What NHS suppliers need to know about the new Carbon Reduction Plan requirements

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

The climate crisis is one of the most pressing challenges of our time, and healthcare systems worldwide are increasingly recognising their role in mitigating it.

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

But what exactly are these plans, who needs to produce them, and what information must they include? Let’s delve into these questions.

What are NHS Carbon Reduction Plans?

NHS Carbon Reduction Plans (CRPs) are formal documents outlining how NHS organisations, suppliers, and associated entities plan to reduce their carbon footprint. These plans are part of the broader effort to achieve the NHS’s ambitious goal of becoming the world’s first net zero national health service by 2045.

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

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

By reducing their carbon emissions, NHS organisations can decrease their negative environmental impact, improve public health, and lead by example in the global fight against climate change.

Who needs to produce a Carbon Reduction Plan?

Several key stakeholders within the NHS framework are required to produce a CRP:

1. NHS Trusts and Foundation Trusts: these entities are at the core of the healthcare delivery system and are directly responsible for a significant portion 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 transport.

2. Suppliers to the NHS: the NHS supply chain is vast, encompassing everything from medical supplies to IT services. From April 2024, a tiered approach applies as follows:
   – A full CRP, as defined in the section “CRP Requirements”, is required for procurements of high value (£5m per annum exc. VAT and above) and new frameworks operated by in-scope organisations, irrespective of the value of the contract, where relevant and proportionate to the framework.
   – A Net Zero Commitment, as defined in the section “Net Zero Commitment – Requirements”, is required for procurements of lower value (below £5m per annum exc. VAT and above £10k exc. VAT).

3. Primary care providers: GP practices, dental practices, and other primary care providers, while generally smaller in scale, are also encouraged to develop their own CRPs to contribute to the NHS’s overall net-zero target.

What information must be included in a Carbon Reduction Plan?

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

1. Baseline emissions data: this section outlines the organisation’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 a portion of Scope 3 (all other indirect emissions that occur in the value chain) emissions.
2. Emission reduction targets: the plan should detail specific, measurable targets for reducing emissions.
3. Strategies and actions: this is the core of the plan, outlining the strategies and actions the organisation will implement to achieve its emission reduction targets. 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 organisation will monitor its progress towards its targets, including the metrics used and the frequency of reporting. Transparency is key, with regular updates on progress being essential for accountability. Note: this step is not formally within the existing NHS legislation, but we think it is important to consider and will help SMBs longer term.
5. Alignment with wider NHS goals: finally, the plan should demonstrate how the organisation’s efforts contribute to the NHS’s broader sustainability objectives, ensuring that individual actions are part of a coordinated, system-wide approach.
6. Publicly published plan with director level sign-off: the plan must be published online and clearly signposted from your website homepage, it will also need to have been approved by the board or company director.

How do you complete the Carbon Reduction Plan?

You can broadly break down the carbon reduction plan into 2 stages. A—baseline emission data collection, which is a measurement exercise that can be difficult if you don’t have the right tools at your disposal (more on that later).

Parts B onward, reviewing A and building a wider plan around these numbers.

How can Sage help NHS suppliers with their CRPs?

Today, SMBs who use Xero, QuickBooks, Sage Business Cloud, and Sage 50 can connect to Sage Earth to generate the data needed for part A, the baseline emissions data. Businesses can then use this data to complete parts B – E outside of the platform.

Sage Earth is currently developing a new reporting feature to support SMEs through this full journey end-to-end. Learn more about Sage Earth here.

What is PPN 06/21?

PPN 06/21 refers to a Procurement Policy Note issued by the UK government in June (06) 2021 (21) that sets out requirements for considering carbon reduction and sustainability in public procurement processes.

Specifically, PPN 06/21, titled “Taking Account of Carbon Reduction Plans in the Procurement of Major Government Contracts,” was published in June 2021. It mandates that all organisations bidding for major government contracts must provide a Carbon Reduction Plan as part of their tender submissions.

The NHS has used the same reporting structure with its own Carbon Reduction Plans, so the 2 terms are used interchangeably.

What is driving PPN 06/21 and Carbon Reduction Plans?

The legislative foundation for the NHS’s CRPs is rooted in the UK’s broader environmental legislation, particularly the Climate Change Act 2008. This Act was the world’s first legally binding climate change legislation, committing the UK to reducing greenhouse gas emissions by at least 80% by 2050, compared to 1990 levels.

This target was later strengthened to achieve net-zero emissions by 2050, following the UK government’s declaration of a climate emergency.

In response to this, the NHS launched the NHS Long Term Plan in 2019, which emphasised the importance of sustainability within the healthcare sector.

This was followed by the NHS Net Zero Report in 2020, which set out the detailed roadmap for the NHS to achieve net-zero emissions, including the requirement for Carbon Reduction Plans.

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

• Not all carbon offsets are equal: a guide to help you pick the right schemes
• A profitable planet: How climate literacy can boost your bottom line
• How to do sustainability right and avoid becoming a “zombie company”

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Conclusion

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

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

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

For suppliers, this means more than just a box-ticking exercise; it’s about integrating sustainability into their core operations. SMEs, in particular, must adapt by leveraging tools like Sage Earth to measure their carbon footprint and develop strategies for emission reductions.

The alignment of the NHS’s CRP requirements with broader government policies highlights the interconnected nature of these initiatives, driving a collective move towards a sustainable future.

As the NHS leads by example, it sets a standard for other sectors, illustrating how large organisations can mobilise entire ecosystems in the fight against climate change.