If your organization wants a government contract, you’ll have to first prove your commitment to net-zero. New measures introduced by the UK parliament require businesses to commit to net-zero by 2050 and publish transparent and credible carbon reduction plans before they can bid for major government contracts.
Under the new measures, by September of 2021, prospective suppliers bidding for contracts above £5million a year need to have committed to the government’s target of net zero by 2050 and have published a carbon reduction plan. Firms that fail to do so will be excluded from bidding for the contract.
The United Kingdom has made aggressive carbon neutrality commitments, and they are nearly halfway there. By requiring companies bidding for major government contracts to comply with the measure, not just those who successfully win contracts, they solidify their commitment to a net-zero future. This further widens the measure’s impact, as more and more suppliers must commit to achieving or lose out on significant revenue.
Lord Agnew, Minister for Efficiency and Transformation, 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.”
Reporting on carbon emissions is not uncommon for large companies in the United Kingdom. As part of the Streamlined Energy and Carbon Reporting (SECR), firms must disclose their direct energy usage, also known as Scope 1 (direct) reporting. The United Kingdom also encourages small and medium organizations to go a step further and provide their sustainability reporting voluntarily. By creating ‘The Together for our Planet‘ campaign encourages small businesses to pledge to cut their emissions net-zero by 2050 or sooner while helping them grow, adapt and seize new opportunities. They can utilize resources like the Business Climate to future-proof their business.
However, these new rules go a step further, requiring the reporting of some Scope 3 emissions, including employee commuting, business travel, transportation, distribution, and waste. Scope 3 emissions represent a significant proportion of an organization’s carbon footprint.
How can organizations quickly ramp up their carbon reduction plans?
To show an organization’s progress, they have to have a baseline of their consumption. As a business grows, so does the number of utility invoices. The method of collecting energy bills typically sits within the finance function. Accounts Payable teams typically pay a utility bill without additional validation or tracking of the data on the bill. An organization with 100 locations can easily have 400 utility bills a month. Bill collection, validation, reporting, and payment processes can be cumbersome for large businesses as sourcing electricity, gas, and water bills are time-consuming and resource-intensive.
Businesses can process utility bill collection, validation, reporting, and payment files quickly with the right Utility Bill Management partner. The data collected from the utility bill management system will then become the organization’s one source of truth. A strong UBM partner will be capable of uploading historical data for quick analysis and real-time updates with audit grade accuracy to track the organization’s progress towards its net-zero goals. The historical and real-time data can help to build the framework for the carbon reduction plan. Companies will better understand how they were tracking, gain additional insights into how they are currently tracking, what they need to be monitoring, and their progress towards their goals.
Suppose an organization has a third-party intermediary (TPI) to manage its energy category. In that case, it’s time to ask the TPI how they manage this and what solutions they offer to assist in the net-zero journey. Organizations can lean on their TPIs to advise on sustainability strategy and provide bill validation, energy management, usage reporting, payment files, carbon reporting, and contract management to meet the new reporting standards.
The British Government is creating more strategies and mandates for businesses of all sizes to reduce their carbon footprint. Organizations in the United Kingdom need to act now on carbon reduction and carbon reduction planning. A quick way to jump aboard starts with understanding energy and gas usage and water consumption across the entire organization with the help of a utility bill management platform. With deeper analytics and more data sources, scope 1, 2, and 3 reports will be within reach.