PPN 06 21: A guide to Carbon Reduction Plans

PPN 06/21 is a requirement for businesses bidding on major UK government contracts to publish a Carbon Reduction Plan. It applies to government contracts valued at £5 million or more annually, and to all new NHS frameworks contracts.

The initiative isn’t about being perfect, just showing that you have a plan for carbon reduction. Nonetheless, it can feel overwhelming, especially when you’re rushing to meet bid deadlines. The good news is that complying with PPN 06 21 is generally quite straightforward. There is a standard carbon reduction template published by the UK government. Businesses are heavily encouraged to use this format, even if carbon is being reported in other formats.

Here’s everything a small business needs to know about PPN 06/21 and when it could apply to your operations.

What is PPN 06 21?

PPN 06/21, short for ‘Procurement Policy Note,’ mandates that suppliers bidding for significant government contracts must demonstrate their commitment to reducing greenhouse gas emissions. This aligns with the UK’s goal of achieving net zero emissions by 2050. In Wales, it’s referred to as WPPN 06/21, but the requirements are almost identical.

The goal of PPN 06/21 is to ensure that all companies vying for major government contracts are not only actively measuring their carbon output but also taking steps to reduce their impact. This policy is about nudging businesses to prioritise greener practices.

Do Small Businesses Need to Follow PPN 06 21?

If your business is bidding for a government contract worth £5 million per year or more, then PPN 06/21 applies to you. Even if your business doesn’t reach this threshold, if you are a subcontractor or part of the supply chain for a larger contractor, you may still need to comply.

NHS England goes a step further in requiring a PPN-compliant Carbon Reduction Plan for all new framework contracts, no matter the value. It requires a lesser Net Zero Commitment for all new contracts, which includes selected key requirements from the CRP template.

Preparing a Carbon Reduction Plan (CRP) in advance is a good idea, it can take a bit of time to prepare, and that’s the last thing you’ll want to be doing when a bid deadline is looming. Similarly, even if you don’t bid on public sector contracts, you may supply larger businesses who need to report on your emissions as part of their ‘Scope 3’ value chain emissions.

PPN 06/21 Success: Writing a Winning Carbon Reduction Plan

To comply with PPN 06/21, you must develop a Carbon Reduction Plan that includes:

• Your Current Carbon Footprint: Documenting your Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased electricity) emissions, along with some Scope 3 emissions (indirect emissions from your supply chain).
• Targets for Achieving Net-Zero Emissions: Show clear targets for reducing emissions.
• Measures: Outline of the strategies and measures that you will use to manage and reduce your environmental impact.

Your CRP should align with recognised standards such as the Greenhouse Gas Protocol or ISO 14064. There’s more information on this in our article How to write a Carbon Reduction Plan

Remember, the focus is on your future targets and strategies, not the work you’ve already done. If you’ve achieved carbon impact recently, it’s worth backdating your Carbon Reduction Plan to show this progress. You’ll need to have the ‘before’ data to create this benchmark.

Steps to Comply with PPN 06/21

1. Measure Your Carbon Footprint: Calculate your Scope 1 and Scope 2 emissions, and include significant Scope 3 emissions categories, like upstream and downstream transportation, waste, business travel, and employee commuting.
2. Develop a Carbon Reduction Plan: Create a detailed plan outlining your current emissions, future targets, and reduction strategies. For more detailed guidance, refer to our article covering Carbon Reduction Plan templates and examples.
3. Publish on your website: Place the link in a prominent place on your homepage. It is good practice to keep previous Carbon Reduction Plans on your website so that your progress can be monitored. If you don’t have a website, you must provide a copy of the statement in writing to anyone who requests within 30 days.
4. Monitor and Report: Regularly track your emissions and update your CRP at least each year. Be prepared to adapt how you report your progress as government requirements change.

Full details of how to comply, written in fairly plain English, are published in the Cabinet Office’s technical standard for PPN 06/21.

Benefits for Your Business

A good CRP can be much more than a box-ticking exercise. Having a clear plan for carbon can potentially enhance your business’s reputation and attract new clients and partners. Additionally, many carbon reduction strategies can lead to cost savings through improved energy efficiency and reduced waste.

Implementing a Carbon Reduction Plan can provide your business with several additional advantages:

• Brand Image: Demonstrating a commitment to sustainability can improve your brand’s image and make your business more attractive to customers and partners who value environmental responsibility.
• Compliance: As regulations around carbon emissions become stricter, having a CRP in place ensures your business is ahead of the curve and ready to comply with future legal requirements.
• Access to Green Financing: Many financial institutions offer favourable terms to businesses with strong environmental practices. A CRP can help you qualify for green loans or investment opportunities.
• Employees : Employees increasingly prefer to work for companies that are environmentally responsible. A strong CRP can boost employee morale and help attract top talent.

Common CRP Challenges and How to Overcome Them

Developing and implementing a Carbon Reduction Plan (CRP) can come with challenges, especially for small businesses with limited resources. Here are some common obstacles and tips to overcome them:

• Lack of Expertise: If your business lacks expertise in carbon accounting, consider using an online tool like Gopher Zero. Gopher’s digital carbon reduction planning service offers low-cost PPN-compliant plans that will support your business to take impactful action.
• Initial Costs: While there may be upfront costs associated with implementing carbon reduction measures, Gopher Zero’s payback calculator can show you how quickly these can be offset by savings in energy and resource efficiency.
• Data Collection: Gathering accurate data on your carbon emissions can be challenging. Start with the basics and gradually improve your data collection processes over time.

Conclusion

While the name might ring alarm bells about red tape, complying with PPN 06/21 is generally quite straightforward. By developing a Carbon Reduction Plan, your business can qualify for major government contracts. If you get it right, it can also lead you on to both enjoy potential cost savings and enhanced reputation. Get started on your CRP today to ensure your business stays competitive and sustainable.

For further assistance on creating a Carbon Reduction Plan, check out our ‘How it Works‘ page to see how quick and easy it is to get started with Gopher Zero.