Environmental Basis of Reporting

Transcription

1 Envirnmental Basis f Reprting Principles and methdlgies 2017

2 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 2 Cntents 1 Intrductin Apprach t Reprting Cmmitment t reprting General greenhuse gas reprting principles Assurance Envirnmental Reprting Requirements Reprting timetable Reprting Obligatins Climate Change Act Mandatry Carbn Reprting Carbn Reductin Cmmitment Energy Efficiency Scheme Methdlgy Reprting framewrk Relevance Cmpleteness Cnsistency Accuracy Transparency Cnslidatin Overview Cnslidatin apprach Facility data capture prcesses Emissin surce data capture prcesses Accuracy hierarchies Methds f estimatin Materiality Glssary... 19

3 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 3 1 Intrductin The Envirnmental Basis f Reprting utlines the scpe f each f the envirnmental key perfrmance indicatrs (KPIs) assured in ur 2016 Crprate Respnsibility Perfrmance Review and sets ut the reprting apprach and criteria required t supprt the envirnmental sectin f the Serc Grup plc Bard s cmmitment t nn-financial reprting (NFR). The reprting apprach aims t: reprt Serc s activities hnestly and give a fair impressin f business cnduct; prvide key stakehlders with apprpriate infrmatin, as guided by leading framewrks and standards; and infrm relevant investr evaluatins and indices. 2 Apprach t Reprting 2.1 Cmmitment t reprting Serc Grup plc, as a UK public cmpany, is required t disclse imprtant infrmatin in its Annual Reprt and Accunts including reprting Greenhuse Gas (GHG) perfrmance. Cmpliance with these regulatins als prvides assurance that the plc Bard is prperly addressing its scial, envirnmental and ecnmic respnsibilities twards key stakehlders; including emplyees, investrs, suppliers, custmers, cnsumers, cmmunities, gvernment and sciety. As an internatinal cmpany perating in many cuntries, the Grup als vluntarily disclses mre detailed perfrmance infrmatin. It des this primarily n its website and in its Annual Reprt and Accunts (als available frm the website). The Grup als chses t participate in a number f external indices t benchmark its perfrmance against ther cmpanies, and t answer queries frm the investment cmmunity, custmers and ther stakehlders. The Grup has a frmal apprach t nn-financial reprting (NFR) which identifies material issues and perfrmance indicatrs t enable better management and cmmunicatin f the nn-financial aspects f the business. This infrmatin is used by Executive Management t set imprvement bjectives and targets, which are als endrsed by the plc Bard. This is enabled by perfrmance management which exists at divisin, business unit and site level. 2.2 General greenhuse gas reprting principles Serc quantify and reprt greenhuse gas emissins in accrdance with ISO and the Greenhuse Gas Prtcl - A Crprate Accunting and Reprting Standard (Revised Editin 2004), and therefre will fllw the fllwing principles: Relevance Cmpleteness Cnsistency Serc will identify all GHG surces, sinks, data and methdlgies apprpriate fr the needs f ur stakehlders Every effrt is be made t include all material GHG emissins T enable meaningful cmparisns f GHG-related infrmatin, Serc will use emissin factrs prduced using the same methdlgy

