NHS England has announced that from April 2023, suppliers to the NHS must have in place a publicly available Carbon Reduction Plan (CRP). A Carbon Reduction Plan (CRP) identifies a supplier’s current carbon footprint and their plan to achieve net zero emissions.
NHS suppliers will be required, as a condition at the selection stage of a procurement process, to confirm that they comply with this requirement. These requirements will apply to the commissioning and purchasing of goods, works and services (including healthcare services).
These changes are not entirely new. In 2021 these requirements became applicable in central government procurement, with the expectation that the same requirements would flow to the rest of the public sector in due course. We reported on the 2021 requirements here.
NHS organisations, and organisations acting on their behalf, will require all suppliers of new contracts, with an anticipated value above £5 million per year (excluding VAT), to publish a CRP for their emissions. These requirements will be entirely separate from the requirement for NHS Commissioners to include a minimum 10% weighting at the award stage of a procurement process for net zero and social value.
How will these requirements apply in practice?
In the procurement process, at selection stage, the CRP will be assessed in the form of a pass/fail check. Suppliers whose CRPs do not meet the minimum requirements stated will be rejected from the procurement process.
The CRP must:
- confirm the bidding supplier’s commitment to achieve net zero by 2050 or earlier for UK operations;
- provide the supplier’s current emissions for the sources included in scope 1 and 2 of the GHG Protocol, and a defined subset of scope 3 emissions;
- provide emissions reporting in CO2e (carbon dioxide equivalent) for the seven greenhouse gases covered by the Kyoto Protocol;
- set out the environmental management measures in effect;
- be board approved or company director approved if no board is in place
- be clearly signposted and published on the supplier’s website
- be updated at least annually.
The CRP should be specific to the bidding entity, but may cover the bidding entity and its parent organisation if certain criteria are met.
Are there any exceptions?
Yes. For NHS to NHS contracts, a Trust or ICB Green Plan will be acceptable in place of a CRP. Similarly, another (non NHS) public sector bidder that is bidding for a contract must have a plan tat makes equivalent commitments to a CRP. Subcontractors are out of scope, and do not need to provide a CRP. There is also an “exceptional circumstances” carve out that allows entities to take part in a procurement process in the absence of a CRP when they provide an “acceptable reason” for being unable to gather emissions data. The example is given of SMEs and voluntary, community and social enterprises (VCSEs) who have “acceptable reasons”. Further clarity on the scope of this exemption will hopefully follow in due course.
What about frameworks?
The requirement to publish a CRP will apply to the procurement of new framework agreements and also to dynamic purchasing systems where it is anticipated that there will be call-off contracts may exceed £5m in value per year.
More resources and guidance are available from NHS England here. If you would like to discuss the content of this update, please contact Patrick.Parkin@burges-salmon.com or your usual Burges Salmon contact.
Update written by Akosua Moore and Patrick Parkin