Firms must commit to net zero to win government contracts

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.

The Cabinet Office has said that the rules will support the government’s plan to build back greener by ensuring that potential government suppliers publish plans to reduce carbon emissions across their operations in order to bid for major government contracts.

It is believed that the UK government is the first in the world to put this requirement in place, underlining the UK’s global leadership in tackling climate change.

Under the measures, prospective suppliers bidding for contracts above £5 million a year will need to have committed, by September, to the government’s target of net zero by 2050 and have published a carbon reduction plan. Firms which fail to do so will be excluded from bidding for the contract.

A carbon reduction plan sets out where an organisation’s emissions come from and the environmental management measures that they have in place.

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

Lord Agnew, Minister for Efficiency and Transformation, said: “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.”