Environment

Plan Zero 40

Our decarbonisation strategy, Plan Zero 40 commits us to delivering Net Zero across our own operations (Scope 1 and 2) by 2040 and the delivery of a 2030 Science Based Target in line with a 1.5-degree pathway. In April 2023 we submitted our Interim and Net Zero carbon reduction targets to the Science Based Targets initiative (SBTi) and are awaiting verification of our plans.

We have segmented our investigations and delivery of decarbonisation initiatives into four strands: Estate and Assets, Transport, Products and Services, and Value Chain.

View our Net Zero 40 journey

View our emissions table

Read about our Carbon Trust Route to Net Zero Standard achievement

Transport

Decarbonisation of our transport, as detailed within our developing Sustainable Transport Strategy, is being addressed under four pillars: fleet, business travel, employee commuting and transportation and
distribution (upstream and downstream).

Under Plan Zero 40 we have committed to transition to 100% Ultra Low Emission Vehicles by 2030, and we are progressing well towards this target, roughly 15% of our fleet are ULEV and the majority of our new vehicle orders are ULEV.

We have announced the launch of Babcock’s EV Salary Sacrifice scheme, which has been positively received with large interest and uptake from across our workforce. Over the coming year we are working to develop Workplace Travel Plans across key sites and reviewing business travel to unlock and promote sustainable travel options for our employees and visitors. We are also working with our partners to reduce our logistics emissions.

Estates and assets

Babcock’s estate is vast, operating in a variety of regions across the globe, so we do not have a one-glove-fits-all approach to decarbonisation. We are working to prepare Carbon Reduction Plans across all our global operations. Within these plans we are firstly ensuring there is an accurate and complete GHG inventory, secondly conducting hotspot analysis, desktop assessments and site energy audits, before finally preparing a techno-economic analysis and implementation roadmap to identify the most effective route to Net Zero.

We have developed ten ‘Pathfinders’ Carbon Reduction Plans, which capture c.75% of Babcock’s estate related scope 1&2 emissions. This comprehensive approach gives us the insight to understand the true cost and impact of Net Zero on our estates and assets, enabling us to effectively plan our journey to Net Zero. We are on track to meet our commitment to have developed Carbon Reduction Plans across our operations by 2024.

We continue investigations to unlock renewable energy generation opportunities across the estate. We currently have several projects with cumulative installed capacity in excess of 25MW which are progressing through the stages of development. At a local level, we are our assessing energy performance as part of our planned maintenance and specifying low carbon products into asset life cycle replacements.

We remain committed to delivering high quality development within our construction and refurbishment programmes. Our development at Bristol Technology Centre recently reached practical completion and achieved a BREEAM excellent rating.

Products and services

We have been working to unlock the low carbon opportunities presented by the low carbon economy and aim to become a leader in low carbon enablement. In creating a safe and secure world, we strive to support our customers on their journeys to Net Zero and have been working with a variety of customers across our operations to identify decarbonisation opportunities. Our Training and Technology and Innovation teams are investigating a range of innovative low carbon opportunities, and we are working to ensure we have the right capabilities to deliver.

Over the last 12 months, we have developed our own climate e-training package, Curious about Climate, which will raise awareness of climate related risks and opportunities.

We recognise the importance of the Scope 3 footprint on our own footprint, but also that of our customers. Utilising a hybrid spend and revenue-based approach, we have commenced work to calculate our Scope 3 downstream footprint. Based on the work to date, we understand that emissions from Use of Sold Products, Category 11 is one of the largest contributors to our footprint. Due to the early stages of our investigations and the limitations to the methodology utilised, we have not reported our full Scope 3 footprint within our annual figures whilst we refine the calculation methodology.

Value chain

We understand our responsibility to lead by example to encourage and influence our supply chain to transition to the low carbon economy. Babcock has a strong sustainable procurement policy to underpin and ensure we deliver our operations in a sustainable manner.

Utilising the Environmentally Extended Input Output (EEIO) approach, we are working to calculate our Scope 3 upstream emissions. We recognise the limitations of the EEIO approach and are working collaboratively with our partners and participating in a range of industry working groups to mature the approach to emission calculations.

