Procurement Policy Note 06/21, also known as PPN0621, is a UK Government policy published in June 2021, hence its name. It requires all central government departments, executive agencies, and non-departmental public bodies to consider carbon reduction plans when awarding contracts worth £5 million or more per year.
This is part of the legal commitment made by the UK Government in 2019 to reach net zero by 2050. In short, it means that any businesses bidding for these contracts must have a carbon reduction plan in place to demonstrate their own commitment to cutting emissions and achieving net zero.
How does PPN 06/21 affect small businesses?
At first glance, PPN0621 may seem problematic for small businesses as it requires them to spend time and resources on a carbon reduction plan. Those who already work on government contracts will need to show their commitment to sustainability or risk losing out to other providers. This may result in more public contracts being won by larger businesses that have more resources to invest in reducing emissions.
However, a carbon production plan is not as expensive as many people think and, when all the benefits are taken into account, it is often extremely cost-effective.
What are the commercial benefits of PPN 06/21 for small businesses?
By developing a carbon reduction plan, small businesses can do much more than simply comply with PPN0621 in order to bid for government contracts. Let’s take a look at the most significant benefits:
- Increased brand awareness: Small businesses can use the positive publicity of reduced emissions to boost their brand and attract new customers.
- Improved customer loyalty: Customers increasingly want to buy goods and services that are sustainably produced. Complying with PPN0621 will show your commitment to the environment and encourage customer retention and repeat business.
- Better access to non-government contracts: Many private companies are also only dealing with sustainable suppliers as this helps towards their own carbon reduction plans. Small businesses that are PPN0621 compliant will be seen as trustworthy companies that are committed to reducing emissions.
- Reduced costs: As well as switching to sustainable providers, a significant part of a carbon reduction plan is looking at ways to reduce the amount of energy a business uses. So, after the initial investment to make changes, many small businesses find that their ongoing costs are significantly lower.
- Improved access to finance: Developing a carbon reduction plan and complying with PPN0621 demonstrate a business’s commitment to a long-term sustainable future. This makes them more attractive to lenders who want to ensure a return on their investment. Additionally, small business grants from local councils are often now dependent on an effective carbon reduction plan.
How do small businesses become PPN 06/21 compliant?
To comply with PPN0621 and become eligible to bid for UK government contracts, small businesses must have an accurate and detailed carbon reduction plan in place. This should clearly show what the company’s current carbon footprint is, what targets they are aiming for to reduce emissions, and a roadmap for achieving these targets.Read more here about carbon reduction plans and how you can create one completely FREE with Small99 Hero.