Welsh Procurement Policy – Decarbonisation in the Public Sector

Earlier in December, the Welsh Government released a Procurement Policy Note (WPPN 12/21) to advise public sector bodies on ways to address CO2e emissions in their supply chains, in particular for purchased goods and services. The advice follows on from the UK PPN earlier this year Procurement - carbon reduction plans in the procurement sector introducing mandatory selection criteria in tender processes relating to carbon foot printing (PPN 06/21).

What is particularly interesting about this policy note is that it not only provides guidance in relation to future procurement exercises, but it also considers contracts which are already in place. Suggesting that they are reviewed to assess whether any existing decarbonisation measures which have been built into the contract are being fully applied or whether it may be possible to use commitments to Innovation or Continuous Improvement to initiate action.

If no such opportunities arise, the guidance even suggests considering early termination of the contract if better delivery options are available.

As part of the tender stage, this new policy note now places greater weight on suppliers to provide detailed carbon action plans as well as sustainable and energy-efficient methodologies, to reduce CO2e emissions.

The PPN further seeks to promote more sustainable and decarbonised practices throughout the procurement cycle with the overall goal to minimise or eliminate unsustainable activities or materials.

In particular, public bodies should:

  • At first instance, challenge the actual need for procurement and assess whether there are more efficient means of achieving the desired outcome
  • Consider the impact of CO2e emissions as part of the wider procurement process. This includes requiring any prospective bidders at tender stage to submit a Carbon Reduction Plan[1]
  • Ensure ongoing monitoring of the supply chain, up to and including KPI and supplier specific data assessments, monitor any CO2e emissions throughout the process
  • Provide that any procurement contractors achieve and adhere to carbon emissions standards or accreditations
  • Recognising that contractors may need to invest in their businesses to achieve carbon reduction, public bodies are encouraged to consider extending the maximum period of contracts to allow time to recoup the investment or providing bonus payment clauses for achieving key milestones

Key Practical Considerations

When considering their responsibilities in decarbonising the sector, public bodies should assess all stages of the procurement process, integrating low emissions strategies and methodologies within the organisation's own policies. Ongoing and targeted data collection of sources of CO2e emissions further allows for a proper assessment of inefficient practices and resources, in order to implement sustainability and net-zero initiatives.

At the outset of any procurement strategy, applicants for tender will now be under greater scrutiny to incorporate strategic carbon action proposals, which may act as a differentiator in public tender evaluations. Any successful party will need to ensure compliance with decarbonisation proposals, and to positively engage with the public body and any associated sustainability practices.

What does this mean for you?

WPPN 12/21 represents a significant commitment by the devolved administration to support the United Kingdom's target of achieving net zero by 2050, as well as reflecting the Welsh Government's commitment to achieve a carbon neutral public sector by 2030.

If you are in the public sector in Wales you should be reviewing your existing contracts to maximise the capacity already contained within them to reduce CO2e emissions and if there are no such obvious opportunities, check if there are other routes within the contract to apply pressure to achieve this aim. If not, consider whether it is feasible to terminate the contract and re-let the contract if that might achieve a significant reduction.

For future procurements, ensure that emissions reduction is at the centre of the entire process.

If you are a contractor, you should be checking for yourself whether your contracts included commitments which may have been enthusiastically offered at tender stage. Have you complied with those obligations and are you ready and able to be measured on them? If not, you might expect to come under pressure in the near future and may even find efforts are made to terminate contracts early, or at least that planned extensions to the contract term may not materialise.

You can get in touch with our experts on the details below If you'd like to discuss any of the above points further with us, or you need some advice on a procurement that you're involved in.

[1] WPPN 06/21 - Decarbonisation through procurement - Taking account of Carbon Reduction Plans

Key Contacts