20 February 2023
It spends tens of £billions each year through its supply chain and is a key customer for 1000s of companies. It is therefore little surprise that the Government is using the NHS as a key lever in helping to achieve its net zero goal by mandating the requirement for suppliers to have in place a clearly articulated Carbon Reduction Plan (CRP).
An existential threat for some…
Our experience in talking to our customers to date is that those in sectors obviously aligned to healthcare such as pharmaceuticals and medical supplies are aware of and embracing the CRP requirement. But there are also many producers of non-health-specific products who also have NHS Trusts as major customers who are either unaware of the new requirement or are not addressing it with sufficient urgency. Failing to act quickly or thoroughly enough in developing their own Carbon Reduction Plans could face some businesses with an existential threat.
The NHS is ratcheting up the CRP and requirement for net zero targets over the next few years, but the direction of travel is clear, and the key deadline is probably that there are now only 13 months until a CRP will need to be in place for all procurements. The key elements of the roadmap are:
Net zero supplier roadmap
From April 2022: all NHS procurements have included a minimum 10% net zero and social value weighting. The net zero and social value guidance for NHS procurement teams will help unlock health-specific outcomes (building on PPN 06/20).
From April 2023: for all contracts above £5 million per annum, the NHS will require suppliers to publish a Carbon Reduction Plan for their UK Scope 1 and 2 emissions and a subset of scope 3 emissions as a minimum (aligning with PPN 06/21). The Carbon Reduction Plan (CRP) requirements for the procurement of NHS goods, services and works guidance outlines what will be required of suppliers and how it will be implemented.
From April 2024: the NHS will extend the requirement for a Carbon Reduction Plan to cover all procurements.
From April 2027: all suppliers will be required to publicly report targets, emissions and publish a Carbon Reduction Plan for global emissions aligned to the NHS net zero target, for all their Scope 1, 2 and 3 emissions.
From April 2028: new requirements will be introduced overseeing the provision of carbon foot printing for individual products supplied to the NHS. The NHS will work with suppliers and regulators to determine the scope and methodology.
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 through the Evergreen sustainable supplier assessment.
SMEs will have a further grace period of two years to achieve these objectives but given the ever-tightening of compliance requirements and a flow of new policy announcements, there would seem little if any benefit in not acting sooner rather than later.