1
Contractual Emissions Reporting
Many commercial organisations are now asking their suppliers to report more than just their Scope 1, and Scope 2, indirect greenhouse gas emissions. They now require Scope 3, indirect emissions occurring in the organisation’s value chain, to be reported. They also require details of how theses will be reduced. This change in contractual emissions reporting has to a greater extent been prompted the UK government's Procurement Policy Note (PPN 06/21), in June 2021. That marked a distinct change in policy. PPN 06/21 requires organisations to report their Scopes 1 & 2, their emissions from six Scope 3 categories and a carbon reduction plan addressing them all.
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PPN 06/21 was a signal to commercial organisations, many of which have followed suit. The various categories in Scope 3 will become increasingly important in emissions reporting, as for many, they can exceed the emissions from Scopes 1 & 2.
2
Scope 3 Categories included in PPN 06/21
In PPN 06/21 the government has chosen what it apparently believes are most relevant Scope 3 categories and those 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.