Our Guide to PPN 06/21 (Procurement Policy Note 06/21)

Climate change isn’t going away, and in turn – countries like the U.K.  are upping their environmental game in order to adhere to all of these measures necessary to drastically reduce emissions. One of these new tactics include the PPN 06/21, otherwise known as the Procurement Policy Note 06/21.

👉 What is the PPN 06/21, and how will it ensure that businesses will comply with the new necessary environmental regulations?

PPN 06/21 was released so that the UK government can more easily determine if a company is taking the necessary steps to measure their carbon footprint and ultimately reduce their environmental impact.

If companies and organisations bidding on contracts in the United Kingdom fail to comply with the requests delineated in the PPN 06/21, they will automatically be excluded from the possibility of winning the tender. In other words, the PPN 06/21 is acting as an incentive for businesses to adhere to net-zero strategies and to track their current carbon emissions.

👉 Note that PPN 06/21 applies to UK and overseas companies, the crucial factor is that they have chosen to submit a bid for a government tender valued at over £5 million per annum.

If your business qualifies as one that must comply with PPN 06/21, how can you make sure that your company adheres to the regulations successfully? 

First off, in order to know which steps are necessary to take to start setting a net-zero target, it is imperative that a company first measures their current carbon emissions. Think of it like trying to get a better score on the next math test at school after the last one – you should always study what you don’t know, not what you do know. This is because it’s futile to exercise your knowledge on something you’ve already mastered, as it can’t be improved anymore. The same applies to creating a net-zero strategy and setting new carbon emission reduction tactics – you can’t reduce your emissions if you don’t know what’s holding you back from success in the first place.

As per the requirements delineated in the Procurement Policy Notice released June 21st, 2021 – all companies must specify both their measurements and emission reports to adhere to the reporting standard published by the government regarding carbon reduction plans, follow the corporate standard for GHG Reporting Protocol, and adjust all greenhouse gas and carbon emissions estimates to adhere to the relative conversion factors also published by the U.K. government. 

PPN 06/21 also requires that all companies that must adhere to the PPN 06/21 to provide a detailed report of specific subsets of their scope 3 emissions, which will serve as a representation of their true commitment to create a net-zero strategy.

After all of these requirements have been met, then a company can begin to set their new environmental targets which are meant to help them achieve net-zero emissions by 2050. The last requirement for those that must comply with PPN 06/21 is to provide a detailed report that clarifies your company’s past, current, and future rate of emission reductions – and how these future reduction tactics are meant to be more successful in reducing emissions than previous plans. 

We here at Greenly can help you with all of the above and more. If you’re looking for help to measure your carbon emissions and develop a personalised plan to achieve net-zero emissions – don’t hesitate to contact us. 

What is the U.K. hoping to achieve with PPN 06/21?

The main goal of PPN 06/21 is to help the U.K. government ensure that they are working towards their goal of achieving net-zero emissions by 2050 by incentivising businesses to take their carbon emissions more seriously.

By requiring all entities who wish to bid on a public work contracts valued at over £5 million per annum – these large companies, which are usually subject to the production of excess emissions, will inevitably be required to track and monitor their environmental impact moving forward, and ultimately help the U.K. achieve their net-zero emissions by 2050 target.

Many people get confused between the different environmental terms thrown around, and one of them is being net-zero. Given that PPN 06/21 requires companies and organisations bidding on government contracts worth over £5 million to adhere to a net-zero policy – it’s essential to understand what 'net-zero' means. 
Companies contribute to the net-zero global target, when the amount of emissions they create are equal to the amount of emissions they remove from the atmosphere. Many companies make use of carbon capture and storage machines or invest in carbon offsetting projects to do so. 

Think of a rain gutter when it’s pouring outside: even though the rain might be accumulating quickly when it’s pouring rain, the gutter also disperses of the rain at an equal rate to ensure that the gutter never ends up overflowing. Net-zero works the exact same way; individuals and companies ensure to mitigate emissions at the same rate they are producing them to make sure they do not contribute to excessive emissions.

Has PPN 06/21 proven itself as a useful incentive to make companies operating in the U.K. become more aware of their emissions and the value of achieving net-zero?

There are two problems which keep PPN 06/21 from being as successful as it could be.

One, PPN 06/21 only applies to companies that want to bid on government contracts exceeding £5 million per annum, that begin after the commencement date of the procurement policy itself – which was 30 September 2021. This means that companies who bid on government contracts before this date are not subject to adhere to PPN 06/21. In short, PPN 06/21 will likely influence the reporting and tracking of emissions for future large companies in the U.K., but not for the older companies that are likely stuck in their ways and are still promoting unsustainable habits and not striving to reach net-zero emissions in the slightest. 

Second, PPN 06/21 is too new to see if it has had a direct impact on reducing emissions for the new contracts that are required to comply with the procurement policy. Given that the U.K. has recently implemented several new environmental tactics, such as the. U.K. Environment Act of 2021, the Ten Point Plan, the U.K. Hydrogen Strategy – it’s difficult to decipher if any reduced emissions are a result of PPN 06/21, or something else. 

In short, PPN 06/21 has the potential to motivate new contracts and companies to reduce their emissions and contribute to the net-zero target to help the U.K. meet their environmental goals and fight against climate change. 

How can your company implement the ideals behind PPN 06/21?

Even if your company isn’t expected to comply with PPN 06/21, it doesn’t mean you can’t incorporate what they are trying to establish as a new norm in the industry – policies to reduce emissions and work towards net-zero by 2050.

As explained earlier, it’s next to impossible to begin reducing your emissions if your company is unaware of what is creating such a large carbon footprint in the first place. Therefore, it’s essential to do a carbon assessment for your company before developing a net-zero strategy or any other carbon reduction plan.

Reducing emissions is essential, but in order to contribute to net-zero – you have to offset your residual emissions as well. This is why so many companies commit to investing in carbon offsetting projects and purchasing innovative technologies like carbon capture and storage systems that can help them make sure they remove whatever emissions they end up producing.

Both of these tactics could be expensive right off the bat, but both could prove efficacious for your business if your company is determined to maintain their newfound motivation to become sustainable and more environmentally friendly.

Will adhering to the requirements of PPN, such as reducing emissions and striving for net-zero, help the future of your company?

It’s likely that at first glance, you might view PPN 06/21 as a nuisance to your business – as just another piece of superfluous paperwork that must be completed before you can get your company up and running. However, on the contrary – while it may seem tedious, the intent behind PPN 06/21 can actually help the future success of your business in the long run. 

New environmental policies like PPN 06/21 are going to keep popping up all over the world. In that case, it’s best to get ahead and beat the system while you can – as planning for the worst never did any harm.

If reading this article about PPN 06/21, or the Procurement Policy Note published on 21 June 21 2021 has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!

Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.