Net Zero in Public Sector Procurement
The UK has committed to reach Net Zero by 2050, and this means reducing emissions across every part of the public sector, including suppliers. Sustainability Consultant Amber Rochette explains what Project Procurement Notice (PPN) 0621 means for public sector suppliers and how they can align to Net Zero goals.
What is a PPN?
A Public Procurement Notice is a formal guidance provided by the UK government to all public sector bodies (including non-governmental departments) looking to procure any goods or services. Covering a broad range of topics from payment terms to modern slavery, they’ve been created in a bid to uphold best procurement practises, as well as ensure that public money is being spent in a fair and ethical manner.
In 2021, the government set out guidance on how to account for Carbon Reduction Plans across major contracts (worth over £5m+), in response to the net zero target that was enacted earlier in 2019. Already in effect from April 2023, the PPN/0621 notice stipulates that suppliers should:
- Have a carbon reduction plan in place and publicly available, with specific 2050 reduction targets
- Calculate and report on scope 1,2 and a certain defined sub-set of scope 3 emissions
See below for a reminder on emission scopes
Who does it apply to?
Although not legally binding in force, the PPNs provide guidance set out from Government (the primary legislators in the UK) on the best ways to procure goods and services. Most contracts when put to tender will contain specific requirements for all suppliers to meet – regardless of company size, or turnover. With nearly 500 public bodies in the UK, and thousands of businesses falling into their scope 3 emissions categories, ensuring that procurement is on track to meet our net zero targets is a crucial step in meeting those 2050 targets.
A full list of UK public bodies, ministerial departments, non-ministerial departments and government agencies can be found here if you want to double check whether any organisations you work with are public bodies, or not. If you do, it’s likely that at some point you will be required to think about measuring carbon emissions and having in place a carbon reduction plan to support with the wider net zero target.
What does this mean in practice?
Whilst the PPN notices remain as guidance only, it’s expected that public bodies will at the very least set this standard when procuring goods or services. They can, and often will go above and beyond what is expected and set higher requirements that align more specifically with their own net zero roadmaps. For example, the NHS has extended beyond the PPN 0621 guidance to cover all procurement contracts over £10k. The NHS has committed to reach net zero by 2045 for the emissions that they influence (scope 3), which means all suppliers will need to align with their net-zero ambition.
What does this mean in practice? Well, procurement teams will need to work closely with regulators and relevant industry bodies to shape their approach and provide the required support to suppliers in meeting these targets. Every team will take different approaches to screening suppliers. For example, we know that the NHS uses a supplier self-assessment reporting tool as the single route for sharing information and data with the NHS. This provides a maturity score against key priorities for each supplier. With a clear score, the NHS can understand their supply chain in more detail. It can also help suppliers drive continuous improvements, and develop business cases for sustainable goal setting internally.
What next?
Procurement practices can be a powerful driver for increased carbon reduction planning, and alignment of net zero targets. We are seeing more and more supplier self-assessments, and the use of third-party ESG scorecard platforms such as EcoVadis taking an effect on decision making within procurement teams. Could this be a positive step forward? With increased demands on supplying emissions information and reduction targets, ensuring supplier transparency is key in the net zero transition.
Whether you are a small business supplier looking to build a sustainability strategy with credible targets to improve your bid response, or a large organisation with hundreds of sustainability-related suppliers’ questions…get in touch, we can help you from building sustainability strategies, to identifying KPIs and setting targets, to creating a bespoke sustainability FAQ for your suppliers.
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