4 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 4 Accuracy Transparency where pssible, and if nt, explain why All uncertainties and biases are reduced as much as pssible and explained Serc will disclse sufficient and apprpriate GHG-related infrmatin t allw intended users t make decisins with reasnable cnfidence 2.3 Assurance Assurance and data verificatin is scped and sught fr the publically reprted greenhuse gas disclsures. This is in line with gd-practice and t help build trust with stakehlders. The assurance and verificatin exercise invlves the use f an independent third party t select a sample f Serc sites and related GHG evidence t prvide reasnable assurance ver public reprting f envirnmental perfrmance.. This is t verify reprting is accurate, reliable and enable a third party t prvide an pinin as t whether the reprting prvides a fair and balanced view f the Grup s GHG emissins. The apprach includes assurance f the qualitative infrmatin detailed in the Annual Reprt and Accunt. Our assured data can be fund in the Annual Reprt and Accunts and the Crprate Respnsibility Reprt available n the Serc website: Assured indicatrs include: Relative and abslute energy cnsumptin Relative and abslute CO2e emissins frm energy cnsumed An Intensity figure - tnnes CO2e/full time equivalents (FTE) We have expanded the scpe f ur reprting in 2017 in line with best practice: Scpe 3 CO2e data relating t business travel and htel stays Scpe 2 CO2e frm bth lcatin based and market based perspective 3 Envirnmental Reprting Requirements Serc is cmmitted t respnsible stewardship f the envirnment, wherever we perate and specifically where ur activities have the ptential t adversely affect the envirnment. We aim t identify and reduce ur envirnmental impacts, by minimising the use f nnrenewable energy and ther resurces and by reflecting ur principles f sustainable develpment in ur activities. Significantly, acrss the majrity f ur business we are wrking n ur custmers' premises and are therefre nt in direct cntrl f the envirnment within which we perate. That is why cllabrative wrking with ur custmers n envirnmental issues is imprtant. Serc recgnises its respnsibility t ensure that any adverse impact n the envirnment is reduced r, where pssible, eliminated by applying the mst apprpriate management systems at cntract level - whether designed by ur custmers r by urselves. Where we are nt in cntrl f the wrking envirnment, we supprt ur custmers in applying their wn envirnmental management systems and bjectives. 3.1 Reprting timetable Frequency f reprting is dependent n the level f the business at which the peratin sits and may be determined by the metric itself, based n the timeframes n which a judgement can be made. Reprting f significant envirnmental incidents is undertaken quarterly. KPIs are calculated ver a twelve mnth rlling perid t prevent the perceptin f shrt term variatins affecting the view f perfrmance and mnitred by Divisins and cnslidated at the end f the year.

5 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 5 Reprting Timetable Reprting Type Frequency Deadline Internal reprting Divisinal quarterly reprt t Grup Executive and Crprate Quarterly 15th after each Respnsibility Cmmittee (CRC) quarter Grup Annual CR Reprt and KPI perfrmance reprting Annual 31st December Vluntary external reprting Carbn Disclsure Prject Annual 30th June Reprting bligatins Carbn Reductin Cmmitment Energy Efficiency Scheme (CRC) Reprting year Annual 1st April t 31st March CRC submissin deadline Annual 31st July Mandatry Carbn Reprting Annual 31st December 4 Reprting Obligatins 4.1 Climate Change Act 2008 The UK Climate Change Bill aims t: 1. Imprve carbn management and help the transitin twards a lw carbn ecnmy in the UK 2. Demnstrate strng UK leadership internatinally, signaling that we are cmmitted t taking ur share f respnsibility fr reducing glbal emissins in the cntext f develping negtiatins n a pst-2012 glbal agreement at Cpenhagen in The key prvisins are: 1. Legally binding targets: greenhuse gas emissin reductins thrugh actin in the UK and abrad f at least 80% by 2050, and reductins in CO2e emissins f at least 26% by 2020, against a 1990 baseline. 2. A carbn budgeting system which caps emissins ver five year perids, with three budgets set at a time, t set ut ur trajectry t Against this backdrp Serc are required t cmply with the fllwing legislatin: Mandatry Carbn Reprting (MCR) in the Annual Directrs Reprt Carbn Reductin Cmmitment Energy Efficiency Scheme (CRC) The MCR regulatins requires reprting f all scpe 1 and 2 CO2e emissins fr the cmpany including mbile, fleet fugitive and prcess emissin fr all glbal peratins while the CRC just requires CO2 emissin reprting fr all relevant electricity and gas supplies fr peratins wned r cntrlled in the UK. 4.2 Mandatry Carbn Reprting Under the Cmpanies Act 2006 (Strategic and Directrs Reprts) Regulatins 2013 all quted cmpanies are required t reprt their annual glbal carbn equivalence emissins in their directrs reprt. Therefre Serc reprts annual, glbal greenhuse gas emissins under their peratinal cntrl in the Directrs Reprts f the Annual Reprt and Accunts Data Serc are required t disclse the annual quantity f glbal emissins frm the cmbustin f fuel, r the peratin f any facility (scpe 1 emissins) and the emissins frm purchased electricity, heat, steam r cling (scpe 2). This must be reprted in tnnes f carbn dixide equivalent (CO2e), with an apprpriate intensity metric. Serc will reprt an emissins intensity figure in tnnes CO2e per FTE.

