Become a more sustainable supplier

Find out how to reduce your carbon emissions as a supplier so you can win contracts, be more attractive to customers and reduce climate related risks.

The benefits of becoming more sustainable

Many larger companies are now asking suppliers to adopt carbon reduction targets to cut their emissions. This is because an organisation’s suppliers account for up to 90% of a company’s total carbon emissions.

To win contracts, you may need to show proof that you are taking action to cut:

your own emissions (‘scope 1 and 2’ emissions)
emissions in your supply chain (‘scope 3’ emissions)

Reducing emissions will have a major benefit for the environment. It may also help you:

reduce costs
mitigate business risks
identify efficiencies and save money

For example, becoming more sustainable may reduce the risk of having to absorb increasing fuel and energy costs, or manage supply chain disruption.

Other benefits

Taking action to become more sustainable will allow you to:

protect your business against new rules and regulations
gain a competitive advantage over less-prepared businesses
engage and form partnerships with other forward-thinking businesses
improve your reputation and become attractive to new markets, employees and investors

What large businesses need from SMEs

Some larger businesses have a legal obligation to make formal commitments to track, disclose and reduce their carbon emissions.

This may mean that they ask for your contributions to their emissions as part of their supply chain.

Each business has its own set of standards for suppliers. You will need to check what it is your larger customers are asking for.

For example, Amazon and Unilever ask suppliers to:

set credible carbon reduction goals
track and report your carbon emissions

What the public sector needs from SMEs

If your company is bidding for larger UK government contracts (worth over £5 million a year), you may be asked to provide a Carbon Reduction Plan.

In your Carbon Reduction Plan (CRP) you will need to:

make a formal commitment to achieving net zero emissions by 2050 or earlier
publish a link to your latest CRP on your website (it is good practice to keep previous CRPs on your website so that your progress can be monitored)
record your emissions for scope 1, scope 2 and the required categories in scope 3
outline the steps you plan to take to reduce your emissions over time

Even for lower value contracts, public sector organisations can ask for a formal commitment.

For example, from April 2024, all NHS suppliers must publish a CRP or have a commitment to reducing their emissions to net zero when bidding for new procurements.

You might not be eligible to bid for some of these procurement opportunities if you fail to make a commitment or publish your plan.

Selling to businesses in other countries

You’ll need to check international regulations if you provide services to businesses outside of the UK.

For example, larger businesses in the European Union (EU) must report their emissions in a standard digital format every year. SMEs in the EU will be expected to do this from 2028.

The International Sustainability Standards Board (ISSB) has also announced a set of common reporting standards for the global capital market. While they’re not yet mandatory in most countries, this will increase the demand for greener supply chains across the world.

How to prepare

1. Set a target and make it public

Many large companies now ask suppliers for a public statement showing your commitment to reduce emissions and reach net zero.

One way to do this is to make the SME Climate Commitment.

This is an internationally recognised public commitment you can make to:

halve your business emissions by 2030
reach net zero emissions by 2050
report yearly on progress towards these goals

2. Measure your emissions

Large companies often share energy use and carbon emissions information in their annual reports. Providing data showing your carbon emissions will make it easier for them to work with you.

Find out how to measure your carbon emissions.

3. Make a plan

Start with emissions you can control in the workplace (scope 1) and your energy supply (scope 2).

Choose the right measures based on your type of business and how much you can afford to invest.

For example, you could:

switch to renewable energy
use electric vehicles
reduce your commercial building and home energy use
reduce waste and recycle more
involve your team

Find out more about:

4. Reduce emissions from your supply chain

Engage with other businesses and see what measures you can take to reduce emissions in your supply chain (scope 3 emissions).

You can do this by:

sourcing products and services from green suppliers
selling lower carbon and ‘circular’ products
developing new products or services to generate positive environmental impact

5. Show your progress

Once you’ve started to reduce your emissions, share your progress with your customers and suppliers.

Use GOV.UK’s Carbon Reduction Plan template to help you decide what to include.

For example, you can include your progress on reducing emissions from things such as:

vehicles
heating, cooling, lighting and electricity
other ‘indirect’ emissions, such as transportation and distribution of goods and services to and from your business

You can also sign up for Crown Commercial Service’s free online course ‘Producing your Carbon Reduction Plan’.

Find out more about how to track and share your progress.