By Jamie Chesnutt and Naomi Charlesworth-Helme
Introduction: The Time to Act is Now
The NHS net zero commitment is now a critical requirement for suppliers of the NHS, underpinned by the broader Greener NHS initiative. If you’re a supplier and you’re not aligned with these new sustainability standards, you risk losing contracts that could be worth millions. With £27 billion in NHS procurement spending annually, adapting to these new requirements is not just important —it’s essential for survival. By partnering with Auditel, you can not only meet these evolving standards but also position your business for long-term success in the NHS supply chain with Structured Carbon Account Management and measures to reduce Carbon moving forward.
KEY PARAMETERS FOR APPLICABILITY: WHAT YOU NEED TO KNOW
Carbon Report requirement for New Procurements:
From April 2024, the previous contract threshold of >£5 million per annum, requiring the publication of a Carbon Reduction Plan (CRP) was proportionately extended to cover all new procurements. The annual CRP report should detail Scope 1, 2 and five subset areas of Scope 3 emissions as a minimum declaration. This includes NHSSC framework renewals. All new frameworks operated by in-scope organisations, irrespective of the value of
the contract require an annual, published CRP. By 2027, this will expand to include ALL 15 areas of Scope 3 emissions, which cover indirect emissions across the entire supply chain. From 2030, suppliers will only be able to qualify for NHS contracts if they can demonstrate their progress through published progress reports and continued carbon emissions reporting. Product carbon footprinting: From April 2028, new requirements will be introduced overseeing the provision of carbon footprinting for individual products supplied to the NHS. Continued Net Zero and Social Value weightings:
All NHS procurements will continue to hold a minimum 10% weighting to net zero and social value to all tender evaluations.
UNDERSTANDING THE DIFFERENCE: CARBON REDUCTION PLANS (CRP) VS. CARBON FOOTPRINT REPORTING
One critical aspect of the Evergreen Assessment is understanding the distinction between a Carbon Reduction Plan (CRP) and Carbon Footprint Reporting.
1. Carbon Footprint Reporting Carbon footprinting incorporates the operational footprint of an organisations and its total amount of greenhouse gases emitted directly and/or indirectly from its operations. It captures the environmental impact of the day-to-day running of business functions. Understanding the organisations carbon footprint is the essential first step in understanding the businesses carbon output and key to allowing informed decision making on carbon reduction.
2. A Carbon Reduction Plan can be created once a solid foundation and understanding of the organisations footprint is completed. By understanding the business emissions correctly, active reduction planning can then begin.
To comply with the NHS requirements, the CRP should include:
• Confirm the bidding supplier’s commitment to achieve net zero by 2050 or earlier for their UK operations as a minimum geographical boundary. Note a global emissions boundary meets the requirements.
• Provide the supplier’s baseline and current emissions for the sources included in scope 1 and 2 of the GHG Protocol, and a defined subset of scope 3 emissions (at a minimum).
The five relevant GHG Protocol scope 3 categories are:
• Upstream transportation and distribution
• Waste generated in operations
• Business travel
• Employee commuting and homeworking
• Downstream transportation and distribution.
Additional CRP criteria:
• Provide emissions reporting in CO2e (carbon dioxide equivalent) for the seven greenhouse gases covered by the Kyoto Protocol (carbon dioxide [CO2], methane [CH4], nitrous oxide [N2O], hydrofluorocarbons [HFCs], perfluorocarbons [PFCs], sulphur hexafluoride [SF6] and nitrogen trifluoride [NF3]).
• Set out the environmental management measures in effect, including certification scheme or specific carbon reduction measures adopted; these should be measures the supplier can apply when performing the contract and support the supplier to achieve net zero by 2050 or earlier;
• 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 regularly – at least annually.
When producing a CRP, suppliers should follow the government’s Technical standard for completion of CRPs. Future Expansion: By 2027, CRPs will need to incorporate all 15 areas of Scope 3 emissions including product lifecycle, investments, franchises etc. Both CRP and Net Zero Commitments are fundamental to securing future contracts with the NHS and ensure your business is contributing to the Greener NHS initiative.
KEY CHALLENGES – AND HOW AUDITEL CAN HELP YOU OVERCOME THEM
1. Carbon Reporting, Reduction & Commitments.
• Challenge: As of 2024, suppliers should publish on their UK website, a CRP covering Scope 1, 2 and 3 (five subset) emissions and Net Zero Commitments. Non-compliance with these standards could disqualify you from NHS tenders.
• Auditel Solution: Auditel will work with your business to develop a robust CRP that ensures full compliance with NHS carbon reporting requirements to PPN06/21 standards (Scope 1, 2 & 3). We can also help you create our commitment and deliver the necessary requirements. We’ll help you measure and reduce your carbon footprint while optimising operational costs.
2. Navigating the Net Zero Journey by 2030
• Challenge: Failure to demonstrate clear, measurable progress towards net zero could disqualify both new and incumbent suppliers to NHS and NHSSC.
• Auditel Solution: Auditel specialises in creating custom roadmaps that not only help you achieve net zero but also improve efficiency, reduce waste, and cut costs in the process. Our expertise ensures that you stay ahead of NHS sustainability standards.
3. Net Zero and Social Value Contributions
• Challenge: Meeting the 10% net zero and social value weighting in NHS tenders is now a critical factor for winning contracts.
• Auditel Solution: Auditel can help you craft and implement net zero and social value initiatives that align with NHS priorities. Whether through fostering social equity, environmental sustainability and economic resilience, we ensure your business maximises its net zero and social value impact.
4. Ethical Supply Chains
• Challenge: Ensuring transparency across your supply chain is crucial to meeting the NHS’s ethical standards on issues such as modern slavery.
• Auditel Solution: We conduct supply chain audits to identify potential risks, and cost saving opportunities, helping your business maintain compliance and stay competitive in the NHS market.
THE FIVE SUPPLIER REQUIREMENTS
WHY AUDITEL?
With our combined expertise in cost management and sustainability consulting, Auditel is perfectly positioned to guide your business through the complexities of the NHS Evergreen Assessment and Greener NHS goals. We help future-proof your operations, turning compliance into an opportunity for long-term success within the NHS supply chain and advise on opportunities to reduce costs yourselves.
THE IMPACT OF NON-COMPLIANCE
Failure to meet the NHS Evergreen and Greener NHS standards could have significant consequences:
• Exclusion from future NHS contracts if requirements are not met.
• Loss of revenue for suppliers who fail to meet carbon footprint reporting and publish Carbon Reduction Plans annually..
CONCLUSION: ACT NOW TO PROTECT YOUR CONTRACTS
The NHS Evergreen Assessment and Greener NHS initiative present both a challenge and an opportunity for suppliers. Auditel provides the expertise and strategic support necessary to navigate these changes successfully, ensuring your business is compliant, sustainable, and positioned for long-term growth within the NHS supply chain. Partner with Auditel to stay ahead of the curve, secure your NHS contracts, and achieve success in a sustainable future.
