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Sustainability has become a top topic to address in the last few years, both for businesses and individuals. In fact, 90% of business leaders think sustainability is important, but only 60% actually have a sustainability Strategy.

The demand for tangible action is becoming more pressing as we inch close to the 2030 milestone of the Paris Agreement.

To encourage action from businesses, we’re seeing more public and private sector contracts include a tendering requirement to show your commitment to sustainability. One such example is the need for a PPN 06/21 Carbon Reduction Plan.

In this weeks’ episode David Algar, Principal Carbonologist® at Carbonology, joins Mel to explain how to create a Carbon Reduction Plan, shares some top tips on presentation and how Carbonology® can support you.

You’ll learn

  • How to create a Carbon Reduction Plan
  • How Carbonology® can help you align that plan with ISO 14064 and PAS 2060
  • Addressing difficult tendering questions
  • How to best present your Carbon Reduction Plan

Resources

In this episode, we talk about:

[00:24] What are PPN 06/21 Carbon Reduction Plans? – Go back and listen to our previous episode to learn more.  

[00:42] Episode Summary – Today we’ll be talking about how to create a Carbon Reduction Plan (CRP), how to deal with difficult tendering questions and the best ways in which to present your CRP.   

[02:46]  How do you actually calculate the emissions? We have gone into this in a lot more detail on a previous episode, but to summarise:-

Emissions are calculated by taking your activity data, such as kWh of electricity, or miles driven in a vehicle, and multiplying it by an emission conversion factor.

Specific emission conversion factors are available from DEFRA for specific activity data, they are also year-specific.

The hard part is sourcing your activity data, accounting for missing information, performing estimates, and ensuring the overall methodology is accurate.

This is all done in alignment with ISO1464-1, as well as the PPN guidelines, so one of the very first things we’ll do with you is define your organisational and reporting boundaries,

[05:27] How can a business set carbon reduction targets and forecast emissions? This is tricky as it involves trying to predict the future, not just in the short term, but potentially several decades ahead depending on your goal.

The good thing is you know the end destination of your carbon pathway: little to no emissions by 2050.

Using this and some simple maths you can at least map out where you should be each year when moving forward from the base year, the base year being the period you use to compare future results against.

Usually the base year is the first year you complete calculations, but this can change over time. We’re finding some clients are opting to change their base year to account for the disruption of COVID-19 on operations

[06:40] How do you actually set the targets?: When we look at target setting and emission forecasts we generally take 2 approaches:

Milestones:

  • The first, and our most common approach, is about setting milestones based on specific carbon reduction initiatives the business can implement, at specific dates.
  • For instance, all company vehicles being hybrid by 2025 and fully EV by 2035? Or what if we phased out gas by a certain date? Or cut out all single use plastics?
  • Using this milestone method for the forecasting can be tricky, but you can end up with a carbon pathway that is more representative of real life. 

Straight line method:

  • The second is what we refer to as the ‘straight line’ method. This is a simpler approach that involves doing some simple maths to plan out your carbon targets for each year, without factoring in specific milestones or events.
  • We refer to this unofficially as the ‘straight line’ method as the graph showing your carbon pathway is pretty much a straight line from your base year towards net zero, using the milestones method gives a ’bumpy’ line due to the influence of specific milestones at specific years.

[08:35] A tip for setting targets for the first time is by thinking ‘what if? This is essentially looking at the thing you’re doing now and replacing it with a more sustainable alternative. For instance, calculating what your business travel emissions would be last year if they were all completed in hybrids, or if domestic flights were replaced by train journeys.

Doing these ‘what if?’ calculations is a bit hypothetical as operations are likely to change over the years, but it still helps give you a specific target to aim for a specific GHG sources.

[10:40] How can you influence carbon reduction in areas where you have no direct control? Some areas will be out of your control, for instance if you ship goods in from around the world you can’t necessarily decide how they get to you, or if they are transported via more sustainable transport.

  • One thing you can do is aim to set a good example yourself as a business
  • You could also adopt the PPN framework yourself and request it from anyone that is aiming to win your business
  • Another quick win is actually speaking to your suppliers. If you use a local delivery firm you could speak to them about their plans for an electric fleet, or more sustainable packaging. Or if you use a data centre, you could enquire about if is run on renewable energy sources

[13:15] But what if we are planning to grow as a business? Results are expected to fluctuate over time, so if they go up after the base year this shouldn’t impact your success or failure in your tender submission. The aim is obviously to decrease on average over time

If you know for certain that they will increase in the next few years, for instance through opening new sites, making acquisitions, or just natural growth, that’s ok.

You could pick a new base year if operations significantly change as this will give a more realistic figure to work down from. You can also use this as an opportunity to evidence efficiency improvements through intensity metrics, such as your tonnes of carbon per employee, or relative to your revenue.

