Carbon

Procurement Policy Note 06/21

The Paris Agreement sets out a legally binding international treaty on climate change that aims to limit global warming to below 2°C – and preferably below 1.5°C - compared to pre-industrial levels. Many countries around the world, including the UK, have committed to reducing their Greenhouse Gas (GHG) emissions to reach the goals of the Paris Agreement. In 2019, the UK Government amended the Climate Change Act 2008 by introducing a target of at least 100% reduction in the net UK carbon account by 2050. This means that the UK has adopted a legal commitment to achieve ‘Net Zero’ carbon emissions by 2050. To support this, the UK Government published and implemented the Procurement Policy Note 06/21 (PPN 06/21). PPN 06/21 is a mandatory compliance scheme for all companies and organisations bidding on UK public contracts worth £5 million or more.

PPN 06/21 and Net Zero 2050

Since the 30th of September 2021, it is mandatory that domestic and overseas suppliers bidding on UK public contracts worth £5 million or more provide a Carbon Reduction Plan (CRP), detailing their commitment to achieving Net Zero before 2050 and how they will reach this target.

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How to Comply with PPN 06/21?

The purpose of PPN 06/21 is to support the UK government in their commitment to achieving Net Zero by 2050. PPN 06/21 was implemented as a strategy to reduce carbon emissions in the private and public sectors as well as to drive behaviour change for suppliers.

Your business will directly benefit from measuring and reporting its GHG emissions. These benefits include lower energy and resource costs and an increased understanding of the current environmental impacts associated with your operations. Compliance with PPN 06/21 also serves as a statement of leadership by your business which will strengthen your green credentials in an increasingly environmentally conscious marketplace.

Developing a CRP provides suppliers and customers with insight into the impact that their contracts and wider operations have on the environment. It also enables companies to better understand the existing carbon mitigation and energy efficiency opportunities available to them, enabling a more conscious approach to future operations.

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How to Comply with PPN 06/21?

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Our PPN 06/21 Process

Scope 1 & 2 Emissions Evaluation

Assimilation of data necessary for the calculation of Scope 1 and Scope 2 emissions associated with the organisation’s UK operations.
Liaise with relevant individuals at the organisation to gain an understanding of key processes, systems, and controls in place over the preparation of data selection.
Identify data discrepancies within the datasets and address them by employing appropriate methodologies prescribed by the GHG protocol guidance.
Perform carbon and other unit conversion factor calculations to obtain accurate Scope 1 & 2 emissions associated with the organisation’s operations.
Perform analytical reviews over intensity metrics and indicate factors to provide a clear picture of environmental performance.

Scope 3 Emissions Evaluation

Assimilation of data required for the calculation of Scope 3 emissions associated with the organisation’s UK operations.
Data collation on appropriate Scope 3 subsets. (Upstream transportation and distribution, Waste generated from operations, Business travel, Employee commuting, Downstream transportation, and distribution).
Identify data discrepancies within the datasets and address them by employing appropriate methodologies prescribed by the GHG protocol guidance.
Data verification and calculation of GHG emissions associated with Scope 3 activities using conversion factors as published by DEFRA.

Carbon Reduction Plan

Develop a baseline of emissions using the Scope 1, Scope 2 and Scope 3 evaluations.
Develop emission reduction targets, considering any reduction commitment previously undertaken.

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Scope 3 Emissions Evaluation

Assimilation of data required for the calculation of Scope 3 emissions associated with the organisation’s UK operations.
Data collation on appropriate Scope 3 subsets. (Upstream transportation and distribution, Waste generated from operations, Business travel, Employee commuting, Downstream transportation, and distribution).
Identify data discrepancies within the datasets and address them by employing appropriate methodologies prescribed by the GHG protocol guidance.
Data verification and calculation of GHG emissions associated with Scope 3 activities using conversion factors as published by DEFRA.

Carbon Reduction Plan

Develop a baseline of emissions using the Scope 1, Scope 2 and Scope 3 evaluations.
Develop emission reduction targets, considering any reduction commitment previously undertaken.

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FAQ's

Who does the policy apply to?

The PPN applies to contracts controlled by:

Central Government Departments and their Executive Agencies
Non-Departmental Public Bodies, such as HMRC, CPS, and DVLA (These are referred to as ‘In-Scope Organisations’)

What does the policy consist of?

A statement of Scope 1, 2 and a subset of Scope 3 emissions
A baseline year
A reporting year
A commitment to achieving net zero carbon emissions by 2050
A Carbon Reduction Plan (CRP)

What should the Carbon Reduction Plan contain?

A supplier’s CRP must contain:

The supplier’s Greenhouse Gas emissions across Scope 1, 2 and a subset of Scope 3
The environmental management measures that can be applied in the delivery of the contract
A statement of the supplier’s commitment to achieving Net Zero by 2050 (at the latest)
Assurance that CRP has been signed off at an appropriate level within 12 months of the date of the procurement

The CRP must be published on the supplier’s website so that it is available for public review.

How should overseas suppliers account for their emissions?

The same requirements apply equally to overseas suppliers who are bidding for in-scope procurements. Both domestic and overseas suppliers are required to produce a CRP, which includes confirmation of their commitment to Net Zero for their UK operations, details of their UK emissions and an indication of the environmental management measures they can apply. If an overseas supplier does not currently carry out operations in the UK, it can still comply with the measure if it does not have UK emissions data.

Why choose McGrady Clarke for your PPN 06/21 compliance?

McGrady Clarke will support you in meeting PPN 06/21 compliance by providing specialist consultancy services to calculate your current carbon footprint, set carbon reduction targets, and develop a carbon reduction strategy.

Our expert analysis will enable you to expand your environmental capabilities with confidence and provide a pathway for future sustainability developments.