New NHS England net zero requirements mark significant step-up for suppliers

The long-awaited guidance follows a market sounding survey conducted last year to engage NHS suppliers and trade bodies on how to meet enhanced targets in line with the healthcare provider’s net zero ambitions.

Since April 2023, the NHS net zero roadmap has required large suppliers of any new NHS England contracts above £5 million to publish CRPs. In April 2024, this requirement was proportionately extended to cover all new procurements.

However, from April 2027 all suppliers will be required to publicly report targets, emissions and publish a carbon reduction plan for all of their Scope 1, 2 and 3 emissions.

The latest guidance, which is informed by the survey, outlines the steps suppliers should take to align to the increased requirements from April 2027 for the procurement of goods, services and works across NHS England facilities.

The survey engaged suppliers on a suite of proposed requirements, some of which were confirmed by NHS England and others which were scaled back. Notable uplifts to the existing reporting requirements include expanding the reporting boundary to capture global emissions rather than merely UK emissions and requiring suppliers to report on all relevant categories of value chain emissions. Previously it was only mandatory for suppliers to report on a subset of Scope 3 emissions as a minimum.

However, the guidance reveals that NHS England has relaxed its position for suppliers on net-zero target dates, target validation and carbon offsetting disclosures. While NHS England has set a 2045 target date for its own supply chain emissions, suppliers will now only be encouraged to meet that target date and required to commit to a later 2050 target date.

To reduce the potential cost burden on suppliers, independent validation of targets will not be required, although it will still be encouraged. Suppliers will no longer be obliged to estimate future offsetting when disclosing targets. 

James Hay, climate and sustainability expert at Pinsent Masons, said the guidance demonstrated the “proportionate” approach taken by the healthcare provider to help suppliers adapt to the heightened requirements. “NHS England has decided to roll out the new reporting requirements in a proportionate manner in that they will only apply to new procurements after 1 April 2027 with a contract value of £5m per annum and above – including VAT – and all new framework contracts where proportionate,” he said.

However, he urged suppliers in scope of the 2027 requirements to start preparing for full Scope 3 emissions reporting in respect of the global value chain. “Many large suppliers may already be obliged under other climate reporting requirements in the UK or elsewhere to publish equivalent disclosures,” he said. “For those new to this level of carbon accounting, the 2027 requirements represent a significant step-up in data gathering, management and calculation practices.” 

NHS England said the guidance was intended to be used in conjunction with central government’s policy note on CRPs for organisations engaged in the procurement of major central government contracts.

NHS England is expected to carry out a similar market engagement exercise for the 2028 product carbon footprint requirements. However, Hay warned that product-level data disclosure should not be viewed as a separate and future reporting challenge given the links between corporate value chain emissions and product life-cycle emissions, which should also be factored into implementation plans.

Hay added: “Since product-level disclosures are not currently required under corporate climate disclosure requirements in the UK, EU or elsewhere, even those companies well-versed in Scope 3 emissions reporting are likely to find product-level reporting requires re-tooling reporting processes, engaging with suppliers on product processes and allocating carbon inventories to individual product lines.”