The council is introducing procurement emissions standards that will be embedded into the evaluation of suppliers through its procurement processes and the resulting contracts.
It comes after the council approved its Zero Carbon Plan in September.
The council has sent a briefing to prospective contractors outlining its new guidelines.
"Emissions reduction targets will be embedded into evaluation criteria," the briefing said.
"There will be a focus on how emissions reductions can be achieved through the delivery of the contract and the suppliers’ commitments to reducing emissions.
Under the proposed guidelines, the contractor would have done a carbon footprint assessment of itself, and have an emissions reduction target and a plan to achieve it.
It is proposed contractors also must show emissions reductions have already been achieved from baseline.
"The changes we are making to the way we procure goods and services will help Dunedin continue to be a liveable city with thriving communities."
A council spokeswoman said there would be a focus on how a supplier will reduce emissions, and by how much, in areas that are relevant to the contract.
This might be things like what percentage of their fleet’s vehicles are electric, or how much of their stationary energy is made up of electricity or other types of renewable energy, she said.
"They would also have to show how much a supplier would adapt their methodology or approach to deliver the contract to enable emissions reduction or avoidance.
"This might be the way they create energy efficiency, propose alternative lower carbon, material options, or freight methods."
The briefing said agriculture (46%) and transport (34%) made up the bulk of Dunedin’s emissions.
Contractors would have to show how they would reduce the vehicle emissions fleet for light vehicles, trucks and utility vehicles in order to get their tenders accepted.
Air travel could also be curtailed to zero for contractors unless they could show services could not practically be completed remotely, and the relevant personnel were based outside of the Otago region.
The Otago Daily Times contacted several contractors, most of whom expressed support for the proposals.
A Citycare Water spokesman said: "like DCC, Citycare Water is also on a sustainability journey, which we are making good progress on".
"We too look forward to working with our partners and suppliers to make a meaningful sustainability difference".
Downer NZ country lead Craig West was also supportive.
"The council has been very proactive in early engagement with the wider market, including Downer, throughout the development of their updated policy.
"We have an ambitious net zero target aligned with the science-based target initiative, and we have a decarbonisation plan that encompasses our direct emissions throughout our operations and supply chain. Collaboration across our sector is crucial to delivering towards these goals."
A council spokeswoman said: "it is important to note that emissions standards are just one criteria we look at when evaluating tenders".