PPN 06/21 and Net Zero 2050
In 2019, the UK government pledged to reach net zero by 2050. This means a requirement to reduce the UK’s net greenhouse gas emissions by at least 100% compared to 1990 levels. To support this, on 5 June 2021, the UK Government will Procurement Policy Note 06/21 (PPN 06/21) has taken effect for new procurements commencing on September 30, 2021.
The policy introduces new selection criteria requiring suppliers to publish a “Carbon Reduction Plan” (CRP). The plan should confirm the supplier’s commitment to reach net zero by 2050 and detail the carbon footprint of the tendering supplier’s UK or global operations. Suppliers who fail to make this commitment or do not make their plans public risk being excluded from the procurement process.
Who does PPN 06/21 apply to?
The PPN will affect all domestic and international suppliers who bid on UK public contracts valued at £5m or more (excluding VAT).
The PPN applies to contracts governed by:
- Central government departments and their executive bodies
- Non-sectoral public bodies such as HMRC, CPS and DVLA (these are referred to as ‘covered bodies’)
Since environmental considerations and carbon reduction are elements of most, if not all, contracts, the application of this PPN is almost always relevant. This includes but is not limited to:
- Contracts that have a direct impact on the environment in the performance of the contract
- Contracts requiring the use of premises by personnel engaged in delivery Contract
- Contracts requiring transportation of goods or persons used to deliver goods the contract
- Contracts requiring the use of natural resources in the performance of the contract
How do I comply with PPN 06/21?
Detailed carbon confirming supplier commitments to achieve net zero by 2050 if the company intends to bid for a contract from the UK Government to meet the new PPN requirements and is ‘in range’ A reduction plan (CRP) must be prepared. The plan must meet the technical standards published with the PPN.
The plan must be approved by senior management of the bidding organization within 12 months prior to the commencement of procurement and published on the supplier’s website to be available for public review.
In line with PPN 06/21, supplier CRPs are required to disclose their current GGP Scope 1 and 2 emissions and their plans to identify and mitigate a defined subset of their Scope 3 emissions.
Full details of reporting requirements can be found in the Technical Standards for Completing Carbon Reduction Plans. here.
How can the STAR Index help me?
The STAR Index is an innovative platform for managing a broader view of ESG issues and can support compliance with the PPN 06/21 standard by:
- Identify physical sources of emissions inside and outside your business
- Collect data on volumes under control across scopes 1 and 2
- Map the STAR Index chains and data to calculate the “Scope 3” footprint
- Consider offset opportunities and short-term “quick wins”
- Help develop a credible carbon reduction strategy or work with partners to adapt existing strategies to achieve net-zero carbon
- Report annual emissions to customers, report to third-party standards such as SBTi and CDP, and meet legal obligations such as ESOS
Our team will answer your questions about how the STAR Index platform works and how your business can benefit from it.