Why Have a Carbon Reduction Plan?
The government is now requiring certain businesses to have a Carbon Reduction Plan, but why?
In response to the increasing threat of climate change, the UK government has established a legally binding target of Net Zero carbon emissions by 2050.
Furthermore, to achieve this goal, the government has introduced new criteria for the selection of suppliers for government contracts.
As part of this, all suppliers bidding for any central government contract valued above £5 million per annum are required to complete a Carbon Reduction Plan (CRP).
What is a Carbon Reduction Plan?
A Carbon Reduction Plan outlines a supplier’s commitment to reducing its carbon footprint and achieving the government’s Net Zero target.
It includes details of the supplier’s current carbon emissions, measures to reduce emissions, and progress towards meeting emissions reduction targets.
The CRP must be approved by a company director or senior leadership within the organisation.
As well as this it must be submitted to the relevant contracting authority within 12 months of the procurement exercise.
Additionally, the supplier’s CRP must be published on their website and updated regularly.
What does a Carbon Reduction Plan Include?
Your Carbon Reduction Plan should include the following five components:
- A commitment to Net Zero by 2050: All suppliers must pledge their commitment to reducing greenhouse gas emissions by 100% when compared to levels from 1990.
- Base year vs current emissions: The supplier’s current emissions are divided into three separate scopes, then measured against a previous baseline year using CO2e (carbon dioxide equivalent).
- Published and updated regularly: The supplier’s CRP must be published and updated regularly on their website.
- Scope 1 and 2 emissions: The supplier must provide current UK emissions for Scope 1 and 2 of the GHG Protocol, along with a defined subset of Scope 3 emissions, including business travel, employee commuting, waste generated in operations, upstream transportation and distribution, and downstream transportation and distribution.
- Environmental management measures: The supplier must detail the environmental management measures that can be applied in the delivery of the contract.
How to Collect Data for a Carbon Reduction Plan?
While the UK government has provided a template for the CRP, the process of collecting data and completing the calculations required can be challenging for some companies.
With that in mind, starting the process early is recommended to ensure eligibility for procurement contracts requiring a CRP.
Companies that have already started to disclose their emissions and set targets for reduction may find that their current reporting methodology aligns with the requirements of PPN 06/21.
However, it is crucial to ensure the accuracy of data provided through GHG conversion factors and seek guidance from carbon accounting professionals.
What to Do with the Data for a Carbon Reduction Plan?
Once CO2e emissions are calculated, companies are required to commit to emissions reduction targets over the next five years.
Because of this, the actual progress is plotted on a graph against target progress to demonstrate the company is meeting its aims.
Companies are also required to describe carbon reduction projects that they have completed or implemented since their baseline measuring year.
Conclusion about Carbon Reduction Plans
In summary, having a CRP is essential for companies looking to secure central government contracts.
As well as this, it demonstrates their commitment to reducing carbon emissions.
The CRP outlines a company’s environmental management measures, emissions reduction targets, and progress towards achieving Net Zero by 2050.
With that in mind, starting the process early and seeking guidance from carbon accounting professionals can help companies ensure the accuracy of their data.
If you do this, your company will meet the requirements of the government’s new procurement plan (PPN 06/21).
Need help with your Carbon Reduction Plan?
Please get in touch with Play It Green as our network of experts are there to help you.
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