The CO₂ Performance Ladder has been updated: how to make the most of version 4.0
With the recent update to the CO₂ Performance Ladder guide, now is the perfect time for companies to adopt one of Europe’s most promising tools for sustainable procurement. The Ladder was originally developed in the Netherlands and is now also actively used in Belgium. It is gaining popularity as a standardised tool for CO₂ reduction in procurement processes across Europe. The Ladder is increasingly being adopted in countries such as Germany and Ireland, where public authorities and major clients are increasingly integrating the framework into public tenders. Today, more than 8,000 companies are certified under the Ladder system, and 300 procurement services use the system to offer ‘virtual discounts’ during the procurement process. Certified companies receive a notional price reduction in public tenders linked to their level within the system, thereby increasing their chances of winning contracts without having to lower their actual bid.
In January 2025, SKAO published the latest version of the guide: version 4.0. This version aims to give the framework a new structure, with a greater focus on long-term strategies and alignment with other relevant frameworks in the sustainability market (the CSRD, Science-based Targets Initiative, etc.). In this blog post, Encon aims to provide an overview of the key elements to consider in light of this exciting change!
From 5 levels to 3
In version 3.1 of the guide, SKAO defined five maturity levels at which a company could be certified. Depending on certain requirements, the company could progress through these five levels, with level 5 being the most ambitious. With the introduction of the v 4.0 guide, the five levels have been reduced to just two, with the introduction of a third level enabling companies to take even more ambitious steps towards CO2 neutrality. The guides are now divided into these five levels and each consists of two parts:
- Part I: a general section setting out the general requirements that a company’s CO2 policy must meet before certification can take place. These general requirements apply to all levels.
- Part II: the requirements relating to understanding, reduction, communication and participation, which become more ambitious as the level increases. This section varies by guide (and therefore by level).
A phased implementation of the new manual
In general, from July 2025, companies will be able to choose whether to seek certification under the old or the new manual, whilst procurement will be able to use the new manual from 2026. This gives companies sufficient time to prepare for the new approach and allows new certification bodies to choose which manual they wish to follow. After January 2027, companies will no longer be able to use certifications obtained under version 3.1 of the guidelines.
Focus from short-term to long-term
In the new manual, commitments to full climate neutrality by 2050 are permitted at level 3. The manual achieves this by dividing ambitions (and the requirements linked to these ambitions) into three different time horizons:
- Short-term, from 1 to 3 years after certification
- Short-term, from 5 to 10 years after certification
- Long-term, up to 2050 and in line with short-term ambitions.
Depending on the level, the focus will be placed more on one of the time horizons. Depending on the time horizons, the requirements of a company’s CO2 policy will change.
Focus on CO2 and energy
The v4.0 Guide requires companies to take a broader view of the subject of CO2, including requirements relating to a company’s energy consumption. A company must set targets for both CO2 reduction and energy savings. This is usually done by aligning the CO2 policy with the ISO 50001 framework and by drawing up an energy balance alongside a carbon footprint.
More flexible assessment and audit
Manual v4.0 does not apply the same assessment per requirement as Manual v3.1. The audit is conducted more flexibly, in consultation with the auditor and the organisation. Proportional assessment is permitted, whilst maintaining a level of assurance within the minimum permitted assessment. To be certified at a particular level, companies must:
- Comply with all requirements in “Part 1” of the CO2 Performance Ladder guidelines
- Comply with the following requirements for “Part 2”:
a) Minimum requirements for all levels and perspectives of the lower levels, i.e.: Achieve at least 7 out of 10 points per requirement
b) Achieve an average of at least 90% of the points per perspective for all requirements
A more pragmatic approach
The new manual attempts to address some concerns raised by the previous manual, specifically regarding the link with other frameworks and certain pragmatic objections to specific requirements. Some elements we would like to highlight:
- Introduction of key figures: key figures within the organisation who implement the system across the entire organisation are defined and, according to the new guide, must be supported in their work. Requirements are linked to these elements.
- Data quality becomes a key element of the CO2 policy. This helps the key figures described above to accurately assess the organisation’s CO2 impact and energy consumption.
- Documentation of legal and financial obligations regarding sustainability: The manual asks companies to be aware of how CO2 reduction can assist them with other financial and legal obligations, thereby strengthening internal support for the system.
- Guided process for mapping the value chain: Mapping the value chain and its impact is now supported by a clear, step-by-step process. This ensures that only the most important value chains are retained.
- (General) annual reporting: The half-yearly reporting of a number of indicators has been discontinued in the new version, reducing the workload for the organisation in accurately assessing certain indicators several times a year.
- Compliance with the GHG Protocol: To enable the CO₂ footprint within the CO₂ Performance Ladder framework to be used across more frameworks, the CO₂ Performance Ladder has been fully aligned with the calculations according to the GHG Protocol. This simplifies the calculations and reduces the workload associated with implementation.
- Participation in relation to knowledge requirements: Participation in sector initiatives is now aligned with the knowledge the certification body seeks to acquire. Only sector initiatives that can provide relevant knowledge are required to participate.
Conclusion
The introduction of the new manual heralds a new era for the CO2 Performance Ladder. As the Performance Ladder spreads across Europe, the system continues to evolve towards a more pragmatic approach, whilst also providing a robust means of reducing CO2 emissions. Companies will experience the added value of their reductions and their ambitions more directly through the benefits this brings in procurement, thereby further supporting meaningful changes within certified companies and making a case for greater maturity in CO2 management. An overview and summary of the requirements per level is shown in the figure below.
With the new guide, companies can set more ambitious targets than before, whilst also starting from a stronger foundation thanks to the requirements set out at Level 1. At Encon, we continue to support and monitor the CO2 Performance Ladder system, actively work towards certification with our clients, and promote the new guide as a way for our new clients to go further, thanks to its pragmatic and more straightforward approach.
Dieter Thoelen
Manager Carbon Strategies Encon