What Is a Carbon Reduction Plan?

A Carbon Reduction Plan is a document that sets out your business's current greenhouse gas emissions and what you are doing to reduce them. If you supply into companies that bid for government contracts, you have probably been asked for one. Here is what it is, what goes in it, and how to write one.

Why Carbon Reduction Plans exist

CRPs became mandatory for central government contracts over £5m through PPN 06/21 in September 2021. The requirement sits at the selection stage, before bids are even evaluated. Companies without a published CRP are excluded outright.

That requirement has cascaded through supply chains. Companies that need CRPs for their own bids now ask their suppliers for the same data. Even if your business never bids for a government contract, your customers might, and they need your carbon information to complete their own plans.

Beyond government requirements, having a CRP is increasingly seen as a marker of business maturity. It shows customers and procurement teams that you understand your environmental impact and have a plan to address it. For tenders where sustainability carries scoring weight, a well-prepared CRP can directly win you points.

What goes in a Carbon Reduction Plan

The government provides a standard template, but you can use your own format as long as it covers the required elements. The key sections are:

Commitment statement: A clear statement committing your business to achieving net zero greenhouse gas emissions by 2050 at the latest. Some businesses set earlier targets. The commitment must be genuine and published.

Baseline emissions: Your greenhouse gas emissions for a specific baseline year. This should include Scope 1 (direct emissions from gas, vehicles, refrigerants, processes), Scope 2 (purchased electricity), and a subset of Scope 3 (typically business travel, employee commuting, and upstream transport). The baseline year is usually the most recent complete financial year for which you have data.

Current emissions: If different from the baseline (for example, if your baseline is 2022 and you are writing the plan in 2026), include your most recent emissions figures to show the trajectory.

Reduction targets: Specific, time-bound targets for reducing emissions. "We aim to reduce Scope 1 and 2 emissions by 30% by 2030 from a 2024 baseline" is a good target. "We will try to be more sustainable" is not.

Carbon reduction actions: What you are doing or planning to do to reduce emissions. Be specific. "Switching company vehicles to electric by 2028" is better than "exploring fleet options." Include actions already completed as well as planned ones.

Progress tracking: How you measure and report on your progress. This might be an annual carbon recalculation, quarterly energy reviews, or reporting through a platform.

How to calculate your emissions

Scope 1 and 2 calculations are based on activity data multiplied by emission factors. The UK government publishes conversion factors annually through DEFRA. The process is: collect 12 months of utility bills (gas and electricity), fuel receipts (company vehicles, machinery), and any other direct emission sources. Multiply each by the relevant DEFRA conversion factor. Sum the results.

For most SMEs, this is a spreadsheet exercise. You do not need specialist software. You need your invoices and the conversion factor table, which is freely available on the government website.

Scope 3 is harder because it covers a much wider range of activities. For a CRP, you only need a subset. Business travel (flights, train, taxi), employee commuting (estimated from home-to-work distances), and upstream transport (how goods get to you) are the most commonly included categories.

How long should a CRP be?

For a small business, two to four pages is usually sufficient. Quality of data and specificity of targets matter far more than length. A two-page CRP with measured emissions, clear targets, and specific actions will be taken more seriously than a ten-page document full of vague commitments and estimated numbers.

How often should you update it?

Annually at minimum. Your baseline stays the same (that is your reference point), but current emissions, targets, and actions should be updated each year to show progress. Publish the updated version on your website and keep previous versions accessible for comparison.

Getting help

We build Carbon Reduction Plans as part of our consultancy work. Our discovery session gives you the baseline data and a method statement. From there, drafting the CRP itself is a focused piece of work that most businesses can complete within a week. If you want us to write it for you, that is included in our Virtual Impact Team hours. Get in touch for current pricing.