6 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 6 The reprt must: disclse the reprting perid used fr the carbn disclsure include annual data fr Scpe 1 and Scpe 2 prvide glbal cverage use carbn dixide equivalent (CO2e) factrs, such as thse published by DEFRA, which take int accunt each f the six Kyt greenhuse gases, stated in sectin 92 f the Climate Change Act 2008: reprt emissins as the intensity metric, Serc will use tnnes CO2e per FTE disclse bth the current year and the previus year s emissins State the methdlgies used t calculate the reprted infrmatin Methdlgy Serc quantify and reprt t ISO Serc has pted t use peratinal cntrl as the cnslidatin apprach due t the nature f its business, where emplyees are ften n custmer sites where n cntrl is pssible. As this will be incnsistent with the financial statement, classificatin f reprting bundaries will be described in detail Materiality Due t the diverse nature f Serc s businesses acrss its glbal peratin there are cases where Serc will cnsider greenhuse gas emitting peratins t be immaterial r de-minimis. This dcument describes in detail the rules used t ascertain materiality fr each territry and the Directrs Reprt will state what is mitted and why Cmparatives Serc benchmarks its emissins using the reprted emissins in the previus year s reprt as a baseline prviding a cmparisn t previus years in the Directrs reprt. 4.3 Carbn Reductin Cmmitment Energy Efficiency Scheme The CRC Energy Efficiency Scheme (frmerly knwn as the Carbn Reductin Cmmitment) is a mandatry carbn emissins reprting and pricing scheme t cver all rganisatins in the UK using mre than 6,000 MWh per year f electricity. Participants in the CRC are required t measure and reprt their electricity and gas related carbn emissins annually fllwing a specific set f measurement rules. The CRC scheme applies t emissins nt already cvered by Climate Change Agreements (CCAs) and the EU Emissins Trading System (EU ETS). The scheme requires participants t buy allwances fr every tnne f CO2 they emit (relating t electricity and gas), as reprted under the scheme. It is mandatry fr all cmpanies t have the data externally audited t ISO14064 standard. Serc is cmmitted t meeting its audit, reprting and purchase bligatins in line with published deadlines Data Serc disclses the annual quantity f UK emissins frm the cmbustin f natural gas supplied thrugh any meter that measures mre than 73,200 kwh in any cmpliance year (scpe 1 emissins) and the emissins frm purchased electricity (scpe 2) fr meter types 03 thrugh 08 and 00. This is reprted in tnnes f carbn dixide (CO2) using cnversin factrs f Kg CO2 per kwh f electricity and Kg f CO2 per kwh f natural gas. An Evidence Pack is prduced which cntains: Intrductin Summary f key emissins data Organisatinal structure Structural recrds i.e. the scpe f the CRC rganisatin,( key fuel types and the surce list) Data recrds i.e. annual cnsumptin f energy (invices /supplier statements, cnversin factrs t tco2) needed fr verificatin purpses. Respnsibilities Surces and sites Ftprint Reprt Annual reprt Changes and special events Special events/change recrds i.e. unusual events (actins after a meter failure, change f energy supplier, r a designated changes in cmpany structure). The recrds fr the Ftprint Year are retained fr the duratin f the rganisatin s participatin within the scheme. The Ftprint Year prvides the emissins data n which each Participant s prprtin f the revenue recycling is based. Annual recrds are kept fr the duratin f the relevant phase and fr a further five years (12 years) after the end f the phase t which they relate. If selected fr an audit, the data cllected fr

7 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 7 previus five years can be made available fr assessment Methdlgy Serc currently fllws the guidance available in the dcument CRC Energy Efficiency Scheme guidance fr participants in Phase 2 ( t ) published by the Envirnment Agency but will adpt any further changes made t the regulatins and guidance. It als uses the GHG cnversin factrs as requested by the Envirnment Agency Materiality Figure Case 1 utlines the prcess used t determine whether a lcatin is in scpe fr the CRC scheme Cmparatives Serc has been a participant in the CRC scheme since the start f phase 1. This data is used t cmpare perfrmance year n year. Data is published in ur Annual Reprt and Accunts. Case 1: Prcuring energy n a site D yu have a cntract with an energy supplier t be billed fr supply? YES Is the energy supplier yur landlrd r yur client? NO D yu pass energy csts n directly t the client based n billed meter readings? NO Are energy csts cnslidated int yur prfit and lss accunt? YES LIABLE FOR CRC NO YES YES NO EXEMPT FROM CRC EXEMPT FROM CRC EXEMPT FROM CRC But must give client cnsumptin data Find ut where the csts are actually ging and re-run analysis 5 Methdlgy 5.1 Reprting framewrk Serc use the reprting framewrk IS O :2012 fr all GHG reprting. Any variatins are stated and explained. This specifies principles and requirements at the rganisatin level fr quantificatin and reprting f greenhuse gas (GHG) emissins and remvals. It includes requirements fr the design, develpment, management, reprting and verificatin f an rganisatin's GHG inventry. This sectin details hw Serc has applied the principles f ISO in prducing its reprts fr the year. 5.2 Relevance Serc reprt n GHG surces, GHG sinks data and methdlgies apprpriate t the needs f ur business and stakehlders. This is dne by examining each facility r peratin, and establishing if Serc has cntrl f any emissin surces, and if s, whether they are material t its reprting. 5.3 Cmpleteness Serc has attempted t include all relevant GHG emissins frm primary surces. The fllwing sectins describe:

