Climate Space Register of Legal and Other Requirements

The TCFD is a recommendations led framework that can be used by any organisation, which seeks to develop recommendations for voluntary climate-related financial disclosures that are consistent and reliable and provide decision-useful information to investors, lenders and insurers in allocating capital and underwriting risk. This overarching goal is that better disclosure will lead to more informed decision, facilitating a smoother transition to a low carbon economy.

This guidance is primarily focused on disclosure. However, before meaningful climate-related information can be reported, an organisation must first integrate climate assessment, monitoring, and management into its routine business activities. For example, this may involve establishing or refining priorities, policies, processes, and practices related to measuring, assessing, managing, and reporting climate-related financial information—from strategic planning and enterprise-level risk management (ERM) to internal performance assessments and external reporting cycles.

Overview of the 11 TCFD-aligned disclosure, organised around 4 core themes:

*GHG emissions should be calculated in line with the GHG Protocol methodology. The GHG Protocol methodology is the most widely recognized and used international standard for calculating GHG emissions. Organizations may use national reporting methodologies if they are consistent with the GHG Protocol methodology.

Key features of TCFD

• TCFD is organisation orientated and is focused on the risks, opportunities, and resilience of the organisation to climate change.
• The recommendations have a strong focus on the risks and opportunities related to the transition to a low carbon economy and the physical risks associated with a changing climate, including the potential financial impact on the organisation.
• TCFD recommends that organisations consider the resilience of their strategies against climate-related impacts. To help organisations develop their understanding, scenario analysis is highlighted as a strategic tool for companies to use to consider the potential future outcomes and climate scenarios that are different from business as usual, and how these might affect their ability to enact their strategy.

TCFD UK Roadmap

In 2020, the UK government announced that it would be the first country in the world to roll out mandatory TCFD-aligned climate disclosures across the economy by 2025, with a significant portion of mandatory requirements in place by 2023.

Publicly Quoted Companies, Large Private Companies and Limited Liability Partnerships (LLPs)

Regulations are to be made at the end of 2021 requiring mandatory climate-related financial disclosures in the UK, with regulations coming into force on 6 April 2022 and to be applicable for accounting periods starting on or after that date.

Scope

• All UK companies that are currently required to produce a non-financial information statement, being UK companies that have more than 500 employees and have transferable securities admitted to trading on a UK regulated market, banking companies or insurance companies (Relevant Public Interest Entities (PIEs));
• UK registered companies with securities admitted to Alternative Investment Market (AIM) with more than 500 employees;
• UK registered companies which are not included in the categories above, which have more than 500 employees and a turnover of more than £500m.
• LLPs which have more than 500 employees and a turnover of more than £500m.

These changes are to be implemented using powers under the Companies Act 2006 and the Limited Liability Partnership Act 2000.

BEIS will review the case for expanding the scope of the regulations in 2023.

GUIDANCE

• Further detailed information is available in the TCFD Final Report 2017
• For examples and guidelines of good practice in TCFD reporting, see the TCFD Good Practice Handbook
• Guidance on Scenario Analysis can be found in ‘Guidance on Scenario Analysis for Non-Financial Companies (October 2020)’
• Supplementary guidance for both financial and non-financial sectors can be found here.

The Climate Change Levy (CCL) is a tax applied to energy consumed by business and the public sector and is automatically added to energy bills. 

The following main rates of CCL apply from 1 April 2024 and from 1 April 2026:

Certain processes are exempt from the main rate of CCL as are good quality CHP registered with CHPQA Scheme and in possession of a certificate of exemption. (see Amendments section below for further detail).

Climate Change Agreements (CCAs)

CCAs are available to certain energy intensive sectors. Holders of CCAs pay the reduced rate of CCL. As of 31 March 2022, the scheme is current closed to new entrants. Phase 2 of the CCA scheme runs from April 2013 to 31 March 2027 and is administered and regulated by the Environment Agency across the UK. Levy reductions for CCA holders between 1 April 2024 and 31 March 2026 are as follows:

Reductions are provided for commitments to sector negotiated energy or carbon reduction targets. Organisations failing to meet targets are required to buy carbon allowances to make up the shortfall, a situation that is potentially very expensive.

2023 regulations extended the CCA scheme to 31 March 2027 and added target period 6, which runs between 1 January 2024 and 31 December 2024. The carbon allowance buy out price is set at £25for target period 6.

