On 5 June, the Cabinet Office published PPN 06/21, which linked carbon reduction plans to the procurement of Government contracts for the first time.
Any supplier wanting to bid for a Government contract must provide a carbon reduction plan confirming their commitment to achieving net zero by 2050 in the UK.
Not on the Government roster? Don’t pitch for work at that value? Doesn’t matter. This is likely to soon be a requirement from every type of client.
Agencies that are run as sustainable businesses will have already responded to the climate emergency, understanding the planetary case for change presented by people inside and outside their organisation.
Now the commercial facts are front and centre: clients will require agencies to be taking action before being considered for work.
The Government has started at a £5m budget level, but that will reduce.
In a separate initiative that launched globally in September 2020, Ericsson, Ikea, BT, Telia Company and Unilever were among founding partners to launch the SME Climate Hub to help SMEs – including those in their supply chains – to decarbonise. Packed with free tools and advice, this was launched in the UK by the Prime Minister on 28 May as a precursor to the Government's procurement news.
So the question is not whether to create a net zero plan, but how to create one. The Government’s new rules require businesses to report on both their direct emissions (scopes 1 and 2) and some of their value chain or Scope 3 emissions, including emissions from business travel, employee commuting, transportation, distribution and waste.
As service-based organisations, agencies will quickly realise that the majority of their emissions come from their banking, pensions and – via their value chain – their clients.
It means the decision of what to include in targets and reporting beyond the basic requirements is firmly linked to company values and strategy.
It is interesting to note that, while many agencies allowed their teams to march in support of the climate emergency in summer 2019, very few committed to disclose the sectors they were working in as part of the Creative Climate Disclosure.
The PR sector is brilliant at tackling challenges on behalf of clients, turning the impossible into the everyday. Now agency leaders must use these skills to think differently and cut carbon emissions across every aspect of their own business.
Even if they don’t care, future contracts will demand it.
Amanda Powell-Smith is chief executive of Forster Communications