NHS extends Carbon Reduction Plan requirements from April 2024
In October 2023, NHS England published important guidance on carbon reduction plans and net zero commitments in NHS procurements. NHS suppliers need to prepare for increasing attention on emissions reduction. It's not a 'nice to have'.
The NHS has announced the planned extension of its Carbon Reduction Plan (CRP) requirements to cover all new procurements with effect from April 2024. The changes are designed to ensure that the majority of NHS suppliers support progress towards the NHS Net Zero Target (there are two parts to the target, which are explained by NHS England on its Greener NHS website), while allowing the remaining minority to make a lighter commitment. Accordingly, the CRP requirements will be applied using a two-tiered approach based on contract values:
- Full CRP :
- Contracts of £5m per annum (excluding VAT) and above;
- New frameworks where it is anticipated that the value of the contract to be awarded under the agreement is likely to be £5m per annum (excluding VAT) and above
- All new frameworks operated by in-scope organisations (irrespective of the value). According to NHS England, "in-scope" are NHS organisations and organisations acting on their behalf
- Net Zero Commitment: for all contracts below £5m per annum (excluding VAT) and above £10,000 (excluding VAT)
The CRP or Net Zero Commitment requirements will also apply to all public bodies who are bidding for NHS contracts.
For NHS organisations who are bidding for NHS contracts, a published "Green Plan" will be considered a CRP, and the NHS Net Zero Target will be equivalent to a Net Zero Commitment.
Sub-contractors are not required to provide evidence of a CRP or Net Zero Commitment, although they are encouraged to take actions to reduce their emissions and work towards the NHS Net Zero Target.
Full CRP
A full CRP must identify a supplier’s current carbon footprint, and must also include the supplier's future plans to achieve net zero emissions, for example:
- Confirmation from the supplier that they are committed to achieving the NHS Net Zero Target
- Details of the supplier's current emissions for the sources within scope 1 and 2, and a defined subset of scope 3
- Emissions reporting in relation to the seven greenhouse gases
- The environmental management measures in place in order to reach the NHS Net Zero Target
The supplier must ensure the CRP is approved by its board (or a company director), updated annually and made publicly available on the supplier's website.
The CRP requirements are aligned to the central government Procurement Policy Note 06/21. PPN 06/21 is accompanied by a CRP template, which is also available within the NHS England guidance.
Net Zero Commitment
A Net Zero Commitment is a public statement from a supplier that confirms they will achieve net zero by 2050 (or earlier, if possible). This confirmation must be approved by the supplier's board (or a company director), published on the supplier's website, and clearly signposted for the public to access easily. For those suppliers who are already complying with the current CRP requirements, they will be considered as also complying with this lighter commitment.
How can you prepare?
In the context of an NHS tender, a supplier's CRP or Net Zero Commitment will be assessed to ensure it meets the minimum requirements. This assessment will take place at either the Selection Questionnaire stage, or at contract award stage. The NHS England guidance provides an example of the Selection Questionnaire which may be useful for suppliers to consider. There is also support and guidance available to small and medium-sized enterprises, and voluntary, community and social enterprises (UK Business Climate Hub - find advice on energy saving and net zero for SMEs).
The biggest challenge for most businesses will be understanding and assessing their scope 1, 2 and 3 emissions. It must do this before filling out the relevant forms and answering questions in a tender scenario. There are net zero provisions in NHS contracts; and yes, they have teeth!