Levy reductions are provided on 100% of any taxable commodity, where eligible processes present 70% or greater of the organisation's consumption.

Carbon Price Support

Fuel used to generate electricity was exempt from the CCL until the Finance Act 2013 introduced a new tax, the Carbon Price Support (CPS). Generators with >2MW capacity must now pay the CPS on fuel used to generate electricity.

Individual CHP plants >2MW must pay the CPS on the proportion of fuel (coal, gas, kerosene and LPG) used to generate electricity. The proportion used to generate heat is exempt.

Since April 2015 fossil fuels used in good quality combined heat and power (CHP) plants are exempt from the carbon price floor.

CPS rates of CCL are as follows: 

The CPS rate per tonne of carbon has been frozen at £18 until 31 March 2026. This has also frozen these rates on each commodity during this period.

Forthcoming Changes to the Climate Change Agreement Scheme

On 23 November 2023, the Autumn Statement confirmed that a new, six-year climate change agreement scheme would run between 1 July 2027 and 31 March 2033. It was announced that the scheme will open to further sectors and more regular reporting will be required. Targets will be applied between 2025 and 2030.

Other Amendments

The Climate Change Agreements (Energy Intensive Installations) Regulations 2006 and the Climate Change Agreements (Eligible Facilities) Regulations 2012 expanded the types of installations that may be covered by a climate change agreement to include other activities such as heat-treating metals. The Schedule to the 2012 Regulations lists the relevant processes and activities that are considered eligible. 

Exemptions for Mineralogical and Metallurgical Processes

The Finance Act 2014 provides a 100% exemption from the CCL on energy used in metallurgical and mineralogical processes. Exempt processes are presented in HMRC guidance and include glass manufacture, metal production, processing and treatment.

Other Amendments to the Climate Change Levy (General) Regulations 2001

• A 2013 amendment introduced the formula which establishes the quantity of fuel referable to the production of electricity in a CHP station on which carbon price support rates of the CCL are due.
• second 2013 amendment corrects an error in this formula by excluding fuel used to produce mechanical power.

Other Pertinent Legislation and Amendments:

• The Climate Change Agreements (Amendment of Agreements) (EU Exit) Regulations 2018 updated CCAs to reflect the UK's departure from the EU. 
• The Climate Change Levy (Fuel Use and Recycling Processes) (Amendment) Regulations 2014 exempt solid fuels used for structural purposes in the production of syngas from industrial and municipal waste from the climate change levy.
• The Climate Change Levy (Combined Heat and Power Stations) Regulations 2005 and 2013 amendment allow supply of electricity generated in Good Quality CHP plants to be exempt from the main rate of CCL.

GUIDANCE

HMRC has provided guidance on the levy, including registration, the treatment of CHP, relief and special treatment for taxable supplies, renewable electricity and penalties and interest.

Buildings are required to be assessed and subject to energy performance certificates. This legislation applies whenever a building is marketed, constructed, sold or rented or to existing buildings for public use. There are also specific requirements for the inspection of air conditioning systems.

This legislation implements the Energy Performance of Buildings Directive (EPBD - 2010/31/EU), which aims to increase the energy efficiency of buildings and reduce their carbon emissions. It introduces two types of building energy certificates: Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs).

Energy Performance Certificates (EPCs) 

EPCs: When are they required and what do they include?

EPCs classify a building with an energy efficiency rating (A-G) and must be produced (by accredited assessors) for all buildings whenever a building is marketed, sold or rented, but not when they are gong to be demolished.

An EPC must be provided on construction of a building, or where it is modified to provide less or more parts for separate use and this has involved modifications to fixed services for heating, hot water, air conditioning or mechanical ventilation. A 2016 amendment transferred the duty to provide an EPC under these circumstances to these regulations from the Building Regulations 2010. 

The EPC will be accompanied by recommendations for cost-effective actions to improve the rating. They must include the address, useful floor area and date issued.

An EPC must be displayed in commercial premises larger than 500m² that are frequently visited by the public (where an EPC has previously been issued on the sale, rent of construction of that building).

EPCs: Exempt Buildings

EPCs are not required to be prepared for exempt buildings, including:

• industrial sites, workshops, religious buildings, protected buildings and non-residential agricultural buildings with low energy demand;
• temporary buildings with a time of use of two years or less; and
• stand-alone buildings with a total useful floor area of less than 50m

Display Energy Certificates (DECs)

DECs are specific EPCs, produced by accredited assessors, for buildings occupied by a public authority or an institution providing a public service with a total useful area greater than 250m2. 

