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HCR Law Events

8 September 2021

What has cultural change and Covid got to do with tech, carbon and procurement?

Technology has been developing at pace in recent decades as part of what has now been termed the ‘fourth industrial revolution’ and the pandemic forced firms to harness technology to keep businesses running, goods moving and key services in progress.

Lockdowns across the world as well as in the UK brought about a significant reduction in carbon producing activities, such as the daily commute, and a seismic shift in our attitudes to flexible and remote working. Tech has meant that businesses could embrace new working practices and do so with reduced impact on the environment.

Changes to public procurement now mean that if you want to do business with government, you must do business in an environmentally friendly way; that means embracing available technology and possibly the change in working practices imposed by Covid-19.

 

How is the net zero target involved?

To help to achieve net zero greenhouse gas emissions by 2050 (compared to 2019 levels) , the Cabinet Office have issued a Procurement Policy Notice which requires government departments to ensure that when procuring goods and/or services, the suppliers they select have a credible net zero plan at the selection stage of bidding.

This will be applied by all central government departments from 30 September to projects with an anticipated value above £5m per annum (excluding VAT) which are subject to the Public Contracts Regulations 2015. Where the policy would not be proportionate to the contract, exemptions can be sought.

 

What will I be required to do?

When the government assesses a potential supplier’s technical ability, you will need to submit a credible Carbon Reduction Plan (CRP) which outlines your plans to achieve net zero by 2050. You must detail how you will implement environmental management measures throughout the duration of the contract.

You will be required to submit a CRP at the selection stage of bidding, which must comply with the Cabinet Office guidance and include your current carbon footprint. The CRP should be approved by a director, updated regularly and published prominently on your company website. Failure to publish and submit a credible CRP will result in exclusion from bidding. Each CRP will be assessed within its context, including whether it is proportionate within the contract or owing to the size and capability of the supplier.

Crucially, while some businesses already self-report on parts of their emissions known as Scope 1 (direct) and Scope 2 (indirect) emissions, the new rules go further by requiring Scope 3 emissions: more on that below.

As a result of Covid-19, you may already be operating with a reduced carbon footprint. For example, as a result of disruption to the supply chain, you may have sourced components in the U.K. to avoid air restrictions or you may have decided not to renew the lease on one or more of your commercial properties. You can turn these changes into commercial advantage when it comes to government procurement by including them within your CRP as positive steps you have taken, and which will inform the decisions you make in the future.

Introducing some simple technologies to reduce your carbon footprint, such as changing traditional lighting to LED, or opting for electric vehicles within your fleet, can be hugely effective. Using conferencing platforms to meet with new or existing clients or host events can all count towards your effort to reduce carbon.

More advanced technologies, such as artificial intelligence or machine learning can be introduced into your processes to reduce waste or increase efficiency and can also reduce your carbon footprint. From agriculture to advanced manufacturing, there are a wide range of commercially available technologies that can help your business to reduce its carbon footprint.

Scope 3 reporting includes activities which produce emissions inherently linked to how you manage your workforce, such as business travel, employee commuting, transport, distribution and waste. With fewer staff making the daily commute, fewer computers and lights being used in the office and less waste being produced, flexible working could be driving down your carbon output. With fewer employees physically present, you may be able to reduce your footprint further by having smaller or fewer offices.

Your use of technology could also cut your carbon footprint, with no need to fly, drive or travel generally to do business. Embracing that could help you in the tender process and if your systems are reinforced with cyber defences and insurance, that will make your bid even more robust.

 

Develop your business and tackle climate change!

By embracing technology and the changing workforce culture, reaching net zero by 2050 is more achievable. Lessons from the Covid-19 crisis can be carried forward to help us do business in a sustainable way. New technologies, flexible working and small changes to the way you work can be good for your employees, for your business and the environment. It is important to introduce new technologies and practices, particularly software and remote working, with measures to ensure they are secure to protect you and the data you hold.

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About the Author
Richard Morgan, Partner, Head of Dispute Resolution, Defence, Security and the Forces Sector

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