Sustainability

Cutting our direct emissions | Increasing energy efficiency and renewables | Quantifying and reducing scope 3 emissions

We are at a key point in the fight against climate change, and the actions that we take over the next 10 years will be critical in limiting global warming to 1.5 degrees.

Through our Triple Carbon Pledge, we are proud to join the growing number of companies worldwide who have made a firm commitment to net zero operational carbon emissions.

By deploying rigorous carbon accounting, setting clear and timely Science-Based Targets (SBTs), and pursuing efficiency and innovation, we aim to reach net zero operational carbon by 2030. That’s 20 years ahead of the UK’s national target.

There is now growing consensus amongst leading companies on the steps that we collectively need to take in order to avoid the worst impacts of climate change for humans and the natural world.

As a water company we are already tuned-in to the impacts of changing climate and weather patterns on the water cycle.

So taking strong and urgent action now is not only in line with our values, but also safeguards the long-term integrity of the natural processes that we harness to deliver clean, affordable water to our customers.

We believe that this is also absolutely in line with the expectations of our shareholders and other stakeholders, and aligns with our ambitions as a purposeful, innovative and forward thinking company.

Our priorities for mitigating climate change

The good news is, we aren’t starting from scratch on the journey to net zero operational carbon. Reducing our emissions and mitigating climate change has been an important priority for Severn Trent for well over a decade.

We have publicly reported our emissions through the Carbon Disclosure Project (CDP) since 2010. We are now reporting (will be our third TCFD report in September 2021) in line with the recommendations of the Taskforce on Climate Related Financial Disclosures (TCFD). Since 2007, we have reduced our Scope 1 and 2 operational emissions by 84% and grown our renewable energy generation from 100 GWh to over 500 GWh.

We now need to redouble our efforts to meet our ambitious targets, this is why in 2019, we announced our Triple Carbon Pledge of: (1) net zero operational carbon, (2) 100% renewable energy and (3) 100% electric vehicles by 2030. Our work is actively linked in to Water UK’s Net Zero 2030 Routemap, which provides a framework for the entire sector to meet ambitious decarbonisation goals.

Our carbon reduction plan was approved in 2021 by the global Science Based Targets initiative (SBTi), just one of around 600 businesses globally to have done so at that time. Recognition from the SBTi – a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) - is widely accepted as providing the gold standard approval for emission reduction targets.

In January 2021, we signed up to the UN Climate Change Race to Zero campaign, pledging to deliver a water supply for customers that has net zero carbon emissions by 2030. Led by the United Nations Framework Convention on Climate Change (‘UNFCCC’), we joined other companies from around the world to rally leadership across businesses, cities, regions and investors for a healthy, resilient and zero carbon recovery. Our net zero scope, definition and journey align with the wider water industry commitment to reach net zero as a sector by 2030.

Our greenhouse gas emission targets are consistent with reductions that are required to keep warming to 1.5°C, the most ambitious goal of the Paris Agreement. This commits us to reduce absolute scope 1 and 2 GHG emissions by 46.2% by FY2031 from a FY2020 base year.*

Our Scope 3 emissions (indirect emissions arising within the value chain) make up a significant part of our overall emissions. As such, we have set a Science Based Target to reduce Scope 3 GHG emissions from use of sold products by 13.5% by FY2031 from a FY2020 base year* and a target for 70% of our suppliers (by emissions covering purchased goods and services, capital goods, upstream transportation and distribution and waste generated in operations) to have set a carbon target in line with Science Based Target criteria by FY2026.

Measures across the rest of our environmental ambitions will contribute synergistically to our climate goals. Managing demand for water reduces the energy required for pumping and treatment, enhancing biodiversity boosts natural carbon sinks, and our circular economy priorities create efficiencies and tackle emissions embedded in capital projects and infrastructure.

Alongside areas of our business with relatively clear GHG mitigation pathways are areas that will require greater investigation and investment. For instance, we need to work now to develop solutions and options to tackle emissions from our biogas production facilities in the future; one avenue being carbon capture and storage.

We also need to build knowledge around the opportunities for carbon removals to offset any unavoidable emissions. As land managers, our first port of call is to utilise and boost the capacity of our own land to sequester emissions, where that complements other land management objectives. To do this we need to rapidly quantify and analyse the potential and build capacity to put this into practice

Our priorities are:

Cutting our direct emissions

Increasing energy efficiency and renewables

Quantifying and abating scope 3 emissions

Cutting our direct emissions

Greenhouse gas emissions generated directly by our biological waste management processes, and by fossil fuels used in our assets (Scope 1) account for 164kt CO2e every year.