They show the actual energy usage of a building, the Operational Rating, and are based on the energy consumption of the building as recorded by gas, electricity and other meters. The DEC should be clearly displayed at all times in a prominent place clearly visible to the public. A DEC will be accompanied by an Advisory Report that lists cost effective measures to improve the energy rating of the building. DECs are valid for one year for buildings over 1000m2, or 10 years otherwise. The accompanying Advisory Report is valid for 7 years.

Air Conditioning System Inspections

The legislation requires the inspection of air conditioning systems with an effective rated output of more than 12kW (whether in dwellings or non-dwellings) at least 5 years following the installation of the units comprising it, and at 5-year intervals subsequently. The principal guidance on these inspections is provided in CIBSE's TM44 document. 

A “system” is defined as the sum of individual cooling units under the control of one building operator/owner. The inspection will include an assessment of efficiency, a review of their sizing and advice on improvements or replacements and alternative solutions.

Generally, a 12kW cooling capacity air conditioning system is used in the following types of premises:

• general office spaces up to approximately 200 square metres;
• offices with high levels of IT and electrical equipment up to 100 square metres;
• retail spaces with average levels of display lighting up to 250 square metres;
• retail spaces with high levels of display lighting and illuminated cabinets up to 150 square metres.

An office building of 2,000 square metres is likely to need air conditioning with a 250kW output.

A 2020 amendment kept the 12kW threshold requiring inspections but requires that inspections consider the capabilities of the air-conditioning system for combined air-conditioning and ventilation to optimise performance. 

Amendments

• Regulation EU/244/2012 establishes a comparative methodology framework for calculating cost-optimal implementation measures to meet the minimum energy efficiency requirements for new buildings and refurbishment of existing buildings.
• A 2013 amendment requires any Green Deal information to be included in EPCs.
• The Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2015  revise the fees for accessing data on the EPC register.
• A 2022 amendment sets fees for lodging domestic and non-domestic EPC data on registers, which is required before each EPC may be issued.
• A 2024 amendment enables further anonymised data to be published from energy assessments online. Owners, landlords, occupiers and authorised third parties may access further assessment information, including that was not lodged on the public register.  

A legally-binding target is set on the UK to achieve 100% (net zero) reduction target in carbon emissions by 2050 based on 1990 levels. The Act also established the Committee on Climate Change, allows devolved administrations to set up emissions trading schemes and sets a number of reporting requirements on progress towards the target and climate change adaptation.

Binding Emissions Reduction Target

Part I (as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019) sets the Government a target to reduce net carbon emissions by 100% of the 1990 baseline by 2050.

This includes carbon dioxide and other greenhouse gases (currently methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and nitrogen trifluouride but this could be expanded to include any other designated greenhouse gas). This will be achieved by setting a carbon budget which the UK cannot exceed for each five year budgetary period.

The targets may be amended in light of scientific developments, or in the event of new greenhouse gases being discovered.

The Secretary of State must submit a report setting out proposals and policies for meeting the carbon budgets for the current and future budgetary periods. Emissions of greenhouse gases from international aviation or international shipping do not count as emissions from sources in the United Kingdom.

Committee on Climate Change 

Part II established the Committee on Climate Change. The committee advises the Secretary of State on various matters relating to climate change including: progress towards targets, and how to achieve the set targets; matters relating to emissions from international shipping and aviation; emissions trading schemes and the impact of and progress in adapting to climate change.

UK Emissions Trading Schemes

Part III allows the authority to set up emission trading schemes to encourage reductions in carbon emissions. Trading schemes may limit activities that lead, directly or indirectly, to emissions of greenhouse gases (for example, by capping emissions from a particular set of activities and allowing trading of emissions within the cap), or they may encourage activities that directly or indirectly lead to a reduction in greenhouse gas emissions or the removal of greenhouse gases from the atmosphere.

Risk and Adaptation
 
Part IV requires the Secretary of State to periodically report on the risk of current and predicted impact of climate change to the UK and to take advice from the Committee on Climate Change (a parallel requirement exists for Northern Ireland). The report should include proposals with timeframes on how to adapt. The Secretary of State and Welsh ministers can give guidance to local authorities and other public bodies on assessing the risks of climate change, preparing reports on this and assessing the progress made towards implementing those proposals and policies.

