10 Carbon Reduction Plan mistakes to avoid

Carbon Reduction Plan, Public Procurement

Our Head of Sustainability, Laurence Adams, highlights some of the traps to avoid when it comes to reporting your carbon footprint and completing a PPN 06/21 compliant Carbon Reduction Plan.

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Table Of Content

Carbon Reduction Plan mistakes

Terms we use in this guide

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We try to keep jargon to a minimum, but there are a few technical terms we use in this guide that are worth defining before you read on:

Carbon

Short for carbon dioxide, the most important greenhouse gas, but used here as shorthand for greenhouse gases in general.

Carbon Accounting/Footprinting

The process of measuring and calculating the greenhouse gas emissions you are directly and indirectly responsible for, usually expressed in metric tonnes of carbon dioxide equivalent.

Carbon Reduction

The process of reducing your greenhouse gas emissions by avoiding or reducing activities that emit greenhouse gases.

Carbon Reduction Plan

A short document that provides information on an organisation’s carbon footprint, its targets and the measures being taken to achieve them, often required as part of bids for UK public contracts (see What PPN 06/21 means for public procurement).

Climate Change

The long-term, large-scale changes to Earth’s weather patterns due to global warming.

Emissions Factor

A coefficient used in carbon accounting to translate data (such as kWh or litres of fuel) into the associated greenhouse gas emissions for a given activity.

Greenhouse Gas Emissions

Gases, like carbon dioxide, which prevent heat from escaping the Earth’s atmosphere (a process known as the ‘Greenhouse Effect’). Often referred to as ‘carbon’ or ‘emissions’ for short.

Greenhouse Gas (GHG) Protocol

An globally-recognised provision of standards and guidance for organisations to measure and manage their greenhouse gas emissions.

Net Zero

Reducing greenhouse gas emissions to an absolute minimum to achieve a net balance between the amount being produced and the amount being removed from the atmosphere.

PPN 06/21

A Procurement Policy Note requires suppliers to provide a Carbon Reduction Plan as part of the procurement process for some public sector contracts.

Scope 1

A carbon footprint category that measures greenhouse gas emissions generated directly from assets or facilities an organisation owns or controls (e.g. gas heating and fuel consumed by fleets)

Scope 2

A carbon footprint category that measures greenhouse gas emissions organisations are indirectly responsible for through the energy they purchase (e.g. electricity)

Scope 3

A carbon footprint category that measures other greenhouse gas emissions organisations are indirectly responsible for in their wider value chain (e.g. the purchasing of goods and services, employee commuting, etc.)

Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their own needs (e.g. by causing environmental harm).

Avoiding Carbon Reduction Plan pitfalls

On the surface, Carbon Reduction Plans look like relatively straightforward documents. Just a few pages of high level information, following a template already set out for you, evaluated on a pass/fail basis.

Sounds simple enough, right?

Not necessarily. These humble documents are public declarations that should be taken seriously. They are easy to get wrong, especially if you are new to it. But more importantly, they can be hugely valuable for reasons that go far beyond your tender bid if you get them right. Want to learn more? Heres a Carbon Reduction Plan template to get you started.

Here are just a few common pitfalls worth avoiding…

1. Not having a clear process for carbon accounting

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Gathering cold, hard carbon footprint data is the most time-consuming part of complying with PPN 06/21. The process can sometimes feel a little overwhelming, especially for first timers.

There’s a lot of data to collect, and not all of it is readily available. Examples of what you may need include:

  • Utilities (electricity, gas, water and any other fuel consumption)
  • Mileage for the vehicles you own or control
  • Refrigerant gases used in refrigeration or AC units
  • Records of all business travel, including distances, modes of transport and/or £ spent
  • Distances and modes of transport used by staff on their commute
  • Types, weights and/or volumes of waste generated by your operations
  • The waste treatment methods used by your waste management provider
  • Distances, weights and modes of transport for goods and services supplied to you
  • Distances, weights and modes of transport for goods delivered to your customers.

As you can imagine, all this can be very time-consuming to identify and bring together in one place. You should have an effective filing system for carbon accounting that is updated regularly – ideally on a quarterly or monthly basis.

At the risk of sounding like your accountant, it’s a bit like a tax return – leave it to the last minute at your peril!

2. Overlooking in-scope activities

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The carbon footprint you report in your Carbon Reduction Plan has to follow the holy grail of carbon accounting, known as the Greenhouse Gas Protocol (GHG) Standard.

If you’re tackling PPN 06/21 on your own, you need to familiarise yourself with this sacred text. But at 116 pages long, I’d be lying if I said it made good bedtime reading.

One of the tricky bits is what we in the sustainability world call ‘boundary setting’ – deciding which greenhouse gas emitting activities are in scope for your organisation.

The standard approach is to report on activities you have operational control over, but that’s not always as straightforward as it sounds.