 [15:15] In what other ways can Carbonology help to support you? – Once everyone is happy with the CRP, you’ll then have to actually use it in tenders. The fun thing about tenders is that they can all ask different questions, despite PPN having technical requirements, so you can’t always have the information to hand before submitting one.

We can’t write your tender submissions for you, but we can provide guidance and pull out the necessary figures if requested, for instance if you need certain numbers to support with your Social Value Model reporting.

[16:20] How can this help on your journey to Carbon Neutrality? –  If you’ve gone through all the hard work to create a PPN 06/21 Carbon Reduction Plan, you’ll be in the ideal position to achieve carbon neutrality of your operations via PAS 2060.

The next step would be creating a PAS 2060 Qualifying Explanatory Statement, or QES, which details how you have achieved carbon neutrality through offsetting, and your commitment to maintain this for future reporting periods.

[17:25] Where does the verification come into play? If you’ve already calculated your emissions you may be asked to have them independently verified by an independent third party.

We’ve recently developed a process so we can check over you GHG calculations, policies, procedure and overall alignment with the standard.

As part of this, Carbonology can provide a verification report with all findings and opportunities for improvement, as a well as a verification statement to show you have had emission independently verified in alignment with ISO 14064.

For further information, David has prepared a quick guide for creating your PPN 06/21 Carbon Reduction Plan. Download it from the resources area above.

Lastly, if you have an questions or would like to learn more about how Carbonology can help you, feel free to book a call in via David’s Calendly.

We’d love to hear your views and comments about the ISO Show, here’s how:

  • Share the ISO Show on Twitter or Linkedin
  • Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.

Subscribe to keep up-to-date with our latest episode’s:

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Sustainability has become one of the main focal points for businesses to address in the last few years, and for good reason! We’re already seeing the devastating effects of simply doing nothing in the form of more extreme weather, occurring much more frequently in areas not equip to handle it.

To encourage action from businesses, we’re seeing more public and private sector contracts include a tendering requirement to show your commitment to sustainability. One such example is the need for a PPN 06/21 Carbon Reduction Plan.

In this weeks’ episode David Algar, Principal Carbonologist at Carbonology, joins Mel to explain exactly what PPN 06/21 Carbon Reduction Plans are, what the requirements mean in practice and the consequences if a business does not meet the requirements.

You’ll learn

  • What are PPN 06/21 Carbon Reduction Plans?
  • What the requirements mean in practice
  • Benefits to a business
  • What if a business does not meet the requirements?

Resources

In this episode, we talk about:

[00:42] Episode Summary – We’re talking about PPN 06/21 Carbon Reduction Plans because there is a government requirement to submit one. This episode will cover the what and why, in part 2 we’ll go into more detail about how to create a Carbon Reduction Plan.   

[02:10]  What is a PPN 06/21 Carbon Reduction Plan? Procurement Policy Note 06/21 was introduced back in June 2021, hence the 06/21 part, and is a tendering requirement for companies looking to win contracts in the public sector that links to the Government’s Net Zero target.

[02:28] What is the UK government’s Net Zero target? The ‘net zero target’ refers to a government commitment to ensure the UK reduces its emissions by 100% from 1990 levels by 2050.  

[02:55] Who does PPN apply to?: Public sector, so any businesses that works with education, local authorities, housing, infrastructure, defence, transit, and of course, the NHS who have set a goal of Net Zero by 2040.

Officially this is for contracts that are valued at £5M or more, but in April 2024 the NHS will be requesting a Carbon Reduction Plan for all procurement.

Unofficially, this framework could be adopted by any business, so even if you don’t deal directly with the public sector, or are a subcontractor, your supply chain may soon be requesting a Carbon Reduction Plan!

[04:05] Why do you need a Carbon Reduction Plan? Although the Government’s targets and policies around Net Zero keep changing, the overall goal of PPN 06/21 is to encourage businesses to reach Net Zero before 2050, come up with a plan to do so, and implement emission reduction initiatives in the delivery of Government contracts.

[04:35] From a businesses perspective, what are the main benefits? There are 2 main benefits:

  • It’s essential for some tendering, with as much as a 10% weighting based on your carbon management and social values. Put simply, if you don’t produce one when needed, you may fail the tender requirements and probably won’t make the sale.
  • The second main benefit is that this isn’t just a piece of paper with a graph on it, it’s a great opportunity to investigate your business’ GHG emissions, and put a plan in place to reduce them. This also helps you show to stakeholders that you are actually committed to environmental protection and could identify some cost savings in your business after going through all the data.
  • It’s also a great addition to any existing ISO 14001 or ISO 50001 Management Systems!