Amendments to other Legislation

The Act made further changes to support emissions reductions:

• amendments to the Energy Act 2004 to improve the operation of the renewable transport fuel obligations (RTFO);
• a power to introduce charges for single use carrier bags;
• an amendment to the Environmental Protection Act 1990 to allow local authorities to pilot incentive schemes to encourage household waste minimisation and recycling;
• amendments relating to the Certified Emissions Reductions Scheme;
• powers and duties relating to the reporting of emissions by companies and other persons; and
• a duty to make annual reports on the efficiency and contribution to sustainability of buildings on the civil estate.

This Act requires the introduction of mandatory reporting of emissions by companies. The Companies Act 2006 (Strategic Report and Directors's Report) Regulations 2013 require that quoted companies report greenhouse gas emissions in their directors' reports.

Taskforce on Nature-related Financial Disclosures (TNFD) is a new global market-led initiative which aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities. TNFD will deliver a framework for organisations to report and act on evolving nature-related risks, building on the success of the Task Force on Climate-related Financial Disclosures (TCFD), in order to support a shift in global financial flows away from nature-negative outcomes towards nature-positive outcomes.

The building of the TNFD framework has begun and consultations are expected in 2023.

Further information on the TNFD timeline can be found here.

The Clean Growth Strategy sets out the government's approach to achieving social and economic growth whilst reducing carbon emissions. The Climate Change Act 2008 committed the UK to reducing greenhouse gas emissions by at least 80 per cent by 2050 when compared to 1990 levels.

Key policies and proposals in the Clean Growth Strategy include:

• Accelerating Clean Growth;
• Improving Business and Industry Efficiency (25% of UK Emissions);
• Improving Our Homes (13% of UK Emissions);
• Accelerating the Shift to Low Carbon Transport (24% of UK Emissions);
• Delivering Clean, Smart, Flexible Power (21% of UK Emissions);
• Enhancing the Benefits and Value of Our Natural Resources (15% of UK Emissions);
• Leading in the Public Sector (2% of UK Emissions); and
• Government Leadership in Driving Clean Growth.

This standard supports the development of climate change adaptation plans. Principles, requirements and guidelines are set out for adaptation to climate change, including on how to address impacts and uncertainties.

The standard aims to support organisations in developing effective adaptation plans, reflecting the challenges they face due to their circumstances.

Science-based targets are a set of goals developed by a business to provide it with a clear route to reduce greenhouse gas emissions. An emissions reduction target is defined as ‘science-based’ if it is developed in line with the scale of reductions required to keep global warming well-below 2°C from pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Science Based Targets Initiative (SBTi)

The SBTi is a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact and is one of the We Mean Business Coalition commitments. The initiative defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets.

The SBTi promotes corporate climate action and encourages companies from all sectors to demonstrate their leadership by setting science-based emissions reduction targets.

SBT Guiding Principles:

Guiding Principle 1: Reaching net-zero emissions for a company involves achieving a state in which its value chain results in no net accumulation of carbon dioxide in the atmosphere and in no net-impact from other greenhouse gas emissions.

Guiding Principle 2: In accordance with the best available science, the Paris Agreement and Sustainable Development Goals, companies should transition towards net-zero in line with mitigation pathways that are consistent with limiting warming to 1.5°C with no or limited overshoot.

Guiding Principle 3: The mitigation strategy followed by the company should inform long-term strategies and investments that mitigate exposure to climate-related transition risks, ensuring that the business model of the company will continue to be viable in a net-zero economy.

Benefits of adopting a Science Based Target

• Build business resilience and increase competitiveness
• Drive innovation and transform business practices
• Build credibility and reputation
• Influence and prepare for shifts in public policy

Initial recommendations for robust corporate net-zero target setting:

