Preparing for Net Zero Goals in Public Procurement
Essential strategies for sustainable purchasing in the UK public sector as contracts align with net zero targets. Learn how suppliers and government agencies are adapting to new requirements and driving change across industries.
The Imperative of Net Zero in Public Procurement
Ambitious National Targets
The UK government has legally committed to reaching net zero emissions by 2050, making public procurement a critical driver for achieving this nationwide transformation.
Mandatory Supplier Requirements
All suppliers bidding for major government contracts (over £5 million) must now demonstrate their commitment to net zero through detailed Carbon Reduction Plans and clear implementation strategies.
Growing Investment Impact
Public sector commitment is evidenced by over £559 million invested in net zero contracts during 2021, signalling strong market opportunities for sustainable suppliers.
Economic Growth Potential
Strategic green public procurement is projected to generate £6 trillion in GDP growth through 2050, creating substantial opportunities for innovative businesses while advancing sustainability goals.
Understanding Public Procurement Notices (PPN 06/21)
PPN 06/21 Overview
Landmark procurement policy mandating carbon reduction requirements for major government contracts, affecting all central government departments, executive agencies, and non-departmental public bodies
Key Requirements
Suppliers must demonstrate a clear commitment to Net Zero by 2050, publish a comprehensive Carbon Reduction Plan detailing their scope 1, 2, and 3 emissions, and outline specific decarbonization strategies
Implementation Date
Policy enforcement began 30 September 2021, requiring all new qualifying procurement contracts to include detailed environmental considerations and carbon reduction commitments
Strategies for Carbon Reduction in Procurement
Implementing Carbon Reduction Plans
Key elements include baseline emissions data, reduction targets, planned initiatives, and implementation timelines. Regular monitoring and reporting are crucial for tracking progress and identifying areas for improvement.
Sustainable Procurement Practices
Set minimum environmental standards, use whole-life costing, prioritize eco-labelled products, and encourage low-carbon innovation. Train staff on sustainable procurement principles and work closely with sustainability experts.
Encouraging Supplier Engagement
Host supplier workshops, offer incentives for meeting sustainability targets, provide resources on emissions reporting, and facilitate knowledge-sharing between suppliers. Build long-term partnerships to drive continuous improvement.
Integrating Social Value into Procurement
Social Value Frameworks
Guide buying choices with goals for local jobs, fair wages, and community support. Some frameworks use point systems to compare bids based on social benefits.
Environmental Factors
Consider carbon impact, recycled materials, eco-friendly delivery, and energy efficiency. Some buyers request carbon footprint reports to compare options.
NHS Example
The NHS has set net zero goals for its procurement, looking at the carbon impact of products and services across its supply chain.
Assessing Carbon Footprints in Supply Chains
1
Scope 3 Value Chain Emissions
Represent up to 80% of total corporate emissions impact
2
Strategic Supplier Engagement
Build partnerships to ensure accurate emissions reporting
3
Science-Based Targets
Establish clear, measurable carbon reduction pathways
4
Digital Assessment Solutions
Deploy standardized tools for consistent measurement
By implementing these comprehensive assessment strategies, organizations can effectively measure and analyze their supply chain emissions, enabling data-driven procurement decisions and accelerating progress toward ambitious net zero commitments. Regular monitoring through these frameworks helps identify high-impact reduction opportunities and validate supplier performance.
Role of Central Government in Driving Change
Set Targets and Policies
Establish clear, measurable carbon reduction targets and develop comprehensive policies to ensure accountability across public sector organizations
Create Action Plans
Design detailed roadmaps with specific milestones, timelines, and responsibilities for reducing emissions throughout operations and procurement
Provide Funding
Allocate dedicated resources and create incentive programs to accelerate adoption of sustainable practices and clean technologies
Establish Standards
Implement rigorous procurement criteria and compliance frameworks that prioritize suppliers committed to carbon reduction and sustainability
Effective Contract Management
Clean Technologies
Adopt electric vehicles, energy-efficient systems, and low-carbon building materials
Research Investment
£4.2 billion planned for net zero research and innovation from 2022-2025
Innovation Focus
Develop renewable energy, energy storage, sustainable transport, and carbon capture technologies
Energy Efficiency and Renewable Energy Applications
Renewable Energy Transition
Shift to solar, wind, and biomass power sources
Electric Vehicle Integration
Replace petrol and diesel fleets with EVs
Energy Efficiency Upgrades
Implement LED lighting, smart building systems, and insulation improvements
Heat Pump Adoption
Replace gas boilers with efficient heat pump systems
Decarbonising Transport and Industrial Sectors
Electric Vehicle Integration
- 2030 ban on new petrol and diesel car sales
- Expanding charging infrastructure
- Transitioning delivery and bus fleets to electric
Industrial Emission Reduction
- Carbon capture and storage technology
- Low-carbon hydrogen production
- Electrification of industrial processes
- Aim for first net zero industrial cluster by 2040
Frequently Asked Questions
Public organisations face several key questions when aligning procurement with net zero goals. These include developing carbon reduction plans, implementing supplier roadmaps, and adopting frameworks for net zero strategies.
Public bodies can take several steps to align procurement with net zero goals.
They can require Carbon Reduction Plans from suppliers bidding for major contracts. This ensures suppliers commit to achieving net zero by 2050.
Organisations can also set sustainability criteria in tenders. This might include energy efficiency standards or low-carbon material requirements.
A Carbon Reduction Plan for public procurement should include several key elements.
It must outline the supplier's current emissions across Scopes 1, 2 and 3. The plan should also detail specific carbon reduction targets and timelines.
Suppliers need to describe their planned emissions reduction measures. These could involve renewable energy adoption or more efficient transport methods.
The NHS can implement a supplier roadmap through several strategies.
It can set clear emissions reduction targets for different supplier categories. The NHS may also require suppliers to report their carbon footprint regularly.
Providing support and guidance to suppliers on emissions reduction can be helpful. The NHS might offer training or resources on sustainable practices.
Organisations can adopt various frameworks for net zero procurement.
The Science Based Targets initiative provides guidelines for setting emissions reduction goals. The Greenhouse Gas Protocol offers standards for measuring and reporting emissions.
Some organisations use the Task Force on Climate-related Financial Disclosures framework. This helps assess climate-related risks and opportunities in procurement.
Core principles for public sector net zero goals include transparency and accountability.
Entities should openly report their emissions and progress towards targets.
Collaboration is another key principle. Public bodies can work with suppliers and other stakeholders to achieve shared sustainability goals.
Best practices for monitoring net zero progress include regular data collection. Organisations should track emissions across their supply chain consistently.
Using standardised reporting frameworks helps ensure comparability. The UK government recommends specific Carbon Reduction Plan templates for major contracts.
Setting clear key performance indicators (KPIs) is crucial. These might include percentage reductions in emissions or increases in renewable energy use.