Contractual Emissions Reporting
Many commercial organisations have been asking their suppliers to report their greenhouse gas emissions and plans to reduce them for some time. In June 2021 the UK government issued a new Procurement Policy Note (PPN 06/21). It marked a distinct change in policy. Previously, suppliers were required to provide their Scope 1, direct emissions and Scope 2, indirect emissions, together with their associated reduction plans. PPN 06/21 now requires organisations to report not only Scopes 1 & 2, but also their emissions from six Scope 3 categories and the related carbon reduction plans. Scope 3 applies to indirect emissions occurring in the organisation’s value chain.
PPN 06/21 is a signal to commercial organisations, which will almost certainly follow suit. The categories in Scope 3 will become increasingly important in emissions reporting, as in some cases they can exceed the emissions from Scopes 1 & 2.
Scope 3 Categories included in PPN 06/21
In PPN 06/21 the government has chosen what it apparently believes are categories in its value chain that an organisation can have most influence over. These are:
Category 4 – Upstream transportation and distribution
Category 5 – Waste generated in operations
Category 6 – Business travel
Category 7 – Employee commuting
Category 9 – Downstream transportation and distribution
Currently PPN 06/21 only applies to contracts with an annual value of £5m and above. However, we expect that the requirement will soon be applied to contracts of lesser value. As stated above, other commercial organisations are likely to include these categories in their own supplier evaluation requests.
Plans to reduce the GHG Emissions from Employee Commuting must be dealt with carefully and sensitively. We address this issue in the section Carbon Reduction Plan of this Web site. GHGi Commuting offers users a particularly accurate method of recording and reporting emissions from commuting and homeworking. This is of particular importance when making plans relating to employee commuting.