1. Boundary: A company’s net-zero target should cover all material sources of GHG emissions within its value chain.
2. Transparency: Companies should be transparent about the sources of emissions, the timeframe for achieving net-zero emissions, the amount of abatement and neutralisation planned in reaching net-zero emissions, and any interim targets or milestones.
3. Abatement: Companies must aim to eliminate sources of emissions within its value-chain at a pace and scale consistent with mitigation pathways that limit warming to 1.5°C with no or limited overshoot.
4. Timeframe: Companies should reach net-zero GHG emissions by no later than 2050
5. Accountability: Net-zero targets should be supported by science based emissions reduction targets that are consistent with Paris-aligned mitigation pathways.
6. Neutralisation: Reaching net zero emissions requires neutralizing a company’s residual GHG emissions with an equivalent amount of carbon removals;
7. Compensation: Companies should consider undertaking efforts to compensate unabated emissions in the transition to net-zero as a way to contribute to the global transition to net zero;
8. Mitigation hierarchy: Companies should follow a mitigation hierarchy that prioritizes eliminating sources of emissions within the value chain of the company overcompensation or neutralization measures. Land-based climate strategies should prioritize interventions that help preserve and enhance existing terrestrial carbon stocks, within and beyond the value chain of the company.
9. Environmental and social safeguards: Mitigation strategies should adhere to robust social and environmental principles
10. Robustness: Compensation and neutralization measures should: (a) ensure additionality, (b) have measures to assure permanence of the mitigation outcomes, (c) address leakage and (d) avoid double counting.

Broadly speaking, corporate net-zero targets differ across three key dimensions: (1) the boundary of the target; (2) the mitigation strategy that the company will follow to attain the target; and (3) the timeframe to achieve the target.

Mitigation Strategies and Tactics:

• Abatement: Emissions abatement corresponds to measures that prevent the release of GHGs into the atmosphere by reducing or eliminating sources of emissions associated with the operations of a company and its value chain. Reducing or eliminating sources of emissions within a company’s value chain mitigates the impact of the company on the climate, and the climate-related risks to which the company is exposed.
• Neutralization: To neutralize is to “render something ineffective or harmless by applying an opposite force or effect.” Accordingly, the removal and permanent storage of atmospheric carbon is a measure that, theoretically, can neutralize or counterbalance the effect of releasing CO2 and other GHGs into the atmosphere.
• Compensation: Compensation measures commonly used by companies include direct investment in emission reduction activities, purchase of carbon credits, and avoided emissions through the use of sold products, amongst others.

Guidance

For practical guidance on setting a SBT, please refer to ‘SBTi How-To Guide’ Version 1.0 April 2021 and SBTi Corporate Manual Version 1.1 June 2021.

A Step-by-Step guide for all companies, including small and medium-sized enterprises (SMEs) committing to SBTs can be found here.

The SBTi Criteria and Recommendations Version 4.2 defines the minimum qualitative and quantitative criteria for targets to be recognised by the SBTi. All of the criteria must be met in order for target(s) to be recognized by the Science Based Targets initiative (SBTi). In addition, companies will follow the GHG Protocol Corporate Standard, Scope 2 Guidance, and Corporate Value Chain (Scope 3) Accounting and Reporting Standard. SBTi recommendations are important for transparency and best practices, but are not required.

The Target Validation Protocol Version 2.1 describes the underlying principles, process, and criteria followed to assess targets and to determine conformance with the SBTi Criteria. The SBTi strongly recommends that companies review the Protocol before target development.

Call to action guidelines can be found at Call to Action Guidelines (April 2020)

Additional guidance for setting SBTs for specific sectors can be found here:

• Aviation
• Electric Utilities
• Information and Communication Technology (ICT)
• Apparel and Footwear
• Financial Sector

Corporate Net Zero Standard

Published in October 2021, the SBTi's Corporate Net Zero Standard is the world's first framework for corporate net zero target setting in line with climate science. It includes guidance, criteria, and recommendations.

Key requirements of the Net Zero Standard include:

1. Focus on rapid, deep emission cuts: Rapid, deep cuts to value-chain emissions are the most effective and scientifically-sound way of limiting global temperature rise to 1.5°C. This is the central focus of the Net-Zero Standard and must be the overarching priority for companies. The Net-Zero Standard covers a company’s entire value chain emissions, including those produced by their own processes (scope 1), purchased electricity and heat (scope 2), and generated by suppliers and end-users (scope 3). Most companies will require deep decarbonization of 90-95% to reach net-zero under the Standard
2. Set near- and long-term targets: Companies adopting the Net-Zero Standard are required to set both near-term and long-term science-based targets. This means making rapid emissions cuts now, halving emissions by 2030. By 2050, organizations must produce close to zero emissions and will neutralise any residual emissions that are not possible to eliminate
3. No net-zero claims until long-term targets are met: A company is only considered to have reached net-zero when it has achieved its long-term science-based target. Most companies are required to have long-term targets with emission reductions of at least 90-95% by 2050. At that point, a company must use carbon removals to neutralize any limited emissions that cannot yet be eliminated.
4. Go beyond the value chain: The SBTi recommends Companies to go further by making investments outside their science-based targets to help mitigate climate change elsewhere. There is an urgent need to scale up near-term climate finance; however, these investments should be in addition to deep emission cuts, not instead of them. Companies should follow the mitigation hierarchy, committing to reduce their value chain emissions before investing to mitigate emissions outside their value chains

The Greenhouse Gas Protocol establishes comprehensive global standardised frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions.