Our teams continue to work with our partners to investigate, assess and deliver low carbon opportunities, such as our recent transition to HVO fuel

Task Force on Climate-related Financial Disclosures

Building on last year’s qualitative assessment, we have been working towards full disclosure to the Task Force on Climate-related Financial Disclosures (TCFD) requirements, as per Listing Rule LR9.8.6R. We are now consistent with 9 of the 11 TCFD requirements, with limited disclosures on Metrics and Targets A and B having not yet set an internal carbon price, nor fully embedded cross-industry climate-related metric categories into our targets, nor reported our full scope 3 emissions across the full value chain due to the early stages of our investigations and the limitations to the methodology utilised. Over the coming 18 months we have committed to conducting detailed carbon assessments of our products and services and developing Net Zero roadmaps.

Last year, we set governance with respect to climate change, integrated risk management and scenario planning in our strategic planning cycles and had set some initial targets. This year, we conducted a strategic climate-related risk assessment to assess the financial impact of the key risk themes on the organisation’s business strategy and financial planning.

See page 67 of our annual report for more information on TCFD.

See page 87 of our annual report for more information on principal risk

Climate management instruments

We acknowledge that the delivery of our Net Zero targets will be challenging and requires immediate action. To support, influence and encourage the delivery of our ambitious targets, we are working to investigate and implement a range of Climate Management Instruments.

Executive Remuneration linked to the carbon performance of the organisation, and Internal Carbon Pricing are two instruments being reviewed for implementation in FY24. Alongside this, the performance of our Sectors and DRCs are being assessed against a range of non-financial metrics and targets.

Natural environment

Throughout our global operations we interact with a range of complex natural ecosystems. Maintaining and enhancing the biodiversity of these ecosystems is a priority as we strive to protect and enhance the environment and adapt to the impacts of Climate Change.

We have identified fifteen sites across the organisation where our interaction with and impact on local eco-systems has been considered to potentially be significant. We are now working to conduct biodiversity assessments across all these sites and are on track to complete this work by the end of 2023. The bio-diversity assessments will allow Babcock to understand our baseline, against which we can develop the initiatives and roadmaps to achieve our medium-term objective of 10% biodiversity increase across our estate. Our approach is establishing a solid foundation for our broader natural environment programme which will be launched over 2024.

Babcock has also become a member of the UK Business and Biodiversity Forum and we are working to explore new legislative requirements emerging from COP15 to disclose nature-related risks and impacts, in line with the Task Force on Nature Related Financial Disclosures (TNFD). Over the coming year we are working to conduct a pilot TNFD assessment, setting the pathway for integration of nature considerations in our business as usual.

Taking action on our commitments

Consumption of materials and resources is a significant contributor to Babcock’s environmental footprint and we understand our responsibility to minimise the impacts of our operations. Last year we announced a range of additional commitments (over and above those stated within Plan Zero 40 and our TCFD disclosures):

In line with our ‘Top-down, Bottom-up’ approach, our Sectors and DRCs have identified significant sites and are working hard to develop ‘Bottom-up’ plans and programmes to deliver on our commitments. Significant sites have been identified based on area, consumption and emissions. Whilst there is a significant amount of work still to do, we are on track to meet our commitments.

Sustainability targets

Awareness raising and engagement

We understand the importance of awareness raising and engagement in embedding sustainability into our culture and ‘business as usual’. As part of our engagement and communications strategy, every year we deliver a number of environmental campaigns to raise awareness and engage with our workforce and wider value chain.

Examples include our ‘Environmental Action Month’, where local environmental working groups from across the organisation co-ordinated environmental engagement and volunteering activities within their regions, such as beach litter picks, river cleans by kayaks, tree planting and environmental coffee mornings.

Data management

Data is a key enabler to our environmental strategy and is used across the organisation to inform our decisions. We have enhanced our capacity and capability with our dedicated team of data specialists, who have implemented rigorous internal audit processes, and we have matured our investigations into the development of our Group-wide Environmental Data Management System, which we aim to implement throughout 2023. We have developed a clear data improvement roadmap which will ensure compliance with the increasing regulatory reporting requirements.