Businesses will only be allowed to seek major government contracts if they have committed to net zero emissions by 2050, it has been announced.
Making the announcement on World Environment Day, the UK Government has said that firms will have to publish “clear and credible” carbon reduction plans before they will be allowed to bid for government contracts worth more than £5 million a year.
The new rules are set to come in by September this year, with firms which fail to publish a carbon reduction plan and commit to the net zero by 2050 target being excluded from major bidding processes.
Carbon reduction plans usually report where an organisation’s carbon emissions come from and detail what environmental management plans are in place.
Speaking about the plans, the Government’s Minister for Efficiency and Transformation, Lord Agnew, 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.
“These measures will help green our economy, while not overly burdening businesses, particularly SMEs.”
The new procurement rules come ahead of the UK hosting the COP26 climate change summit later this year, in which the UK Government is hoping to act as a global leader in tackling the climate emergency.
The new rules have received the support of the CBI (Confederation of British Industry), with Tom Thackray, Director of Infrastructure and Energy, at the CBI saying “these changes will encourage more firms across the country to demonstrate their own commitment to net zero when bidding for government contracts.”