I’ve seen more than a few unfortunate organisations get tied up in knots trying to work out which Scope certain activities belong in, or incorrectly omit whole categories thinking they do not apply to them.

Here are some common ones to watch out for:

  • Skipping building energy use because you do not own your building (even if you rent your premises, any energy consumption you have operational control over is in-scope)
  • Missing refrigerant emissions through air conditioning and/or refrigeration systems (particularly important if you have a lot of this equipment)
  • Reporting ‘0’ under Scope 2 because you have a renewable electricity tariff (you should still report a figure based on standard UK electricity figures)
  • Skipping the waste category because you do not create product waste (your general office waste still counts!)
  • Skipping the upstream transport and distribution category because you do not supply physical products (you may still be purchasing transportation and distribution services, e.g. couriers).

Even when a Scope or category doesn’t apply to you, you must provide an acceptable explanation in your Carbon Reduction Plan. Never leave a section blank.

Confusing? Don’t worry – knowing the GHG Protocol Standard front to back should be our cross to bear, not yours!

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3. Not realising emissions factors change every year

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This is a simple one, but any easy mistake to make. Emissions factors – the multipliers by which you convert your activity data into greenhouse gas emissions – change. The figure you use for an activity one year may not necessarily be the same figure the following year.

Take the emissions factor for UK electricity, for example. Thanks to the increasing amount of renewables like wind and solar on the electricity grid each year, the emissions factor for electricity has been on a general downward trend. However, in 2023 the emissions factor actually went up, so you need to keep on your toes!

Long story short: if you’re calculating your carbon footprint yourself, make sure you update your emissions factors every year.

Discuss Carbon Reduction Plan

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4. Picking targets and baselines out of thin air

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The ultimate purpose of a Carbon Reduction Plan is to help the supplier and their customer to reduce their greenhouse gas emissions.

Public bodies have targets to reach net zero greenhouse gas emissions by 2050 at the latest. Under PPN 06/21, you must formally agree to the same target (or sooner if you can).

It’s also recommended that you set interim near-term goals to help you stay on track.

Near-term targets can be key milestones (e.g. 2030) or regular intervals (e.g. every five years). But don’t fall into the trap of simply picking numbers out of thin air because they sound nice.

Near-term targets should always be:

Science-based (i.e. aligned with climate science and the level of ambition required by our collective international agreements on climate change)

and

Informed by your data and what is actually achievable for your organisation

It’s also worth thinking carefully about what makes a good baseline year to measure against.

Consider the following questions:

  • Is your baseline a year you have reliable and comprehensive data for?
  • Is it representative of a typical year that can be compared against others like-for-like?
  • Does it coincide with any substantial organisational change or restructuring?
  • Does it capture a good history of your operations?
  • Does it help you evaluate the success of past carbon reduction measures?
  • Does it align with your wider strategic planning?

There’s nothing worse than publicly committing to something that you end up having to row back on because you didn’t think it through properly. It’s not a good look.

5. Remembering to backdate your accounts

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For carbon footprints to actually be useful, they have to be comparable year-on-year so you can track progress towards your targets.

This means the activities being measured and the data being used must remain consistent from your baseline up to the present day.

But that isn’t always easy, because carbon footprinting is an ever-evolving process. Over time, the quality of data you have at your disposal will change.

For example, you may start out having to roughly estimate the amount of waste you produce each year, but at a later date your waste management provider may be able to provide you with accurate data.

Alternatively, there might be an activity you couldn’t report on before, or you didn’t think was relevant, but now have access to the right data to do so.

When this happens, it’s important you re-baseline all your footprints. That means going back over your previous years and updating the calculations as best you can to account for your updated approach.

Without backdating, major changes to your methodology will end up skewing your data and make like-for-like measurements impossible.

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6. Not using data to inform carbon reduction activities

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Carbon footprinting and setting targets is a big part of your Carbon Reduction Plan, but it’s not the only part.

Your Plan also needs to detail the environmental management and carbon reduction measures you have in place and which will be in effect during the performance of the contract you are bidding for.

Measures can include projects you have implemented or plan to implement, such as upgrading old equipment or implementing a new travel policy, or any certification schemes you may have in place or plan to attain, such as ISO14001.

The measures you list must be relevant and applicable during the performance of the contract you are bidding for. This means thinking carefully about what you can do specifically to reduce your carbon footprint.

Look closely at the breakdown of your greenhouse gas emissions and focus your efforts on the areas that:

Have a high impact on your overall carbon footprint

and

You can feasibly make progress on during the length of the contract

For example, if you are an office-based business that uses barely any water and produces little waste, focusing on water-saving or recycling measures will be far less impactful than focusing on higher impact areas like reducing business travel.

