New measures which require businesses bidding for major government contracts to commit to achieving net zero emissions are now in force.

The new rules, first announced in June earlier this year, mean that all companies bidding for government contracts worth more than £5m a year must commit to achieving Net Zero emissions by 2050. 

The requirements will apply to any companies bidding for government contracts worth more than £5m a year, not just those who are successful.

Steve Barclay, chancellor of the Duchy of Lancaster, said: “These new rules show our bold and ambitious agenda to achieve Net Zero by 2050, protecting ourselves and future generations. Government spends £290bn a year on procurement and it’s right that we use this spending power to green the economy. Working arm-in-arm with business, we are taking giant strides to ensure this country is building back greener and tackling climate change.”

The new requirements come into effect ahead of international climate conference COP26 which the UK will host later this year, with officials at the event working closely with climate experts and campaigners to encourage other countries to follow the UK’s example.

Andrew Griffith, UK Net Zero business COP26 champion, said: “The message to businesses is clear - engaging on net zero is no longer an option but a necessity from today, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts. As we prepare to host the UN COP26 Summit this is exactly the type of leadership and collaboration required from government and business to show the world that we are serious about investing in a greener, more prosperous future.”

Ministers say the new rules will drive forward the government’s green agenda while also striking a balance to not overly burden and potentially exclude small and medium sized enterprises (SMEs) from bidding for government work.

Tom Thackray, the CBI’s director of decarbonisation, said: “The scale and breadth of spend makes public sector procurement an essential tool in driving net zero progress across all sectors and regions of the country. This new policy will provide a sharp focal point for public-private partnerships. Responding to their customers and investors, businesses are eager to accelerate progress towards net zero as part of a broader sustainability agenda. Working with the public sector they can demonstrate their excellence and underline the world-leading progress many industries have already made.”

Mark Fox, chief executive of the BSA, said: “Achieving Net Zero means everyone – government, businesses, the VCSE sector and the public as a whole - working together as one. Harnessing the power of public procurement is one important tool at the government’s disposal. That’s why the BSA welcomes this move. We and our members contributed to the process of drawing it up. It is another important step on the road to Net Zero. We are pleased to see government, alongside business and the VCSE sector, taking a lead on this issue.”

The measures will apply to all central government departments as well as their executive agencies and non-departmental public bodies.