These emissions come from a number of sources, including:

Our vehicle fleet
On-site fossil fuel use, and most significantly
The wastewater treatment proces

Our vehicle fleet

Fuel used by our cars, vans and tankers accounts for some 11% of our direct emissions. In addition to reducing mileage from unnecessary journeys and encouraging efficient driving behaviour, our transition to electric vehicles will be key to eliminating these Scope 1 emissions.

Our 100% EV policy is already active, with all new cars purchased now electric, extending to all new vans by 2023. We are now installing over 350 charge points across over 65 sites. Electric HGVs and tankers may not be available by 2030, so we are exploring alternative low-carbon options such as hydrogen and biogas.

We are also helping our employees to move to more sustainable travel and cut their emissions. All employees can now go electric through a salary-sacrifice scheme. The monthly lease payment includes insurance, maintenance and roadside assistance, and is taken from gross pay, so reducing tax.

We also run a salary-sacrifice tax-saving cycle-purchase scheme, as well as promoting discounts with local travel providers to encourage travel on public transport.

We are installing 350 charge points across over 65 sites as our first steps to supporting a fully electric fleet by 2030

Nature’s processes also maintain a genetic library, preserve and regenerate soil, control floods, filter pollutants, assimilate waste, pollinate crops, maintain the hydrological cycle, regulate climate, and fulfil many other functions besides.

Without those regulating and maintenance services, life as we know it would not be possible as detailed in The Economics of Biodiversity: The Dasgupta Review.

Increasing energy efficiency and renewables

Emissions relating to purchased or acquired electricity constitute 183kt CO2e per year on a location basis (i.e. based on standard grid carbon factor).

Water utilities are a major user of electricity, with pumping the main source of demand, followed by compressors and blowers for aeration. There are two main routes that we are using to reduce emissions:

Managing our energy use
Boosting renewable energy supply

Quantifying and reducing scope 3 emissions

Our direct emissions and energy supply only tell part of the story. Other activities carried out on our behalf or embedded in the materials we use to create and maintain our assets and infrastructure are also associated with significant emissions. While these are not in our direct control, as an organisation that procures goods and services we are in a position to change how and what we procure, and to influence and support our suppliers and other stakeholders in reducing their emissions.

Understanding where and how big those emissions are - quantifying scope 3 emissions
Working with our suppliers to influence a reduction in their emissions through engagement, collaboration and sourcing

Quantifying Scope 3 emissions

Our first step in this area is to quantify our Scope 3 emissions, which we have already started doing as part of our Science-Based Target setting.

There are a wide range of Scope 3 emissions sources, however some of the most significant include construction materials and activities, goods we procure such as chemicals used in water treatment, and fuel use by contractors.

As the quantification of our Scope 3 emissions becomes part of our regular emissions reporting cycle, it will allow us to build a base of information on which we can construct a long-term strategy that targets the most significant areas of scope 3 emissions.

Working with suppliers

Based on our initial assessment, we know that working with our suppliers will be one of our priority areas to influence Scope 3 emissions.

Work is already underway to develop requirements for our suppliers to demonstrate they are taking action to measure and reduce their emissions, and our initial aim is for a substantial number of our largest suppliers to set a carbon target in line with Science Based Target criteria by FY2026.

We will work proactively with our suppliers to support them in their efforts to target high-potential emissions reductions.

In line with our circular economy approach we are also putting tools in place that will enable us to measure embedded carbon in our asset designs; establishing new criteria that factor whole-life carbon into the decision making process alongside other considerations.

Mitigating climate change: our to do list

Take robust actions to meet our Triple Carbon Pledge by 2030 and deliver against our Science Based Targets
Focus research and innovation around tackling process emissions
Increase the percentage of our electricity from self-generation or PPAs
Refine our understanding of Scope 3 emissions, engage our suppliers and prioritise action areas
Develop a clear greenhouse gas offsetting protocol, prioritising sequestration through management of our own land and catchments in our region

Spotlight: finding joined-up solutions

A critical theme across sustainability solutions, for ourselves but also more generally, is that they are ‘joined up’. That means they link into, adapt and improve the systems that were once creating the problem - rather than being a bolt-on, that is easy to bolt-off again. And it means they are designed to solve more than one problem at once - creating multiple benefits and opportunities for efficiency.

These joined-up solutions occur across our environmental activity - from nature-based solutions that deliver for nature, water catchment outcomes, and resource efficiency, to our high, and not-so-high-technology innovations to address leaks and pollution. It’s also a feature of our longstanding and significant investments in renewables.