Firms must invest in net zero to win government contracts

New measures will need businesses to invest in net zero by 2050 and publish clear and credible carbon reduction plans before they are able to bid for major government contracts.

The Cabinet Office has stated the rules will offer the government’s intend to build back greener by making certain potential government suppliers publish intends to reduce carbon emissions across their operations in order to bid for major government contracts.

It is considered the UK government may be the first on the planet to place this requirement in position, underlining the UK’s global leadership in tackling global warming.

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

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

The measures will affect all central gov departments and arms length bodies.

Lord Agnew, Minister for Efficiency and Transformation, said: “The government spends a lot more than £290 billion on procurement every year, so it’s important we use this purchasing capacity to help transform our economy to net-zero. Requiring companies to report and commit to reducing their carbon emissions before bidding for public jobs are a vital a part of our world leading approach. These measures will help green our economy, while not overly burdening businesses, particularly SMEs.”