Environmental Matters and Climate Change
We recognise the impact that climate change could have on the Company and our key stakeholders and our responsibility to take action to reduce our emissions.
Our climate change journey
In FY24, we have made positive strides in understanding and defining the next steps of our climate change journey.
In addition, the move to online applications for the Transact platform means that over 80% of all portfolios opened in the year were online, resulting in a significant reduction in paper. We have also reviewed internal paper use resulting in each of our offices making efforts to reduce printing. We continue to recycle all confidential waste at the London office.
100% of the electricity supplied to our London office and UK-based data centres, which account for 97% of our UK and Isle of Man (IoM) Scope 2 emissions, is from renewable sources.
Following the introduction of the FCA’s Sustainability Disclosure Requirements and investment labels regime we performed a review of Transact’s, and the wider Group’s, promotional materials to ensure that we complied with the anti-greenwashing rules and we have introduced functionality to the Transact platform to meet its requirements as a distributor.
Following our increased focus on climate change in 2023 we were pleased to see this reflected in our improved scores from external sustainability rating agencies. Our second submission to CDP received a score of C, up from a D, and MSCI awarded us an A, up from BBB.
We recognise that, despite the progress made this year, we still have work to do and plan to address the following in the short term:
- Developing a sustainability strategy to focus our efforts on the issues that are most material to the business and our stakeholders.
- Reducing energy use by moving our London office to a more energy efficient building.
- Updating our supplier onboarding process to consider sustainability factors.
- Continuing our programme of employee and supplier engagement.
- Considering where we can use our influence to reduce our indirect Scope 3 emissions by encouraging sustainable commuting to work and sustainable procurement policies.
- Improving our data collection for Scope 3 emissions.
Following this, we will look at the following in the medium and long term:
- Updating our scenario analysis work in 2026.
- Producing a Sustainable Supply Chain Charter.
- Producing a transition plan using the Transition Plan Taskforce disclosure framework published in October 2023. This will consider internal carbon prices as well as carbon-related opportunity metrics.
Metrics and Targets
The Group has adopted the reporting requirements of the Streamlined Energy and Carbon Reporting (SECR) policy, as implemented by the UK Government in 2019. With regards to our operational activities, we have reported our greenhouse gas emissions, energy use and carbon intensity ratios on pages 31 and 32 of the financial year 2024 Group Annual Report and Accounts.
The table below shows targets that we have committed to and also targets that we are aiming for in the short to medium term, the details of which are still being considered or developed.
| Risk mitigation | Target | Key metric | Timeframe | Status |
|---|---|---|---|---|
| Mitigate the risk of harming our reputation due to not setting targets to reduce of emissions as expected by key stakeholders | We have committed to a carbon reduction target of 60% of direct operational Scope 1 and location-based Scope 2 emissions against a 2022 base year. | Carbon emissions | 2033 | On track |
| We commit to reaching net zero emissions by 2050. This covers Scope 1, 2 and 3 carbon emissions. | 2050 | We aim to develop a net zero roadmap over the medium term | ||
| Ensure resilience of our suppliers | To ensure the resilience of our suppliers and alignment with our goals, we want our suppliers to demonstrate their commitment to environmental goals by having carbon emission reduction targets. | Number of suppliers with carbon reduction targets in place | Not set | Under consideration |
Our carbon and climate change plan
The below illustrates the achievements of the Group in the last three years and sets out the next steps to be taken over the short, medium and long term for the Group as it transitions towards achieving its goal of being net zero.
Initiative Pathway
| Achievements | Future Plans | |||
|---|---|---|---|---|
| 2022-23 | 2024 | 2025-27 | 2027-2035 | 2035-50 |
| Year 1 and 2 reporting achievements | Year 3 reporting achievements | Short term | Medium term | Long term |
| • Confirmed baseline year for emissions • Measured and reported Scope 1, 2 and 3 emissions • Assessed climate change risks and opportunities • Established senior governance responsibilities | • ESG materiality assessment • Established a Sustainability Forum • Supplier engagement programme • Employee Forum on sustainability | • Develop a sustainability strategy • Perform climate change scenario analysis • Draft transition plan and design roadmap to meet net zero targets. • Adoption of ISSB standards • Measure, reduce emissions and report • Full climate change risk register • Climate change register of compliance • Employee awareness and training • Supply chain climate change standards | • Sustainability strategy embedded • Validation of net zero roadmap • Measure, reduce and report emissions and strategy • Climate change risks framework review and update • Employee, investor, and client engagement • Supply chain standards extended to sustainability • Adoption of TNFD standards | • Action delivery against net zero roadmap • Measure, reduce and report emissions and strategy • Asset owner engagement and influence • Supply chain auditing • Platform ESG insights supporting IFA/clients |