8 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 8 Greenhuse gas emissins surces Greenhuse gas emissin calculatins Emissin data capture prcesses and accuracy hierarchies Emissins excluded frm scpe Assumptins All emissins and cnversin factrs used are taken frm the relevant year s UK DEFRA Gvernment cnversin factrs fr cmpany reprting. Internatinal cnversin factrs fr electricity use are surced frm the Internatinal Energy Agency. Scpe 3 emissins have been included in 2017 in line with best practice. 5.4 Cnsistency The prcesses used by each Divisin fr capturing data abut facilities r peratinal assets and identifying changes are dcumented. The prcess fr establishing whether the facilities are within Serc s reprting bundary are cnsistent acrss all Divisins, but due t the varying nature f peratins in different territries, all decisins are dcumented and authrised by senir management. In each reprting perid after the 2013 baseline, any material changes t the rganisatin are dcumented and explained. Any significant changes in reprted emissins as a result f these changes is reprted. 5.5 Accuracy In the fllwing sectins, the methds f capturing bth facility and emissins data are dcumented fr each divisin and surce. The methds f verifying the data capture is als described Estimatin Where any estimatin is made (see sectin 6.6), the prcess used is dcumented and the ptential cnsequential errr described Assurance Serc has its CRC dataset emissins internally audited (legal requirement) by Carbn Credentials Ltd prir t submissin within the CRC Annual Reprt. In additin ur glbal GHG emissins are externally verified t ISO prir t publicatin in the Annual Reprt and Accunts, as required by Mandatry Carbn Reprting legislatin. In 2017 ur assurance prvider included business travel and htel stays within the scpe f the ISO verificatin. Furthermre ur wider scpe 3 emissin calculatins undertaken via the Quantis Scpe 3 nline reprting tl were validated by ur assurance prvider. 5.6 Transparency Serc disclses sufficient and apprpriate GHG related infrmatin t allw intended users t make decisins with reasnable cnfidence. T ensure this is the case, this dcument recrds: Internal prcesses and prcedures, hw they are used and why All material assumptins and estimatins Methdlgies and cnversin factrs 6 Cnslidatin 6.1 Overview This sectin describes the perating structure f Serc t give cntext t the Basis f Reprting Where Serc perate Serc perate in ver 1,400 lcatins acrss mre than 25 Cuntries with peratinal cntrl in mre than 350 lcatins Operating structure Figure 1 details the Business Units perating in each Divisin The sectrs we wrk in Serc perates acrss five cre sectrs: Defence Justice and Immigratin Transprt Health Citizen Services 6.2 Cnslidatin apprach Facility level definitin As a service cmpany Serc emplyees are mainly n custmer sites, therefre we classify ur facilities individually. Significantly, acrss ver tw thirds f ur business we wrk n ur custmers' premises and frequently d nt have peratinal cntrl f the facilities that are surces f GHG emissins.

9 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 9 Figure 1 Divisin ASPAC Americas Middle East UK & Eurpe Business Units Justice & Health Immigratin Transprt Defence Citizen Services Transprtatin & Infrastructure Citizen & Defence Services CMS C4ISR Natinal Security Services Canada Transprt Aviatin & Defence Health & FM Transprt Defence Health Hme Affairs Citizen Services Direct Services Therefre, Serc has chsen t use peratinal cntrl fr its cnslidatin apprach. In general, if Serc manages the peratins that will cntrl CO2e emissins, then Serc will reprt them as part f its GHG inventry. There are, hwever, exceptins; fr example the CRC Energy Efficiency Scheme requires a subset f its UK prtfli t be reprted ver a different time perid t that required fr Serc Grup annual reprting. Envirnmental perfrmance data is cllected frm ur glbal peratins n an peratinal cntrl basis. Fr health, safety and envirnmental plicies ver the facility Entity level definitin We aim t accunt fr 100% f the data frm the fllwing entities: whlly wned peratins and subsidiaries; any entities where Serc has full authrity ver perating plicies [e.g. majrity bardlevel vting rights]; and facilities that belng t ur custmers where we have been given authrity ver peratinal cntrl Operatin r facility level definitin Serc has develped a prcess (shwn belw) fr determining if a facility r entity is within its bundary f Mandatry Carbn Reprting. This has been used t evaluate all lcatins and transprt peratins. Applicability: Any element f a facility which has GHG emissins impact / cnsumptin which includes transprt peratins, building energy use, facility air cnditining r refrigeratin. Fr any such GHG impact, cnsider the fllwing: YES YES YES YES D Serc have full physical peratinal cntrl e.g.: purchase energy fr wn use; have authrity t cntrl cnsumptin; have physical cntrl ver cnsumptin Nt specified r unclear D Serc s envirnmental management plicies apply t wrking practices where the GHG impact ccurs? Nt specified r unclear D Serc s health and safety plicies apply t wrking practices where the GHG impact ccurs? Nt specified r unclear Is the GHG impact significant? e.g. ver 10 staff n custmer sites (therwise cnsidered de-minimus); r activities undertaken with GHG impact Nt specified r unclear Evaluate materiality with lcal management t assess applicability NO NO NO NO Mandatry Carbn Reprting this is defined as where Serc has cntrl as either the purchase and use f energy, r the authrity t define Include within Serc s carbn ftprint Exclude frm Serc s carbn ftprint and nte its exclusin

10 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies Operatin r facility level classificatin All facilities are assessed accrding t the classificatins shwn belw Classificatin Facility r asset type Data availability Example Bundary scpe status Reprting requirements 0 Owned r managed premises where Serc has peratinal cntrl ver emissins Data is directly available, e.g. meter readings, invices, fuel purchased, supplier data Prisns Leisure centres In Scpe Emissins are reprted fr scpe 1 and 2 and capture prcesses are dcumented 1 Leased premises with Serc held supply cntract where Serc has peratinal cntrl ver emissins Data is available fr Serc cntrlled peratin n leased premises Leased ffice accmmdatin - all cnsumptin data available In Scpe Emissins are reprted fr scpe 1 and 2 and capture prcesses are dcumented 2 Leased ffice accmmdatin - sme cnsumptin data available where Serc has peratinal cntrl ver emissins Data is partially available, e.g. sme cnsumptin under cntrl but part in service charge Leased ffice accmmdatin - sme cnsumptin data available In Scpe Emissins are reprted fr scpe 1 and 2 Cnsumptin is estimated where nt available (see sectin 6.6) Where estimatin is nt pssible, the reasn is dcumented alng with a reasnable indicatin f scale f missin Capture prcesses are dcumented 3 In serviced lease r rental accmmdatin Sub-tenancy within a larger building r wrking n a custmer s premises where Serc has peratinal cntrl ver emissins Data is nt available, e.g. all cnsumptin in service charge Cmpanies Huse (Cardiff) In Scpe Cnsumptin is estimated fr scpe 1 and 2. Estimatin prcess is dcumented. Where estimatin is nt pssible, the reasn is dcumented alng with a reasnable indicatin f scale f missin Capture prcesses are dcumented 4 Staff placed n Gvernment, military r transient facilities perfrming directed tasks Wrk cnducted amngst public Serc are nt in cntrl f perating plicies and therefre excluded frm MCR reprting Data nt available. Cnsumptin and emissins are under the cntrl f the custmer. These are either paid directly by the custmer r Serc pay n behalf f the custmer Serc staff wrking within custmers plices UK RAF bases JSCSC Nt in scpe Descriptin f situatin with reasn fr decisin dcumented fr external audit

11 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 11 Classificatin Facility r asset type Data availability Example Bundary scpe status Reprting requirements 5 Serc managed facility where staff are perfrming simple ffice r manual activities with n emissin intensive activity De-Minimis <10 staff with n unusual emissin activity Americas Driver Examinatin Centres In scpe but excluded as immaterial Brief descriptin f situatin with reasn fr decisin dcumented 6 Jint Ventures where Serc d nt have authrity t set envirnmental plicies gverning energy use in greenhuse gas emitting facilities Nt relevant Mersey Rail Nt in scpe Brief descriptin f situatin with reasn fr decisin dcumented 7 Jint Ventures where Serc has authrity t set envirnmental plicies gverning energy use in greenhuse gas emitting facilities Data is directly available r partly available, e.g. meter readings, invices, fuel purchased, supplier data ATS Bahrain In Scpe Emissins are reprted fr scpe 1 and 2 Cnsumptin is estimated where nt available (see sectin 6.6) Where estimatin is nt pssible, the reasn is dcumented alng with a reasnable indicatin f scale f missin Capture prcesses are dcumented 8 Staff in custmer facilities. Serc staff have authrity t set envirnmental plicies gverning energy using greenhuse gas emitting facilities Data nt available fr all r part f a cntract. AMEAA immigratin centres In Scpe Data fr the cntract is estimated. Estimatin prcess dcumented. Where estimatin is nt pssible, the reasn is dcumented alng with a reasnable indicatin f scale f missin 9 Facility last used befre start f reprting perid (1/10/2012) Data nt required PECS - Chelmsfrd Nt in scpe N reprt required, lcatin inactive befre 1st MCR reprt 10 Additinal cntract n a facility that is already reprting all emissins fr the facility and Serc staff have n authrity t set envirnmental plicies gverning energy use in the facilities Data nt required, but headcunt included in facility ttal Healthcare cntract in custdial centre Nt in scpe Evidence that facility is utside f reprting bundary dcumented

12 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 12 Classificatin Facility r asset type Data availability Example Bundary scpe status Reprting requirements 11 Owned r leased assets where Serc is the lessee, e.g. vehicles r vessels Data is directly available, e.g. fuel card data, tankered deliveries Serc UK car fleet, Nrthlink ferries In Scpe Data t be captured fr scpe 1 12 Serc perated assets wned by custmer. Data is nt directly available, e.g. supplied by custmer Data nt directly available, e.g. fuel supplied by custmer Vehicles r vessels that Serc perate where fuel supplied by custmer In Scpe Cnsumptin is estimated fr scpe 1. Where estimatin is nt pssible, the reasn is reprted alng with reasnable indicatin f scale f missin 13 Serc perate n assets wned by custmer and under the peratinal cntrl f the custmer Serc staff wrk under custmer plicies Internatinal Nuclear Services vessels Nt in scpe Evidence that facility is utside f reprting bundary dcumented 14 Owned r managed premises Data availability transferred t r frm custmer during reprting perid HMP Dncaster, where custmer tk cntrl f utility purchase n 7/4/13 In Scpe Data t be captured fr scpe 1 and 2 fr perid where Serc had cntrl. Data is estimated fr remaining perid and estimatin prcess is dcumented Facilities where wnership r envirnmental management transferred t r frm custmer during reprting perid N Staff n client facility. Serc are paying energy invices as a service t the custmer but have n peratinal cntrl ver emissins Data available, partly available r nt available N data available r required Laburnum Huse transfer t SunGard Feb 2013 JSCSC residential premises In Scpe Nt in scpe Fr perid f Serc wnership: Data t be captured r scpe 1 and 2 Cnsumptin is estimated where nt available (see sectin 6.6) Where estimatin is nt pssible, the reasn is dcumented alng with a reasnable indicatin f scale f missin Capture prcesses are dcumented Brief descriptin f situatin with reasn fr decisin t be dcumented

