Performance, reports and data
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.
Reduction target information (metric) Base year (2018) 2025 Target Required % reduction from 2018 2020 % change from base year % change YOY (2019-2020) Required % reduction to meet target Traction energy: (vehicle fuel and electricity) per m pass km MWh / m pass km 66.92 58.72 (12.25)% 71.40 6.7% 9.9% (17.75)% Traction Carbon Emissions (Scope 1 & 2) tCO2e / m pass km 17.67 15.45 (12.53)% 22.28 26.1% 33.5% (30.64)% Total Scope 1 & 2 Emissions tCO2e / m pass km 19.26 16.45 (14.59)% 23.60 22.5% 25.0% (30.30)% Site Scope 1 & 2 Emissions (building use only) (tCO2e) 41,656 38,199 (8.30)% 36,549 (12.3)% (10.2)% 4.52% Landfilled Waste Disposal – tonnes 7,711 5,783 (25.00)% 5,773 (25.1)% (24.2)% 0.18% Water Consumption – m3 478,956 439,208 (8.30)% 397,731 (17.0)% (19.0)% 10.43%
Greenhouse gas emissions
Significantly reduced load factors through the pandemic has driven the key intensity metric of tCO2e / million passenger km to increase by 25.5% between 2019 and 2020. This can be seen in the 47% reduction in passenger kms travelled vs 2019.
Intensity metrics 2015 2016 2017 2018 2019 2020 % change YOY (2019-2020) (tonnes CO2e/£million revenue) 428 430 373 353 321 299 (6.9)% Group Totals (million pass.km) 37,540 41,107 42,485 44,488 46,258 24,656 (46.7)% Traction Carbon Emissions (Scope 1 & 2) (tCO2e/mpkm) 14.15 18.70 17.78 17.67 16.69 22.28 33.5% Total tCO2e per million pass.km (Scope 1, 2 & 3) 22.55 22.01 20.43 19.46 19.06 23.93 25.5%
Absolute Greenhouse Gas (GHG) Emissions by scope
Scope 1 emissions (from combustion of fuels) have reduced by 38% in 2020, driven by the significant reductions in vehicle movements during the pandemic. Scope 2 emissions (from electricity usage) have increased by 36%; this is a result of the expansion in the operations of the German Rail business which mobilised an additional contract in the year. This has more than offset the reduction in scope 2 emissions from buildings. This change will continue to accelerate through the other divisions as investment in plug-in hybrid and electric vehicles accelerates and a challenge for 2021 is to ensure that the full scope of emissions from the use of electricity in traction are recorded and reported in the appropriate way. Scope 3 relates to National Express Coach third party operators – which are outside of National Express Group’s direct operational control for emissions reporting.
tCO2e emissions by scope 2015 2016 2017 2018 2019 2020 % change YOY (2019-2020) 1 771,922 815,788 801,061 808,650 823,582 514,106 (38)% 2 66,317 95,107 60,682 48,583 49,938 67,879 36% 3 8,257 9,620 6,127 7,627 8,221 8,641 5% Total 846,496 920,516 867,870 864,859 881,741 590,545 (33)%
Absolute Greenhouse Gas (GHG) Emissions by division
Our total Group emissions decreased significantly year-on-year from 881,741 tCO2e in 2019 to 589,976 tCO2e in 2020. As discussed above passenger kilometers fell further than emissions and this resulted in a decrease in carbon efficiency for the business as a whole. The increase in emissions from the German Rail business is driven by the increase of some 8.6million km per annum over 2019 and 2020.
Divisional tCO2e 2015 2016 2017 2018 2019 2020 % change YOY (2019-2020) ALSA 311,985 319,397 313,608 317,812 324,007 234,477 (27.63)% Bahrain 12,862 21,698 20,506 20,433 22,833 20,214 (11.47)% Germany – 26,395 28,704 25,367 29,269 52,347 78.85% National Express Limited* 106,203 110,799 105,333 101,566 101,914 63,582 (37.61)% UK Bus 138,822 138,449 132,586 128,787 125,466 79,187 (36.89)% UK Trains 43,408 44,341 4,038 – – – – US and Canada 232,577 258,183 261,913 269,916 276,693 140,168 (49.34)% Business Travel & Leased Vehicles 641 1,254 1,183 978 1,559 569 (63.48)% Group Total 846,496 920,516 867,870 864,859 881,741 590,545 (33.03)%
The method we have used to calculate GHG emissions is the GHG Protocol Corporate Accounting and Reporting Standard (revised edition), together with the latest emission factors from recognised public sources including, but not limited to, Defra, the International Energy Agency, the US Energy Information Administration, the US Environmental Protection Agency and the Intergovernmental Panel on Climate Change. We have used a materiality threshold of 5% and have accounted for all material sources of GHG emissions and have reported emissions for the period 1st January 2020 to 31st December 2020 in line with our financial statement.
We are committed to ensuring that our GHG accounting system, results and accompanying reports remain robust, continue to enhance our Group-level emission performance year on year and are in compliance with the mandatory requirements of the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (which Regulations implement the government’s policy on Streamlined Energy and Carbon Reporting (SECR)). During 2020 we reviewed our business model against the GHG Protocol, with particular reference to the control approach taken when reporting our GHG emissions. The outcome of this review is that emissions from part of our UK Coach fleet are now being reported under Scope 3. This is a change to previous emissions reports where the emissions from the full UK Coach fleet were reported under Scope 1.
Streamlined Energy and Carbon Reporting
Another new requirement for 2020 environmental reporting to comply with the Streamlined Energy and Carbon Reporting (SECR) regulations is the reporting (in MWh rather than tCO2 in line with existing standards) of the aggregate of:
- the annual quantity of energy consumed from activities for which the company is responsible, including the combustion of fuel and the operation of any facility; and
- the annual quantity of energy consumed resulting from the purchase of electricity, heat, steam or cooling by the company for its own use.
MWh by Division 2019 2020 ALSA 1,201,357 840,100 US and Canada 1,027,600 529,482 UK Bus 482,724 311,800 National Express Limited 383,914 55,127 Germany 65,700 121,000 Bahrain 66,037 53,314 Total 3,227,332 1,910,823 Energy consumed from activities for which the company is responsible, including the combustion of fuel and the operation of any facility 3,103,562 1,739,101 Energy consumed resulting from the purchase of electricity, heat, steam or cooling 123,770 171,721 Proportion of that figure relates to energy consumed in the UK and offshore area 2019 2020 UK 866,638 366,927 Offshore 2,360,694 1,543,896 UK proportion 37% 24%
This is another way of stating existing disclosures (as it is simply stating the same information in different measurement units) so the drivers of movement in tCO2 and kWh for the Group should be broadly the same. The fact that, measured by MWh, emissions are down 40% year-on-year whereas measured by tCO2 they are down 33% will be driven by a combination of definitions, measurement standards and changes in energy ‘mix’ that we will now have to divert more resources to better understand.
Finally, waste disposed to landfill; water consumption; and building emissions have all shown a reduction between 2019 and 2020 but this trend will be skewed by lower occupancy of buildings and less washing of vehicles not in service during the pandemic.