GHG Protocol supplies the world's most widely used greenhouse gas accounting standards. The Corporate Accounting and Reporting Standard provides the accounting platform for virtually every corporate GHG reporting program in the world.

After a company has determined its organizational boundaries in terms of the operations that it owns or controls, it then sets its operational boundaries. This involves identifying emissions associated with its operations, categorizing them as direct and indirect emissions, and choosing the scope of accounting and reporting for indirect emissions.

To help delineate direct and indirect emission sources, improve transparency, and provide utility for different types of organizations and different types of climate policies and business goals, three “scopes” (scope 1, scope 2, and scope 3) are defined for GHG accounting and reporting purposes. Companies shall separately account for and report on scopes 1 and 2 at a minimum.

Scope 1: Direct GHG emissions

Direct GHG emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment. Direct CO2 emissions from the combustion of biomass shall not be included in scope 1 but reported separately. GHG emissions not covered by the Kyoto Protocol, e.g. CFCs, NOx, etc. shall not be included in scope 1 but may be reported separately.

Scope 2: Electricity indirect GHG emissions

Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.

Scope 3: Other indirect GHG emissions

Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some examples of scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services.

Guidance

The first step in tracking emissions is the selection of a base year. Companies may need to track emissions over time in response to a variety of business goals, including:

• Public reporting

• Establishing GHG targets

• Managing risks and opportunities

• Addressing the needs of investors and other stakeholders

Once the inventory boundary has been established, companies generally calculate GHG emissions using the following steps:

1. Identify GHG emissions sources

2. Select a GHG emissions calculation approach

3. Collect activity data and choose emission factors

4. Apply calculation tools

5. Roll-up GHG emissions data to corporate level.

The calculation tools are available on the GHG Protocol Initiative website at: www.ghgprotocol.org.

Detailed information can be found at: https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf

Further information

For companies wishing to quantify and report their corporate value chain (scope 3) GHG emissions, a standardized methodology outlined in GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) is to be used in conjunction with the Corporate Standard.

An additional Technical Guidance for Calculating Scope 3 Emissions acts as a supplement to Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) can be found here.

GHG Protocol Scope 2 Guidance: an amendment to the GHG Protocol Corporate Standard - This guidance acts as an amendment to the Corporate Standard, providing updated requirements and best practices on scope 2 accounting and reporting.

WorldGBC’s Net Zero Carbon Buildings Commitment calls on businesses, organisations, cities, states and regions to reach net zero carbon operating emissions within their portfolios by 2030, and to advocate for all buildings to be net zero carbon in operation by 2050. 

The Commitment seeks to recognise and promote advanced climate leadership in decarbonising the built environment, to inspire others to take similar action, and to remove barriers to implementation. 

It aims to maximise the chances of limiting global warming to below 2oC and reduce operating emissions from buildings (currently 39% of energy-related CO2 emissions) through the five components of the Commitment framework: COMMIT, DISCLOSE, ACT, VERIFY, ADVOCATE. 

1. Commit: Assets under direct control to be net zero operational carbon by 2030
2. Disclose: Measure, disclose and assess annual asset and portfolio energy demand and carbon emissions
3. Action: Develop and implement a decarbonisation roadmap outlining key actions and milestones
4. Verification: Demonstrate enhanced energy performance, reduced carbon emissions and progress towards net zero carbon assets and portfolio
5. Advocate: Demonstrate leadership to support the wider transition towards net zero carbon buildings

Through this framework, the Commitment ensures that all signatories can deliver against their targets, while driving real and tangible reductions.

Who can join?

