Sector - Local Government

Green rules for government contracts

Green rules have come into force for companies bidding for major government. All companies bidding for government contracts worth more than £5M a year must commit to achieving Net Zero emissions by 2050.

The green rules are intended to help deliver the manifesto promises and reach net zero carbon emissions by 2050. Every company bidding for these contracts will need to adhere to the rules, whether successful or not.

Chancellor of the Duchy of Lancaster Steve Barclay said: “These new rules show our bold and ambitious agenda to achieve Net Zero by 2050, protecting ourselves and future generations.

“Government spends £290Bn a year on procurement and it’s right that we use this spending power to green the economy.

“Working arm-in-arm with business, we are taking giant strides to ensure this country is building back greener and tackling climate change.”

The new requirements come into effect ahead of international climate conference COP26 which the UK will host later this year, with officials at the event working closely with climate experts and campaigners to encourage other countries to follow the UK’s example.

The UK is the first country in the world to put such a measure in place, underlining the government’s leadership in the fight to tackle climate change.

Andrew Griffith, UK Net Zero Business COP Champion, said: “The message to businesses is clear – engaging on net zero is no longer an option but a necessity from today, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts.”

The new rules will drive forward the government’s green agenda while also striking a balance to not overly burden and potentially exclude small and medium sized enterprises (SMEs) from bidding for government work.

CBI’s Director of Decarbonisation, Tom Thackray, said: “The scale and breadth of spend makes public sector procurement an essential tool in driving net zero progress across all sectors and regions of the country. This new policy will provide a sharp focal point for public-private partnerships.

“Responding to their customers and investors, businesses are eager to accelerate progress towards net zero as part of a broader sustainability agenda. Working with the public sector they can demonstrate their excellence and underline the world-leading progress many industries have already made.”

The measures will apply to all central government departments as well as their Executive Agencies and Non-Departmental Public Bodies.

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