Creating your carbon reduction plan: Five top tips for SMEs

November 19, 2024

Sustainable resources background. — © iiievgeniy | iStock

Kristen Green, Head of Sustainability at Crown Commercial Service (CCS), explains the importance of carbon reduction plans for public sector suppliers and how SMEs can simplify the process of creating and maintaining one

In June 2021, the Cabinet Office published a new Procurement Policy Note (PPN). This PPN applies to all companies and organisations applying for central government contracts of £5 million per year or more and creates a requirement to UK’s commitment to reaching carbon net zero.

This PPN, known as PPN 06/21 aims to harness the billions of pounds spent every year on UK public procurement. It aims to encourage decarbonisation and a sustainable approach to contract delivery.

At CCS, we know that public sector procurement can be complex, and compliance with regulations is critical. Since September 2021, all new agreements that have been tendered for and that have fallen within the scope of PPN 06/21 must adhere to its requirements. This is helping our suppliers accelerate their transition to net zero while also remaining compliant with their obligations.

What is a Carbon Reduction Plan, and why do you need one?

PPN 06/21 introduced a requirement for all suppliers who bid for higher-value public sector contracts – valued at £5 million per year and above. A supplier bidding for such a contract must create and submit a company-wide Carbon Reduction Plan (CRP).

CRPs are an essential part of helping the UK accelerate its move to net zero. They are intended to help prospective customers and suppliers work together towards this target.

Put simply, it is a statement of a bidding supplier’s commitment to reaching net zero. It should provide an outline of the environmental measures the organisation already has in place or will implement that will be used to deliver the contract for which it is bidding.

Suppliers bidding for a call-off contract through a CCS commercial agreement must submit a CRP at the procurement selection stage. After this, suppliers are responsible for updating and maintaining their CRP every year.

All CRPs CCS suppliers produce are available for prospective buyers to view through CCS’s dedicated supplier webpages. Therefore, CCS and suppliers must work together to ensure these CRPs are accurate, up-to-date and reliable.

Suppliers should review their CRP and update their current emissions at least annually, ensuring that the most recent emissions data and emissions reduction projects and any structural changes are included. CCS continually monitors all suppliers’ compliance with CRP requirements. Those suppliers who create a CRP but do not supply this data within those 12 months will face the risk of missing out on call-off contracts from their customers, and will be unable to use this CRP to bid for any new tender.

CRPs from suppliers bidding for the same contract are not ‘scored’ or compared to each other as part of the procurement process. They are instead judged by a set of criteria which simply confirms whether or not a supplier’s submission meets the required standard.

Five top tips for SMEs when creating a CRP

CCS understands the importance of having a diverse range of suppliers working with the public sector. We are committed to taking positive action to ensure that Small and medium-sized enterprises (SMEs) are well represented in our commercial agreements.

Here are our five top tips for SMEs to help create a CRP and meet the requirements set out in PPN 06/21.

1. Consider whether you need a CRP

The first step is to check whether a CRP is actually a requirement of any potential contract. The threshold for public contracts affected by the CRP policy requirement has been set at £5 million per year.

This means that many contracts currently fulfilled or bid for by SMEs are exempt from PPN 06/21. This helps to keep these suppliers integrated within the supply chain. This was a deliberate choice to ensure that SMEs were not facing unnecessary barriers to participation in public sector contract bids.

However, putting a CRP in place, even when not strictly required, could prove a benefit for you. Using less energy and cheaper renewable sources will ultimately save businesses money. Having a CRP ready can help you move onto new, larger-scale opportunities in the long term, broadening your earning potential.

2. Get help calculating your current carbon footprint

In order to understand the actions required as part of your CRP, you will first need to understand your current carbon footprint and what your journey towards net zero looks like.

A number of private sector organisations offer support and tools for businesses wanting to calculate their carbon footprint, although there are also plenty of free resources available to assist in this process. Some of these private sector services are free for SME and Voluntary Community and Social Enterprise (VCSE) suppliers, easing the burden of time-intensive work on smaller suppliers.

A list of providers for carbon footprint calculation is available through Cabinet Office’s frequently asked questions document about PPN 06/21.

3. Understand what you need to include and what you can omit

Creating a CRP does not mean every piece of information relating to carbon net zero or environmental impact must be included. The requirements clearly state the expected information as part of these plans. The requirements determine what a CRP must do, including (but not limited to) the following:

Be regularly updated and published on the supplier’s website.
Verify the supplier’s commitment to achieving net zero.
Provide current UK emissions for Scope 1 and 2 of the greenhouse gas (GHG) Protocol, in addition to a subset of Scope 3 emissions.
Provide emissions reporting for the six greenhouse gases covered by the Kyoto Protocol.
Detail the environmental management measures that
can be applied in the delivery of the contract.

Further information on the full requirements for a supplier CRP can be found through the full documentation for PPN 06/21.

4. Use the resources available

A broad range of resources are available to assist you in creating a CRP.

Suppliers are encouraged to make use of the CRP template that is included in Annex A of the official publication of PPN 06/21. This gives a clear framework to help lay out your plans and save you time and resources.

The Cabinet Office has also created numerous resources to assist suppliers in meeting CRP standards:

Specific guidance for adopting and applying the requirements and the criteria that will be used to judge compliance in the procurement process.
Further information on the standard of carbon emissions data required as part of the plan.
Answers to some of the most common questions posed about CRP requirements.

A more extensive frequently asked questions (FAQ) page is also available on GOV.UK. This page covers a wide range of questions and information for suppliers about the process of creating a plan.

5. Sign up for dedicated CRP training

The CCS Sustainability team is here to help suppliers, regardless of size, to develop a realistic and compliant CRP, offering training and guidance on both measuring emissions and implementing solutions.

Since the Carbon Reduction Plan policy was implemented in 2021, around 4,500 suppliers have already attended our Carbon Reduction Plan training seminars online.

The primary objective of these training sessions is to help break down the process of creating a CRP. The sessions look at the critical components required, using a pragmatic approach that keeps suppliers informed.

They cover: