Requirements for NHS suppliers to reduce carbon emissions

Are you a supplier to the NHS or central government? Learn more about the procurement require­ments for the new carbon reduction plan in this article.

The climate crisis is one of the most pressing challenges of our time, and health systems around the world are increas­ingly recog­nizing their role in mitigating this crisis.

The NHS is at the forefront of this movement with its Carbon Reduction Plans (CRP), which are key tools in the wider strategy to reduce carbon emissions across the UK healthcare sector.

But what exactly are these plans, who must create them and what infor­mation must they contain? Let’s explore these questions.

What are NHS carbon reduction plans?

NHS Carbon Reduction Plans (CRPs) are formal documents that set out how NHS organ­i­sa­tions, suppliers and associated companies plan to reduce their carbon footprint. These plans are part of wider efforts to meet the NHS’s ambitious target of becoming the world’s first national health service with net zero emissions by 2045.

This initiative is in line with the UK’s commitment to reduce green­house gas emissions under the Climate Change Act 2008, which legally commits the country to achieve net zero emissions by 2050.

The purpose of these plans is to ensure that every aspect of the NHS — from direct healthcare delivery to the procurement of goods and services — contributes to a sustainable future.

By reducing their carbon emissions, NHS organi­za­tions can reduce their negative impact on the environment, improve public health and lead by example in the global fight against climate change.

Who has to create a CO2 reduction plan?

Creating a CRP requires several key stake­holders within the NHS framework:

1. NHS Trusts and Foundation Trusts: These facil­ities form the heart of the healthcare delivery system and are directly respon­sible for a signif­icant proportion of the NHS’s carbon footprint. They must create detailed plans outlining how they will reduce emissions from their opera­tions, including energy use, waste management and trans­portation.

2. NHS suppliers: The NHS supply chain is extensive and includes every­thing from medical supplies to IT services. Out of From April 2024, a phased approach will apply as follows:
   – A full CRP, as defined in the CRP Require­ments section, is required for high value procure­ments (£5m per annum excluding VAT. VAT and above) and new frame­works operated by in-scope organi­za­tions, regardless of the value of the contract, where relevant and propor­tionate to the framework.
   – A Net Zero Commitment, as defined in the “Net Zero Commitment – ​​Require­ments” section, is required for lower value procure­ments (below). £5 million per annum excluding VAT and over £10,000 excluding VAT. VAT).

3. Primary care provider: Although GP practices, dental practices and other primary care providers tend to be smaller, they are also being encouraged to develop their own CRPs to contribute to the NHS’s overall net zero target.

What information must be included in a CO2 reduction plan?

A CRP must be forward-looking, trans­parent and include measurement of carbon emissions in accor­dance with the Green­house Gas (GHG) Protocol Standard. The plan usually contains the following infor­mation:

1. Basic emissions data: This section describes the organi­za­tion’s current carbon footprint, including Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from the gener­ation of purchased electricity, steam, heating and cooling) and part of Scope 3 (all other indirect emissions that arise in the value chain) Emissions.
2. Emission reduction targets: The plan should contain concrete, measurable targets for reducing emissions.
3. Strategies and measures: This is the core of the plan and describes the strategies and actions the organi­zation will implement to achieve its emissions reduction goals. This could include transi­tioning to renewable energy sources, improving energy efficiency, reducing waste and promoting sustainable transport options.
4. Monitoring and reporting: The plan should describe how the organi­zation will monitor its progress toward its goals, including the metrics used and the frequency of reporting. Trans­parency is key and regular progress updates are essential for account­ability. Note: This move is not officially part of existing NHS legis­lation, but we believe it is important and will help SMEs in the longer term.
5. Alignment with wider NHS goals: Finally, the plan should demon­strate how the organi­za­tion’s efforts contribute to the NHS’s broader sustain­ability goals and ensure that individual actions are part of a coordi­nated, system-wide approach.
6. Publicly released plan with director level approval: The plan must be published online and clearly signposted on the homepage of your website. It must also have been approved by the board of directors or company manager.

How do you complete the CO2 reduction plan?

You can roughly divide the CO2 reduction plan into two phases. A – Basic emissions data collection, a measurement task that can be difficult if you don’t have the right tools (more on this later).

Moving on to Part B, reviewing A and creating a more compre­hensive plan around these numbers.

How can Sage help NHS suppliers with their CRPs?

Today, SMBs using Xero, Quick­Books, Sage Business Cloud and Sage 50 can connect to Sage Earth to generate the data needed for Part A, Base Emissions Data. Companies can then use this data to complete Parts B‑E outside of the platform.

Sage Earth is currently devel­oping a new reporting capability to support SMEs throughout this journey from start to finish. Learn more about Sage Earth here.

What is PPN 06/21?

PPN 21.06 refers to a Note on procurement guide­lines issued by the British government in June (06) 2021 (21), which specifies require­ments for consid­ering CO2 reduction and sustain­ability in public procurement processes.

Specif­i­cally, PPN 06/21 was published in June 2021 with the title “Consid­er­ation of CO2 reduction plans when procuring large government contracts”. It requires all organi­za­tions bidding for large government contracts to submit a carbon reduction plan as part of their tenders.

The NHS has used the same reporting structure in its own carbon reduction plans, so the two terms are used inter­changeably.

What is driving PPN 06/21 and the CO2 reduction plans?

The legislative basis for the NHS CRPs is based on the UK’s wider environ­mental legis­lation, in particular the Climate Protection Act 2008. This law was the world’s first legally binding climate change legis­lation and committed the UK to reduce green­house gas emissions by at least 80% by 2050 compared to 1990 levels.

This target was later tightened to achieve net zero emissions by 2050 after the UK government declared a climate emergency.

In response, the NHS launched this NHS Long Term Plan in 2019, which highlighted the impor­tance of sustain­ability in healthcare.

This was followed by NHS Net Zero report in 2020, which set out the detailed roadmap for the NHS to achieve net zero emissions, including requiring carbon reduction plans.

Inter­ested in sustain­ability? Check out these other Sage Advice articles:

Diploma

The NHS CRPs represent a signif­icant step in the global effort to tackle climate change, with the health sector playing a crucial role.

These plans are not just about reducing emissions within the NHS, but also extend to suppliers and other associated businesses to ensure the entire supply chain is aligned with the UK’s net zero targets.

With the intro­duction of PPN 06/21 and subse­quent updates, including reinforcement in April 2024, respon­si­bility for carbon reduction is clearly defined and binding for all NHS suppliers.

For suppliers, this means more than just checking a box; It’s about integrating sustain­ability into their core businesses. SMEs in particular need to adapt by using tools like Sage Earth to measure their carbon footprint and develop strategies to reduce emissions.

Aligning NHS CRP require­ments with wider government policies highlights the inter­con­nect­edness of these initia­tives and drives a shared move towards a sustainable future.

By leading by example, the NHS is setting a benchmark for other sectors and showing how large organi­za­tions can mobilize entire ecosystems in the fight against climate change.