We have updated our Net Zero transition planning to consider elements of the final guidance published by the Transition Plan Taskforce which was announced at COP26 to develop the gold standard for transition plans. Key elements of the plan include:

• Implementation: For example, the increased use of renewable sourced electricity. All electricity sourced in the Middle East in 2023 was renewably sourced. In North America we joined the US Environmental Protection Agency’s Green Power Partnership, purchasing 25% of our 2023 electricity from renewable sources. Serco Asia Pacific has engaged a broker to increase renewable sourced electricity with a view to consolidating suppliers and sourcing 100% renewable electricity by 2027. Serco UK & Europe continues to source green power and has signed a new contract for the period 2025-28.

• Engagement: We undertake collaborative activities with peers in our industry and beyond to share experience and good practice and address common challenges. For example, in the Middle East we are members of the Dubai Chambers Sustainability Group and engaged in a number of COP28 preparation activities over the year, including the 'Road to COP28: Driving collective action in the UAE' event, in collaboration with UN Climate Change High Level Champion for COP28 and COP28 Presidency. In North America, we are members of the Washington Board of Trade, ESG Group. In the UK, we are members of industry groups such as the Business Services Association and Environmental Services Associations, both of which include an environmental focus. As strategic suppliers to global governments, we also contribute to policy consultations and roundtable events.

• Our global property teams have a key role in supporting Net Zero planning and initiatives.  Outputs from our North America Sustainable Real Estate Programme in collaboration with our landlords, JLL, include a green leasing policy, checklist and process flow decision tree which has been shared with our global property stakeholders.

In the UK we have a Carbon Reduction Plan which specifically covers our UK operations and meets the requirements of the UK government’s Procurement Policy Note 06/21: Taking account of Carbon Reduction Plans in the procurement of major government contracts. This Carbon Reduction Plan sets out our interim UK Net Zero targets and our progress and plans to reduce and avoid carbon to meet these targets and support the overall Serco Group Net Zero targets.

We have restated our base year Scope 1 and 2 emissions from 38,762 to 34,360 tCO₂e for 2022 in accordance with our base year emissions recalculation policy. Significant changes included carbon intensive contract losses, asset ownership updates, as well as smaller data, methodology and emission factor updates and errors. Our Scope 1 and 2 emissions for 2023 are 28,027 which is a reduction of 18% vs 2022. Reductions are a consequence of a focus on operational and energy efficiency, increased proportion of renewable sourced electricity, 27% to 47%, downsizing our property portfolio to account for increased flexible working, organic decline, increased data quality and ongoing transition to lower emission vehicles where possible. 

Based on the updated Science Based Targets Initiative (SBTi) methodology, we have worked with an external partner to review our targets, resulting in an increase to our near-term Scope 1 and 2 target to 42% by 2030 (previously 34%) and expansion of our Scope 3 engagement target to include customers and suppliers. Targets have been submitted to SBTi for validation in 2024.

We have been recognised as a supply chain engagement leader by the Carbon Disclosure Project (CDP), listed in the Financial Times' 2023 Europe’s Climate Leaders, and ranked 113 out of 750 companies for sustainability in the TIME magazine/Statista inaugural 2023 World’s Best Companies.

We continue to review elements of our Serco Management System (SMS) for Net Zero planning and have updated our Environmental (now Planet) Basis of Reporting, incorporating a base year emissions recalculation policy to support our submission to the Science Based Targets initiative.

We are disappointed to have dropped from an A- to a B for our 2023 CDP score and recognise an element of this was down to the change from operational to financial control approach and the resetting of our base year to 2022 meaning that year on year reductions and comparisons in performance were not possible.

In September 2023, our UK Aviation & Maritime Capability Director, Salli Shapcott, signed the UK Defence Aviation Net Zero Strategy Charter on behalf of Serco. The strategy outlines how the Defence Aviation sector will contribute to national Net Zero ambitions while ensuring continued operational effectiveness. "We are delighted to sign the charter as demonstration of our commitment to sustainability," said Salli Shapcott, "and look forward to further collaboration with our customers and industry partners as our contribution to this critical agenda continues to grow and evolve."

Our operations and services continue to support the decarbonisation journeys of our customers and wider society:

• In the UK we have supported the installation of a ground source heat pump, solar panels and wider energy efficiency upgrades at leisure centres.

• For the second year running we have been selected as an industry partner to support the UK maritime accelerator project which seeks SMEs with innovative solutions to join a 6-month programme to help advance the maritime industry, including decarbonisation.

• In Europe we deliver a range of Earth Observation services and in 2023 we were awarded a Contract by the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT) which will see Serco support delivery of a CO2 monitoring satellite mission. This will be the first mission to measure how much carbon dioxide is released into the atmosphere specifically through human activity using satellite data.

We are in the process of investigating a Scope 3 supply chain carbon accounting technology platform. Our objective is to achieve more precision by utilising our spend data and collaborating more with suppliers, which will help us pinpoint carbon hotspots, identify indirect carbon pricing risks and work towards reducing the carbon footprint of our supply chain.

Serco has signed the UAE Climate-Responsible Companies Pledge in support of the country's decarbonisation drive. The pledge includes commitments to carbon footprint reduction, transparent reporting on emissions, and embedding climate change mitigation and adaptation measures in businesses and operational models. Serco has also become a member of the new UAE Alliance for Climate Action (UACA) – the first of its kind, dedicated to driving climate action in the region – and supported the development of a new climate measurement tool, the UACA Greenhouse Gas (GHG) Emissions Management Platform.

We continue to mature our Serco Goes Green 'Green Ambassador' network, which supports behavioural and cultural change. Net Zero examples include:

• A UK maritime initiative using technology to reduce fuel burn by 5-10% through improved efficiency propulsion, dual fuel options and ultrasonic algal growth reduction to maintain low hull friction.

• Serco Middle East supported UACA on a project focussing on Scope 3 carbon, with a workshop launched during COP 28, for implementation in 2024.