To become a signatory, entities must demonstrate an equivalent level of ambition and impact as the leadership required by the Commitment. This can be through:

• International presence to stimulate global markets
• Significant presence in their country
• Significant capacity to influence the built environment
• High level of carbon emissions within their sector relative to an average entity; and/or
• High potential for advocacy to increase uptake within industry

Detailed guidance can be found in the main technical document ‘WorldGBC Net Zero Carbon Buildings Commitment Detailed Guidance v1 January 2019’

UKGBC Net Zero Carbon Framework

UKGBC’s Net Zero Carbon Buildings: A Framework Definition builds upon the principles set out in the WorldGBC Net Zero Carbon Buildings Commitment and provides additional guidance relevant to the UK market. Whilst the Commitment sets out base requirements, the Framework is being developed to set more challenging requirements for net zero buildings in the UK.

The key points of difference are outlined in the table below:

This commitment challenges companies, cities, states and regions to reach net zero operating emissions in their portfolios by 2030 and to advocate for a new zero carbon built environment by 2050.

The UK GBC commitment forms part of the World Green Building Council’s Advancing Net Zero initiative.

The commitment aims to support radical reductions in the building sector’s impact on climate change. This would be delivered through a shift towards major energy efficiency improvements and a complete transition to renewable energy.

The commitment involves five key steps:

1. Commit to operating at net zero carbon emissions by 2030.
2. Disclose scope 1 and 2 annual asset energy demand and carbon emissions.
3. Act to develop and implement a detailed decarbonisation roadmap to net zero carbon.
4. Verify asset level greenhouse gas emissions data through third party reviews.
5. Advocate for all buildings to be net zero carbon by 2050 and demonstrate leadership to support the wider transition.

Framework and Forum

The UK GBC net zero carbon buildings framework provides additional guidance on the commitment for the UK market.

A forum supports the commitment. The forum aims to assist signatories in creating, promoting and sharing solutions on delivering net zero buildings at scale.

Signatories

The UKGBC website holds details of signatories to the commitment.

The Race to Zero is UN-backed global campaign driven by science, rallying non-state actors including companies, cities, regions and financial institutions to take rigorous action to half global emissions by 2030 and achieve net zero by 2050 at the latest.

Collectively these actors now cover nearly 25% global CO2 emissions and over 50% GDP. These networks and initiatives define the substantive criteria that businesses, cities, states and regions, investors, universities, and others setting net zero targets are required to meet, tailored for different types of actors. A mapping of these substantive criteria is available here. Please refer to the websites of the individual networks’ and initiatives’ that make up the Race to Zero campaign for full details regarding the criteria they apply to their participants.

Participants joining the Race To Zero campaign must meet a minimum set of procedural criteria these include:

1. Pledge: Pledge to reach (net)-zero as soon as possible and set an interim target for your fair share of 50% reduction by 2030;
2. Plan: Within 12 months of joining, explain what actions will be taken for achieving both interim and longer-term pledges;
3. Proceed: Take immediate, meaningful action consistent with the short and long term targets specified;
4. Publish: Report progress annually by publishing against your targets on a public platform.

These criteria represent the ‘Starting Line’ for the race. Click here for full details on these criteria. Furthermore, to understand these criteria in more depth, please see the Interpretation Guide version 1.0 April 2021.

How to join Race to Zero as an actor?

• Large Businesses are invited to sign up to one of the following: Business ambition for 1.5, The Climate Pledge, B Corp Climate Collective, Exponential Roadmap Initiative (The 1.5°C Business Playbook can be found here), Business Declares, SME Climate Hub, Pledge to Net Zero, The future Net Zero standard with CBN Expert Community, Planet Mark.
• Small and Medium-sized Enterprises are invited to contact: SME Climate Hub
• Financial Institutions / Investors are invited to contact: UN-Convened Net Zero Asset Owner Alliance, Paris Aligned Investment Initiative, UN Net Zero Banking Alliance, Bankers for Net Zero
• Universities are invited to contact: Global Universities and Colleges for the Climate, Second Nature
• Certified B Corporations are invited to contact: B Corporation
• Company with a sectoral focus: Fashion Industry Charter for Climate Action, Water UK, International Wineries for Climate Action, Health Care Without Harm
• Chambers of Commerce are invited to contact the International Chamber of Commerce Chambers Climate Coalition
• Cities are invited to contact: Deadline 2020, Science Based Targets for Cities and ICLEI- Local Governments for Sustainability
• Regions/States are invited to contact: Under2Coalition

‘Pledge to Net Zero’ is an industry commitment in the UK requiring science-based targets from its signatories to tackle greenhouse gas emissions within their organisations.

The pledge recognises the need for organisations from the environmental services sector to take a leadership role in the transition to a Net Zero carbon economy by 2050 and is an initiative partnered with the UN’s Race to Zero campaign.

