The crux of the NHS net zero supplier roadmap is the requirement for suppliers of new contracts, with an anticipated contract value exceeding £5 million per annum, to produce and publish a Carbon Reduction Plan (CRP) from April 2023. This significant stipulation has broad implications for suppliers' operational practices and their approach to sustainability.
A Deeper Dive into the Carbon Reduction Plan (CRP)
The CRP is an essential document that delineates the supplier’s current carbon footprint across Scopes 1 and 2, as per the Greenhouse Gas (GHG) Protocol, and a subset of Scope 3 emissions. These emissions categories include upstream and downstream transportation and distribution, waste generated in operations, business travel, and employee commuting.
The CRP must confirm the supplier’s commitment to achieving net zero emissions by 2050, or earlier, for their UK operations at a minimum. It should include the supplier’s current emissions and layout the environmental management measures in place, such as certification schemes or carbon reduction initiatives. The plan must be board-approved or approved by a company director if no board is in place. Once finalised, it should be clearly signposted and published on the supplier’s website and updated annually.
The CRP should align with the structure and length of the central government’s Procurement Policy Note (PPN) 06/21 CRP Carbon Reduction Plan template, though stylistic differences are acceptable. The CRP may also cover the parent organisation, provided certain criteria are met.
Impact Across the NHS Supplier Spectrum
The implications of the NHS net zero supplier roadmap are far-reaching, affecting a range of potential suppliers, including NHS organisations, public bodies, subcontractors, and Small and Medium-sized Enterprises (SMEs) and Voluntary, Community and Social Enterprises (VCSEs).
For NHS organisations bidding for contracts with other NHS organisations, an existing and published NHS trust or Integrated Care Board (ICB) green plan is acceptable if it meets or exceeds the CRP requirements.
Public bodies bidding for NHS contracts can use their published carbon reduction plan or net zero commitment, given that it meets or surpasses the CRP requirements.
While subcontractors are not required to provide a CRP, they are encouraged to take actions towards reducing their emissions. SMEs and VCSEs, on the other hand, may provide a CRP with the available carbon emissions data and provide an explanation if any data is unavailable due to exceptional circumstances.
Embedding CRPs in the Procurement Process
From April 2023, the procurement process for new contracts will involve an assessment of the CRP at the selection stage. This assessment will function as a pass/fail check, ensuring that the CRP meets the minimum requirements. Suppliers whose CRPs do not meet these expectations will not proceed in the procurement process.
The CRP requirement also applies to new framework agreements and new dynamic purchasing systems where the individual contract value under the agreement or system exceeds £5 million per year.
How can we help?
At McGrady Clarke, we are excited about the future of sustainability within the NHS supply chain. We are committed to guiding organisations through this transition, helping to create robust and effective Carbon Reduction Plans that not only meet the NHS requirements but also contribute to a more sustainable future for all.
The NHS net zero supplier roadmap is a significant step towards achieving sustainability across the NHS’s operations. It provides a clear pathway for suppliers to contribute towards the national net zero goal while also ensuring operational efficiency and sustainability. Navigating these requirements and creating a robust and effective CRP can be challenging. At McGrady Clarke, we are committed to assisting you through this process, leveraging our expertise in energy and sustainability to ensure your successful alignment with these new requirements.
To prepare effectively for future NHS roadmap milestones, we recommend that suppliers consider setting a net zero target of 2045, although a target of 2050 will still meet the minimum requirements of CRPs. Furthermore, it is crucial to ensure that your organisation’s current emissions for UK operations, at a minimum, include the sources as defined in scope 1 and 2 of the GHG Protocol, and a subset of scope 3 emissions. Moreover, suppliers should remember that the CRP should provide emissions reporting in CO2e (carbon dioxide equivalent) for the seven greenhouse gases covered by the Kyoto Protocol. Your CRP should lay out the environmental management measures in effect, demonstrating your commitment to carbon reduction.
While the requirements may seem daunting, the roadmap is ultimately a tool to help suppliers transition towards a more sustainable future. It encourages a proactive approach to carbon reduction, aligning your organisation’s sustainability efforts with the national ambition of net zero by 2050. For SMEs and VCSEs, we understand the unique challenges you might face in gathering emissions data. In such cases, it is acceptable to provide a CRP with the available carbon emissions data and explain why any data might not be available. The NHS England Sustainable Procurement team is also available for further support or guidance. It is important to remember that the NHS’s net zero ambition is not just about compliance; it’s about future-proofing your organisation and contributing to the global fight against climate change. As such, we encourage all suppliers, including subcontractors, to engage actively in efforts to reduce their emissions, even if they are not directly in scope of the CRP requirements.
Contact our experts today to learn how we can support your organisation in meeting and exceeding NHS Net Zero requirements.