Firms must commit to net zero to win major government contracts

Exciting news for a sustainable future as new measures will require businesses to commit to net zero by 2050 and publish clear and credible carbon reduction plans before they can bid for major government contracts.

Supporting the “Build Back Greener” mantra, this new rule which will come into play in September aids the steps already taken in several areas of public policy, to ensure longevity for the sustainability agenda.

The UK are leading the way here, being the first government in the world to put this requirement in place. At £292 billion, public procurement accounts for around a third of all public annual expenditure. This new ruling means that the impetus to tackle climate change falls squarely at the feet of both the public and private sector. Private sector firms have a real chance to make a substantial positive long term impact to the social and environmental well being of our community – or be left behind… because firms which fail to implement this will be excluded from bidding for key contracts.

The ruling applies for suppliers bidding for contracts above £5million a year and all of those bidding will need to comply with the measure, not just those who are successful in winning contracts. This further widens the impact of the measure, as more and more suppliers commit to achieving Net Zero.

What does the Minister for Efficiency and Transformation, Lord Agnew, say?

“The government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to net-zero.”

“Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world leading approach.”

“These measures will help green our economy, while not overly burdening businesses, particularly SMEs.”

The measures will apply to all central government departments and arms length bodies.

Are you affected by this new ruling?

Do you have a carbon reduction plan already in place or will you need to get up to speed before September to avoid being overlooked in contract bidding?

Thrive’s Metrics and Social Value tracking system lets you track your carbon creation and reduction, both internally and down through your supply chain, making it perfectly suited to help you tackle these new government demands. We are passionate about net zero and how our software can help businesses get there.

Learn more about carbon tracking with the Thrive Social Value Module.