Catalysing sustainability: NHS tightens net zero requirements for suppliers

In April 2024, the parameters for achieving net zero emissions have become more stringent for businesses seeking contracts with NHS England. While specific mandates were previously in effect for larger suppliers, newer regulations now encompass smaller ones. If your company intends to provide goods or services to the NHS, it's crucial to understand the updated requirements.

Current Procedures

As of April 2023, suppliers engaging with NHS England with an anticipated contract value exceeding £5 million have been mandated to disclose a comprehensive Carbon Reduction Plan (CRP). This plan outlines the organisation's dedication to achieving net zero emissions, explains the strategies to mitigate greenhouse gas emissions, and thoroughly calculates the current emissions footprint.

Recent Modifications

Since April 2023, suppliers with NHS contracts valued above £5 million have been obligated to present a Carbon Reduction Plan (CRP), underscoring the organisation's commitment to attaining net zero emissions.

From April 2024 onwards, smaller NHS suppliers—those with contracts ranging between £10,000 and £5 million—must furnish a Net Zero Commitment, which is a more concise declaration of their intent to achieve net zero emissions by 2050 at the latest, endorsed by the company's Board or Director. However, larger suppliers (exceeding £5 million) must submit a comprehensive CRP.

Exceptions to this rule are suppliers listed as Major NHS Framework Owners, including NHS Procurement Hubs and the Crown Commercial Service, who must provide a complete CRP regardless of the contract's scale.

Regulatory Landscape

In 2019, the UK government established a binding mandate to reach net zero emissions by 2050. Consequently, decision-makers awarding major government contracts must consider potential suppliers' environmental impact. The official guidelines, delineated in the Procurement Policy Note (PPN) 06/21, define the parameters that decision-makers must adhere to.

The NHS has set even more ambitious targets to achieve net zero emissions by 2040 for its directly controlled emissions and by 2045 for emissions beyond its control, encompassing its supply chain (referred to as its "Carbon Footprint Plus"). With a supplier base of 80,000 entities, the NHS leverages its significant purchasing influence to catalyse environmental change by imposing net zero requirements.

What are the requirements of a Carbon Reduction Plan?

If your organisation is tendering for contracts in excess of £5 million, ensure you have a CRP in place. There is an abundance of requirements, which are as follows:

• Affirm your organisation's dedication to achieving carbon neutrality by 2050 or earlier.
• Disclose your current emissions across Scope 1 and Scope 2.
• Disclose a minimum portion of your Scope 3 emissions. The guidance outlines five mandatory categories of Scope 3 emissions according to the Greenhouse Gas Protocol, with encouragement to extend beyond these.
• Encompass all seven greenhouse gases in your emissions reporting. Utilise the unit of measurement CO2 equivalent (CO2e) for consistent comparison.
• Outline the initiatives your organisation is undertaking to mitigate its greenhouse gas emissions.
• Obtain endorsement of the carbon reduction plan from the board or company director.
• Publicise the Carbon Reduction Plan (CRP).
• Regularly update the CRP, at least annually.

The government has also published a technical standard for completing a carbon reduction plan for organisations to refer to.

However, for smaller contract tenders, the requirement is less strenuous. All that is required is a Net Zero Commitment. This simple statement outlines your commitment to hit net zero emissions by 2050 (or earlier). NHS England has provided some sample text for organisations to use when drafting their 30-word Net Zero Commitment.

How we can help

Trident Utilities has a team of carbon reduction experts with the knowledge and expertise to support you when developing a credible strategy and implementing cost-effective measures to reduce your emissions. Please follow the link for more information about how we help companies with CRP.