organisations bidding for smaller contracts in the future.

This is important to consider if your business is looking to bid for and win big government contracts. In addition to being a formal requirement, they are also a clear indicator that your organisation is taking environmental issues seriously and demonstrates an active desire to change. This is highly beneficial from a reputational perspective, as it highlights your organisation’s green credentials and presents you as a conscientious business.

In a time where both companies and consumers are increasingly looking to support organisations committed to reducing their environmental impact – initiatives like carbon reduction plans can be very powerful tools.

Scope Emissions: 1, 2 and 3

Creating a clear and credible Carbon Reduction Plan relies on being able to accurately report on scope emissions.

They are an important part of these plans and provide the crucial information needed to provide an overview of a company’s overall emissions – including their supply chain.

Whilst scope 1 and 2 emissions are relatively straightforward to report on, scope 3 are notoriously difficult as they fall outside a company’s direct ownership or management. This is because they are the emissions resulting from activities not owned or controlled by the reporting organisation, but that nevertheless impact its value chain.

However – whilst they can be complicated emissions to report on, it’s not impossible. One way of overcoming this challenge is by utilising dedicated and specialist software that has been specially designed to calculate and monitor key emissions.

Report with Axiom

This is where we come in.

AXIOM provides your business with complete visibility, access and control over the data you require for quick and easy reporting. This is done using our carbon reporting software which seamlessly collates emissions data across the year, automatically calculates GHG emissions and accurately reports on scope 1, 2 and 3 emissions.

We help make the reporting process simple to ensure that you stay compliant and maximise your chances of securing the contracts that matter, so that your business can grow to its full potential.

Supporting organisations in their sustainability journey is at the heart of everything we do – and we are passionate about providing you with the right tools to make this easier.

To find out how we can help your business, or to book your free demo – please contact us today.