Sustainable bid rules

1 October 2021

New greener rules for companies bidding for major government contracts came into force on 30 September, which could have implications for hirers and others in the supply chain. 

The initiative comes ahead of the COP26 climate change summit taking place in Glasgow in November. 

As reported earlier on the blog, all companies bidding for government contracts worth more than £5m a year must commit to achieving Net Zero emissions by 2050. 

Andrew Griffith, the government’s UK Net Zero Business COP Champion, said: “The message to businesses is clear – engaging on net zero is no longer an option but a necessity from today, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts.”

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 go further, requiring 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. 

A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place. Information is needed from suppliers and others in their supply chain to help calculate their overall carbon footprint. 

All companies bidding for contracts will need to comply with the measure, not just those who are successful. And the rules apply to all central government departments and arms length bodies, which includes organisations like Network Rail, pictured above, and National Highways (the new name for Highways England).