[06:10] What are the key requirements of PPN 06/21? –    Firstly you’ll need to make a commitment to achieving net zero by 2050 at the latest. This includes annually calculating your emissions and updating the Carbon Reduction Plan.

Next you’ll need to report on a minimum set of GHG categories: 100% of your Scope 1 emissions, so direct emission from company vehicles, gas heating (so stuff you burn) and any fugitive emissions, which are leaks from HVAC systems for most businesses. 100% of your Scope 2 emissions which is electricity most of the time but can also refer to steam you import from an external source.

You’ll also need to report on 5 Scope 3 categories, these are your indirect emissions:

  • Waste generated in operations
  • Business travel in vehicles you don’t own, so staff cars, flights, trains, etc
  • Commuting, so staff traveling to and from work, being careful not to double count business travel not already claimed under expenses
  • And arguably the most complicated, upstream and downstream transportation, i.e. goods in, and goods out – physical transport of goods

[09:50] Are there any other categories covered by scope 3 that we should consider? –  Generally, when we produce a CRP for our clients, we’ll look at a few extra Scope 3 categories such as water, homeworking, or purchased goods, so carbon reduction planning can extend to other elements of the business. In all cases you’ll need to report in tonnes of carbon dioxide equivalent, or tCO2e, as this accounts for the global warming potential of multiple GHGs.

[11:30] Are there any ISO standards that you can align the Carbon Reduction Plan to? Yes! At Carbonology, we use ISO 14064-1. This sets out a series requirements and guiding principles for the quantification and reporting of emissions. We wouldn’t necessarily have to go all the way to meeting every single requirement of the standard for your CRP but we always align with the key requirement of the standard when completing a CRP.

And if you’re lucky we’ll also cover your SECR figures!

[12:05] What is SECR? –  Streamlined Energy and Carbon Reporting. This is mandatory reporting for businesses that are defined as large, so 250+ staff, and 36M turnover or 18M on the balance sheet.

[18:20] Asset Management –  In 8.2 there is a consideration for Asset Management on your side. You should take care of any assets relating to the customer, where it’s stored and how it’s being looked after.

Standards such as ISO 27001 (Information Security) and ISO 55001 (Asset Management) already have some considerations for this.

[13:30] You’ve calculated your GHG results, what’s next?-  Once you’ve calculated emission from the required sources, you’ll then need to look at the carbon reduction side of your Carbon Reduction Plan.

To start with you’ll need to outline existing initiatives you have, for instance, a sustainable travel policy, EV charging on site or a hybrid working model. It’s really important that these are relevant to the delivery of the contract you are trying to secure.

Next, you’ll need to outline planned future initiatives, but bear in mind, these will need to be realistic and relevant, so no wild claims about buying an EV fleet or going zero waste next week!

Once you’ve done all this you can then start looking at carbon reduction forecasts and what the numbers might look like between now and 2050 (or you chosen date.

[15:10] Additional PPN 06/21 tips from David:  It will need to be signed off by a director, or equivalent, at your business to demonstrate leadership commitment. If the document isn’t signed off on you may fail on the tender.

You’ll need to publish it on your website, making it easy to access. Simple solution to this is just add a link at the bottom of your landing page.

And finally, you’ll need to make sure this is kept up to date each year. Reporting for emissions occurs on a 12 monthly basis. This can either be calendar year or your financial year, but ideally, you’ll want to publish the updated version as soon as you can after the year-end, certainly no longer than 6 months after.

[16:40] What does a Carbon Reduction Plan look like? – When the government announced this requirement, they also released a template document that businesses can complete. This is to simplify the process for businesses that are reporting on emission for the first time, but more importantly it standardises reporting. However, the template is a bit basic!

You’re not marked on presentation, but you can dress it up a little as long as you don’t deviate from the template too much. So feel free to put come company branding on it, make a cover page, change the font, etc.

You could also make a ‘full’ version of your CRP that includes further details on boundaries, methodologies and results, just make sure you only submit the template version to tenders.

[19:10] What happens if you don’t meet the requirements? – If you don’t meet the requirements without a valid reason, chances are you’ll fail the selection criteria. The selection criteria is a bit like the marking scheme associated with PPN. We can’t say for a fact that this means you’ll subsequently fail the tender, but it will certainly have a negative impact.

For further information, David has prepared a quick guide for creating your PPN 06/21 Carbon Reduction Plan. Feel free to download it below.

Lastly, if you have an questions or would like to learn more about how Carbonology can help you, feel free to book a call in via David’s Calendly.

We’d love to hear your views and comments about the ISO Show, here’s how:

  • Share the ISO Show on Twitter or Linkedin
  • Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.

Subscribe to keep up-to-date with our latest episode’s

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