Firms bidding for major public sector contracts must sign net zero pledge

Businesses bidding for major UK Government contracts will have to pledge to work towards a net zero carbon output by 2050 in order to be considered, in what is being touted as a world-first move.

The Cabinet Office said firms will have to publish “clear and credible carbon reduction” plans before seeking to become public sector contractors.

Officials said the measures, announced to coincide with World Environment Day on Saturday and coming before the Cop26 climate conference in Glasgow in November, makes the UK Government the first in the world to put such a requirement in place.

Under the new measures, by September prospective suppliers bidding for contracts worth more than £5 million a year will need to have committed to the Government’s target of being net zero by 2050 and have published a carbon reduction plan.

Firms which fail to do so will be excluded from bidding for work.

Cabinet Office minister 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 measures will apply to all central Government departments and arms-length bodies.

Tom Thackray, Confederation of British Industry (CBI) director of infrastructure and energy, 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.”

A spokesman for the Business Services Association said it welcomed the move as “another important step on the road to net zero”.