The Climate Change Act of 2008 was amended in 2019 to showcase the UK governmentโs plan to reach net-zero by 2050. This amendment led to the production of the Procurement Policy Note (PPN) 06/21 which detailed the requirements of all businesses with large contracts with in-scope businesses to produce a carbon footprint, pathway to net zero, and a statement of intent.
In-Scope Organisations
In 2019, the UK Government made their intentions of reaching net-zero clear by declaring a 2050 target. To achieve this, legislation was necessary. Alongside Streamlined Energy and Carbon Reporting (SECR), and the Energy Savings Opportunity Scheme (ESOS), it was important that the those with large supplier contracts with Government entities calculated an extended footprint, and put in place a Carbon Reduction Plan (CRP). Specifically, the legislation mandates that for all contracts averaging over ยฃ5 million per annum, between the in-scope organisation (central government departments, their executive agencies and non-departmental public bodies) and a supplier, for the procurement of goods, services and/or works that the supplier and the organisation must carry out a Carbon Reduction Plan (CRP).
Reporting and Planning Requirements
When calculating carbon emissions, it is typical for businesses to focus their Scope 1 and 2 as these are their most direct emissions, and easiest to calculate. The CRP extends on the work which is done in SECR and mandates the inclusion of five Scope 3 categories. The required Scope 3 categories are a particular subset of the most accessible emissions to be calculated. This means that a carbon reduction plan is an ideal way to start calculating a full carbon footprint, for those it is mandated for, but also for those which it is not. The below details the specific categories for which emissions must be accounted for:
ALL of Scope 1:
- Stationary Combustion Emissions
- Mobile Combustion Emissions
- Waste Generated in Operations (Controlled by the reporting company)
- Fugitive Emissions
- Process Emissions
ALL of Scope 2:
- Purchased Electricity
- Purchased Heat
- Purchased Cooling
- Purchased Steam
SOME of Scope 3:
- Upstream
- Upstream Transport and Distribution
- Waste Generated in Operations (not controlled by the reporting company)
- Business Travel
- Employee Commuting
- Downstream
- Downstream Transport and Distribution
As the CRP is an annual report, it must showcase the progress being made year-on-year, with a baseline set of emissions for comparison. A unique aspect to the compliance is that the CRP must be easily accessible on the companyโs website for all relevant stakeholders. This is to provide transparency both internally and externally such that potential stakeholders can be provided with adequate information to make an informed decision on their suppliers.
Common Difficulties
Businesses looking to meet the requirements of PPN 06/21 typically struggle with understanding the scope, quantification process and required commitments to be detailed in the CRP. As the CRP must be made public on the businessโ website, it can be a way to promote the carbon reduction initiatives and relevant targets which have been undertaken. After a baseline has been established, this can promote energy and carbon improvements, which typically lead to cost savings, across a business, saving energy and money in the long run. NUS have experience in the front to back of the quantification, decarbonisation, and implementation process. NUS can support your business quantify their emissions, produce a CRP and then act upon it.
How NUS Can Help
NUS has a team of Energy and Sustainability Service (ESS) consultants highly proficient in energy and carbon compliance who can help your business report your CRP. Furthermore, NUS also carries out compliance projects with the Energy Efficiency Directive Article 8 (EED A8), Energy Savings Opportunity Scheme (ESOS), Climate Change Agreement (CCA), Streamlined Energy and Carbon Reporting (SECR) and much more.
If you wish to speak further about your businessโs Carbon Reduction Plan or any other additional compliance/sustainability matter, please contact NUS.