Pledge signatories commit to:

1. Set and commit to deliver a greenhouse gas target in line with either a 1.5°C (encouraged) or well below 2°C climate change scenario – covering buildings and travel as a minimum. 
2. Publicly report greenhouse gas emissions and progress against this target each year.
3. Publish one piece of research/thought-leadership each year on practical steps to delivering an economy in line with climate science and in support of net zero carbon. Alternatively, signatories may choose to provide mentoring and support for smaller signatory companies in setting targets, reporting and meeting the requirements of the pledge

This strategy sets out proposals to decarbonise the entire UK economy and to meet the UK’s net zero by 2050 target.

Key policy commitments across the various elements of the strategy are as follows:

Energy

• UK to be entirely powered by ‘clean’ electricity by 2035, subject to security of supply;
• £120 million ‘Future Nuclear Enabling Fund’
• To secure a final investment decision on a large scale nuclear plant by the end of this Parliament;
• Deploy 40GW of offshore wind by 2030, with 1GW of floating offshore wind by 2030;
• Reviewing the frequency of Contracts for Difference auctions to accelerate delivery of low-cost renewables; and
• Deploy flexibility measures, including storage, to address future power price spikes.

Fuel Supply & Hydrogen

• An Industrial Decarbonisation and Hydrogen Revenue Support Scheme, funding hydrogen and carbon capture business models;
• Award up to £100 million for up to 250MW of electrolytic hydrogen production capacity in 2023, with a further allocation in 2024;
• Climate compatibility will be a requirement for all future oil and gas licensing on the UK Continental Shelf; and
• Regulate the oil and gas sector in a way to minimise greenhouse gases.

Industry

• The East Coast and Hynet (North West) Clusters will act as economic hubs for green jobs;
• Future proofing industrial sectors through the Industrial Energy Transformation Fund; and
• Incentivising cost-effective abatement for industry through emissions caps under the UK ETS.

Heat and Buildings

• No new gas boilers will be sold from 2035;
• A three-year boiler upgrade scheme, providing household grants up to £5,000 for low carbon heating systems;
• £60 million for a ‘Heat Pump Ready’ scheme to support uptake of this technology;
• Rebalance emissions reduction policy costs from electricity bills to gas bills by the end of 2030;
• £1.75 billion for the Social Housing Decarbonisation Scheme and Home Upgrade Grants;
• £1.425 billion for Public Sector Decarbonisation, with a 75% target on emissions reduction from public sector buildings by 2037; and
• A ‘Hydrogen Village’ trial, informing a decision on hydrogen in the heating system by 2026.

Transport

• Ending the sale of new petrol and diesel cars by 2030;
• Requiring that all cars must be zero emissions capable by 2035;
• £620 million of funding for zero emission vehicle grants and electric vehicle infrastructure;
• £350 million for the Automotive Transformation Fund, supporting electrification of UK vehicles and supply chains;
• Expanding zero emission HGV trials;
• £2 billion on walking and cycling investments and £3 billion on bus services;
• 4,000 new zero emissions buses and a net zero rail network by 2050, with investment in rail electrification;
• An objective to remove all diesel-only trains by 2040;
• Extended trials of clean maritime vessels and infrastructure; and
• Target that 10% of aviation fuel will be Sustainable Aviation Fuel (SAF) by 2030.

Natural Resources, Waste and Fluorinated Gases

• Fundings for low-carbon farming;
• An additional £124 million for the Nature for Climate Fund by 2025;
• Restore 280,000 hectares of peat in England by 2050;
• Treble woodland creation rates in England;
• £75 million on net zero research and development on natural resources, waste and fluorinated gases; and
• Funding to implement free separate food waste collections for all English households from 2025.

Greenhouse Gas Removals

• £100 million of funding on Greenhouse Gas Removal innovation; and
• Explore options for regulatory oversight of Greenhouse Gas removals.

Cross-cutting Actions on Transition

• £1.5 billion of funding for net zero innovation projects;
• UK Infrastructure Bank to gather more than £40 billion of investment on low carbon technologies;
• New Sustainability Disclosures Regime, including mandatory climate-related financial disclosures and a UK green taxonomy (reliably identifying assets that address climate change);
• Incentivise and equip training providers, employers and learners to transition to net zero; and
• Publish annual progress updates against key indicators for achieving climate goals.