3 March, 2023
When you think of how best to reduce carbon emissions, procurement may not feature highly on your list. But it may be one of the most important levers for change we have. And it’s something increasingly on businesses’ radars.
This is partly because of the UK Government’s not-so-snappily named ‘PPN 06/21’. This is the requirement that businesses bidding for government contracts over £5M have a published ‘Carbon Reduction Plan’, which includes annual emissions reporting, a commitment to align with the UK’s net zero target for 2050, and details of how they will reduce emissions.
A lot of governments’ influence on emissions comes through setting regulations, but they spend large amounts of money on products and services supplied by businesses, all governed by strict and non-negotiable terms and conditions. Integrating emissions reductions into these conditions will force those companies that bid for government work to take responsibility for their climate impacts.
Procurement between businesses is another area where this control can be leveraged. The Science Based Targets initiative (SBTi) recognises this huge power, by allowing companies to set targets based on their suppliers committing to emissions reductions.
For many businesses, taking action on climate still remains voluntary. So the influence that large companies can have by asking suppliers to provide evidence they have set science-based targets is an important lever for change, and if the threshold for PPN 06/21 is lowered from its current level – as may well happen – even more companies selling goods and services to the public sector will be brought into its scope too.
As the expectations and requirements of clients, customers, investors and employees build, the line between voluntary and compulsory is becoming increasingly blurred – to fall behind on expectations is to lose out on opportunities. There’s never been a better time to get ahead and commit to climate action.
By Patrick Bapty