On World Environment Day (5 June) the government announced new measures to tackle climate change, stating that firms will have to commit to carbon reduction to be allowed to bid on large government contracts.

The measures, that will come into force by September 2021, require companies wishing to bid for contracts worth over £5m a year to have a “clear and credible” plan to achieve net zero carbon emissions by 2050.

Lord Agnew, Minister for Efficiency and Transformation, said: “The government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to net zero. Requiring companies to report and commit to reducing their carbon emissions before bidding for public work is a key part of our world-leading approach.”

Some large companies already self-report parts of their carbon emissions, but the new rules will require the reporting of emissions relating to business travel, employee commuting, transportation, distribution and waste. It is hoped that these measures will help make the UK’s economy more sustainable, while not placing too big a burden on businesses, or exclude SMEs from bidding for government work.

Tom Thackray, Director of Infrastructure and Energy at the CBI, said: “The CBI has long supported using procurement policy to ensure government spending supports the UK’s environmental objectives and these changes will encourage more firms across the country to demonstrate their own commitment to net zero when bidding for government contracts.”

You can read more about the scheme in the government’s official press release. If you’re unsure how this initiative could affect your business, Think Sandwell is here to help. Get in touch, or check out our Going Greener pages for resources and information on how to conserve energy, reduce emissions and play a part in combatting climate change.