In contrast, if you are a manufacturer business travel may not be a priority. Instead, you may have more impact looking at ways to reduce raw material usage or energy consumption.

This activity is a simple version of what we call a Materiality Assessment – a key part of any sustainability strategy and something we absolutely love doing with our clients.

> Interested in a materiality assessment?

7. Relying on a parent company

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If you are a subsidiary of a larger company that already has a Carbon Reduction Plan or carbon footprints to hand, that’s useful – but it’s not enough for you to pass the criteria for PPN 06/21 on its own.

Submitting a parent company’s Carbon Reduction Plan is only allowed in very particular circumstances, where:

  • The bidding supplier (you) is wholly owned by the parent company
  • The Plan states that the commitment to achieve net zero by 2050 also applies to you as well as the parent company
  • The environmental and carbon reduction measures set out in the plan are able to be applied by your organisation specifically when performing the contract
  • The Plan is published on your website, not just your parent’s.

Even then, the guidance states suppliers must ensure they have their own Carbon Reduction Plan “as soon as reasonably practicable” and that the ability to rely on a parent company “may only be a temporary measure”.

There’s a good life lesson here isn’t there? You can’t stay dependent on your parents forever!

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8. Submitting an out-of-date Carbon Reduction Plan

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Another simple mistake that’s easily done. Carbon Reduction Plans should be reviewed and updated annually.

Unless you can provide a reasonable explanation why, the most recent reporting year of your Carbon Reduction Plan must be no more than 12 months from the date the procurement you are bidding for commences.

For example, if your reporting period aligns with the financial year, and you are bidding in a tender process than begins in August 2024, the carbon footprint reported in your Carbon Reduction Plan must cover the 2023/24 financial year.

To this end, it’s best practice to review and update your Plan within six months of your organisation’s financial year-end.

> Refresh your Carbon Reduction Plan

9. Missing out on the true value of the exercise

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Okay, a Carbon Reduction Plan may land of your desk as a requirement for a tender bid. But that doesn’t mean you should see it as a tendering document that has no wider purpose.

The reason you are being asked to produce one is to help your customer understand the carbon footprint of its supply chain and give them confidence you are committed to the same environmental goals they are.

You are part of their solution. When you reduce your carbon footprint as a supplier, it indirectly reduces theirs by association.

So if you can demonstrate you take the climate impact of your organisation seriously, and you can demonstrate year-on-year improvement, you are putting yourself in good stead as a trusted future-proof partner of choice.

I say ‘future-proof’ here because the pressure to achieve and report carbon reductions will only increase. The NHS, for example, has already set out a roadmap to gradually increase the requirements on all suppliers over the coming years.

Your Carbon Reduction Plan isn’t something to be kept in a drawer and only brought out during contract bids. Put it on the boardroom agenda. Act on it. Share it with your stakeholders. And it will repay the effort you put into it tenfold.

> Shout about your good work

10. Trusting the wrong solution provider

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Last but by no means least, you’re far from alone if you need the services of an external expert to guide you through all this. But choose carefully – one of the biggest causes of all the problems I’ve listed above is businesses placing their trust in the wrong helping hands.

If you usually use a bid writing consultant when responding to public tenders, they may offer to do your Carbon Reduction Plan for you as part of their service.

However, even if well-intentioned, most bid writing consultants are not sustainability experts.

  • Do they know their refrigerants from their radiative forcing?
  • Are they clear on the difference between an organisational and an operational boundary?
  • Do they know about dual reporting of Scope 2 when you have a renewable energy tariff?
  • Do they understand how to set a science-based target?
  • Can they actually give knowledgeable advice on relevant carbon reduction measures, and spell out the business case for implementing them?

The list goes on. These are all things a good sustainability consultant is comfortable with, but not your average bid writer. So make sure to ask them for proof they can do the job well.

Unfortunately, it’s not uncommon for businesses to come to us to sense check a Carbon Reduction Plan someone else has prepared for them, and for us to find it sub-standard.

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Mind boggled? You’re not alone.

As you can see, there is more than meets the eye to the humble Carbon Reduction Plan.

You don’t necessarily have to be a sustainability expert to get it right, but you should know that it’s okay to ask for help if you need it.

Click the link below to book a free consultation with one of our sustainability experts. We guarantee you’ll get value and ideas from a call, even if we aren’t the right fit for the future.

Is sustainability stuck on your to-do list?

  • Overwhelmed by the sheer scale of the sustainability challenge?
  • Confused by constantly changing goalposts & expectations?
  • Unsure how to pivot your business to find opportunities for innovation and competitive advantage?

Don’t worry. We’ve got your back.

Meet the author

Laurence Adams
March 15, 2024
Laurence is a sustainability and communications expert who has been working with businesses on climate communications and strategy since 2014. Laurence will help you design a winning climate strategy that not only improves your business, but influences others to follow your lead.