In June 2021, Boris Johnson made it clear to businesses that if they want access to major government contracts, they need to disclose and commit to net zero goals.
These new green rules have now come into effect in the UK. From 1 October 2021, businesses bidding for contracts worth more than £5 million a year must commit to achieving net zero emissions by 2050.
“The message to businesses is clear,” Andrew Griffith, UK Net Zero Business COP Champion, said, “engaging on net zero is no longer an option but a necessity from today, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts.”
If you and your company want to bid for such a contract, you must disclose that you are on a path to net zero. One way to achieve this is to adhere to the Streamlined Energy and Carbon Reporting (SECR) scheme, established in 2019. While not all companies meet the criteria to be required to comply with the SECR scheme (we explain the criteria below), even they can benefit greatly by engaging in net zero goals.
Carbon reduction planning: who must comply and what must be done
Since April 2019, quoted, LLP, or “large” unquoted companies have had to comply with the SECR scheme established by the UK government.
A large unquoted company is one which has an annual turnover of £36 million or more, a balance sheet total of £18 million or more, and more than 250 employees. Companies who fit the large unquoted company criteria but consume less than 40 MWh during the annual SECR reporting period are exempt from the scheme.
Up until recently, the scheme required companies to disclose their energy use and greenhouse gas emissions, their energy efficiency actions taken, and the methodology used to calculate the required information.
In regards to greenhouse gas emissions, companies must disclose direct and indirect emissions. These are otherwise known as Scope 1 and 2 emissions, respectively.
Companies employing an energy management solution like ClearVUE.PRO get immediate reports on their direct carbon emissions across all their sites and down to individual meters or circuits.
ClearVUE. PRO displays your several energy parameters such as costs, power, apparent, power, and more. Importantly, it can also show your organisation’s carbon emissions per site, meter, and circuit. By identifying overconsumption of energy and energy waste, you can make reductions to your energy spend appropriately and thus reduce your carbon footprint.
For reporting purposes, you can use ClearVUE. PRO’s reporting tools. You’ll be able to gather emissions data from any point in time dating back to when you start using the software.
The new green rules for bidding on major government contracts
Coming into effect 30 September 2021, new measures require businesses to commit to achieving net zero emissions if they want access to government contracts.
Any company bidding for these contracts must have a net zero route map, and not just those who successfully bid for a contract.
The new measures require reporting on some Scope 3 emissions, including business travel, employee commuting, transportation, distribution, waste, and their products. Emissions from these sources – largely connected to a company’s supply chain – represent a large proportion of an organisation’s carbon footprint. The UK government is targeting Scope 3 emissions in the new green measures to help decarbonise the UK economy as a whole and to drive forward the government’s green agenda.
The government spends £290 billion per year on procurement. The new green rules, according to the government, will ensure this procurement is spent to power a green economy.
The business case for decarbonisation and net zero
Knowing where and how to start a decarbonisation plan can be the biggest hurdle for businesses. The perceived high costs of investments in renewables is another hurdle. However, with the assistance of energy management solutions to maintain an energy and carbon reduction strategy, you can stay economically competitive while pursuing net zero targets.
Dan Smith, Head of Services for ClearVUE Systems, encourages all businesses to develop a decarbonisation plan. You do not need to aim for 100 percent decarbonisation right away (although this certainly should be the end target), he advises. Instead, you can plan to cut emissions by 25, 50, or 75 per cent by a reasonable yet still urgent timeframe.
An energy management solution to help you stay on course. Energy management is a process that allows you to effectively manage how much energy you use and how to control, monitor, and conserve as much energy as possible while still being able to meet your demands economically. Striving for net zero goals puts your business in a great position to procure government contracts, attract private investment, enhance your corporate image, and do your part for the planet.
Reach out to ClearVUE Systems today to start monitoring and controlling your energy data. ClearVUE. PRO gives you access to energy analysis and insights instantly, providing you deeper insights and clear performance metrics.