Environmental performance

In 2019, we introduced a new approach to measuring and assessing our environmental performance, using the SDA (Sectoral Decarbonsiation Approach) methodology to set ourselves a number of new environmental targets or key performance indicators, alongside some more traditional environmental targets or key performance indicators (together, the ‘KPIs’).

The SDA methodology is the only approach with transport sector-specific metrics, using climate science to enable organisations to set targets relevant to their industry. We set new SDA KPIs on traction energy usage, traction carbon emissions and total (scope 1 & 2) carbon emissions which meet the 2018 Intergovernmental Panel on Climate Change (IPCC) goal of controlling the increase in global warming to below 2° Celsius (2DS). We aim to achieve these SDA KPIs over an initial seven year performance period – 2019 to 2025 – from a 2018 baseline. This science-driven approach creates absolute KPIs, and places more importance on achieving the them by the end of the performance period rather than year-on-year progress. The intention is for the SDA KPIs to be reviewed regularly as climate science, technology and forecasting methods improve. We are already considering our level of ambition and will be reviewing a move to 1.5° Celsius (1.5DS) targets in advance of the end of the current seven year performance period. We also set more traditional KPIs on site (scope 1 & 2) emissions, landfilled waste disposal and water usage, which we also aim to achieve over the same seven year performance period and represent a stretch from our 2018 baseline performance.

The global pandemic in 2020 had a significant impact on all aspects of our business, including our carbon emissions and trajectory towards the new Group environmental KPIs, as well as the environmental performance measures included in the 2020 LTIP awards:

• the significant reduction in mobility across the world means that our absolute emissions declined, reducing by 33% in 2020 (see table by division); but
• materially decreased load factors (intensity table shows passenger km reduced by 47%) has driven increases in intensity metrics with tCO2e/mpkm increasing 16% since last year.

Given the long-term nature of the environmental targets (2025 for the Group KPIs and 2023 for the 2020 LTIP awards) there is ample time for a correction as the business profile returns to pre-Covid pandemic levels, and our continued investment in low carbon fleet should drive an improvement on pre-Covid levels.

Group KPI performance

Although the pathway to the absolute targets is not linear, we will continue to report our data on a year on year basis, to track progress. Whilst the performance against KPI intensity targets for 2020 is negative due to the significant reduction in passenger numbers, the underlying trend is positive due to planned fleet changes. A return to something closer to normal operation will highlight the impacts of those investments, although possibly over a longer time period.