SMEs must commit to net zero by 2050 to win major government contracts

Businesses across the country will be required to commit to net zero by 2050 in order to win major government contracts.

The government has today unveiled new measures which will require businesses to commit to net zero by 2050, as well as publishing “clear and credible” carbon reduction plans, before they can bid for major government contracts.

Under the new measures, prospective suppliers bidding for contracts above £5m a year will need to have committed to the government’s target of net zero by 2050 and have published a carbon reduction plan in place by this September.

Minister for Efficiency and Transformation, Lord Agnew, explained: “The government spends more than £290bn 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.”

Tom Thackray, director of infrastructure and energy at the CBI, added: “As the world looks towards the UK and COP26 for leadership on decarbonisation, business is already playing a vital role in driving progress towards a greener future.

“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.

“Partnership between the public and private sectors can make the UK a global role-model, not only in delivering vital public services but working together to tackle climate change.”