13 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies Facility data capture prcesses Methd f capturing lcatin and asset data The primary methd is based arund the bid r rebid prcess where ptential new r changing prtfli f facilities are added t the cntract master database. In additin, a number f secndary mechanisms are in place and where additinal lcatins are identified, they are added t the cntract master database. These include: SAP Invice data capture prcess (see UK utility capture prcess fr mre detail) Acquisitins & Divestments prcess Ntificatin f new suppliers by prcurement Prvisin f peratinal supprt by Envirnment, Energy & Sustainability Team Serc s in-huse Facilities Management Services Team updates Prperty Manager updates Fr the UK, identified lcatins are added t the cntract master database and Carbn Management GSOP classificatin register maintained by the crss divisinal Envirnment, Energy and Sustainability team, supprted by the Management Infrmatin & Reprting and Assure teams. Requests fr additinal infrmatin are sent t cntract management, the prperty and/r HSE Team. Once infrmatin is verified it is added t the cntract master database. Due t the high number f cntracts and lcatins where emissin surces have been identified within the divisin, the infrmatin held within the cntract master database changes regularly; as such, regular maintenance is required and all stakehlders have a respnsibility t ensure updates are prvided t the Grup Head f Envirnment, Energy and Sustainability and Management Infrmatin (MI) and Reprting team. The mechanisms used t identify new cntracts are als used t identify changes in lcatin infrmatin and in such cases details are prvided t the divisinal Management Infrmatin and Reprting teams t update the cntract master database. Where infrmatin is missing reminders are sent t the wners f each set f data. Change reprts summarising updated infrmatin in the perid and gaps in the infrmatin are cllated by the Management Infrmatin and Reprting team and circulated mnthly t all stakehlders. Fr Americas, the prcess fr deciding which lcatins are in scpe and which are nt begins with a listing f all sites that is extracted frm Serc Americas accuntable financial system, the Cst Pint database. The listing f sites is then reviewed t exclude thse sites which are exempt per apprved classificatins. Fr example, many Serc Americas wrksites are exempted frm reprting because they ccur n military installatins r vessels where Serc des nt have financial r peratinal cntrl ver emissins surces. Fr Middle East and ASPAC, a full review is undertaken annually with all cntracts cnfirming and prviding data abut each facility, the Carbn GSOP Cntract Classificatin register will capture this data. Data held by lcatin includes: Site name and full address Divisin Business Unit Sub-Business Unit All MPANs/MPRNS fr the facility All pst-cdes (r equivalents) suppliers use fr delivery t a facility; it is nt unusual fr a tankered il supplier t use a different pstcde t an electricity supplier fr a large facility such as a prisn Activities that cause emissins Lcatin status (lease, freehld) Data f last invice fr each emissin if relevant Determinatin f whether facility is in scpe fr CRC and MCR with reasns if necessary Operatinal cntrl fr MCR with explanatin and authrity Classificatin f inclusin fr CRC with explanatin and authrity Significant events Serc s internal HSE database (Assure) has been develped t hld and maintain all glbal facility data frm It will be maintained mnthly by Divisins, and reviewed quarterly by the UK Envirnment, Energy and Sustainability Team. This will lead

14 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 14 t clearer and mre transparent reprting. Verificatin Cntract Data prvisin f details relating t the rganisatin and peratin f the cntract is the respnsibility f the Cntract Manager; this includes a nminated pint f cntact fr prvisin f further infrmatin relating t envirnmental management within the cntract. Envirnmental data this includes sme infrmatin captured frm existing surces as well as specific infrmatin required under the Carbn Management Grup Standard Operating prcedure (SMS-GSOP- HSE1-26 Carbn Management). The respnsibility fr the capture and verificatin f this infrmatin sits with the Envirnment Energy and Sustainability team in the UK, the Assurance Teams in ASPAC and Middle East, and the Engineering and EHS team in Americas. Infrmatin will generally be btained thrugh discussin with the identified pints f cntact fr each cntract and is signed-ff as a true, accurate and cmplete set. Once facility data is signed ff by the divisinal leads it is reviewed by the Envirnment, Energy and Sustainability team. 6.4 Emissin surce data capture prcesses Emissin surces Data mining scanned images f electricity, natural gas, tanker delivered fuel invices. This is the primary methd f capturing cnsumptin infrmatin. A list f all vendrs is maintained by the SAP team and validated by the Envirnment, Energy and Sustainability team t ensure cmpleteness and accuracy. Each Divisin using new vendrs updates regarding supply vendrs. Invices fr all knwn utility suppliers that are paid via the Serc financial system SAP are extracted and inspected by a dedicated team t capture: MPAN/MPRN r pstcde fr tanker delivered fuels KWh/litre/Kg/Metric tnnes/mjules Units Cst Levies, e.g. Climate Change Levy in the UK invice perid r delivery date Lcatin data is checked and, fr new facilities, identified by business name and full address. This prcess frequently identifies new lcatins that have purchased utilities but have nt yet been captured by the prcess dcumented in the Facility Data Capture Prcess as dcumented abve. These are reviewed and added where apprpriate r identified as an instance where Serc pay as a service n behalf f a custmer. Data supplied by suppliers (UK) Serc's largest supplier f electricity and gas prvides access t kwh data electrnically. Billing summary reprts are likely t replace the invice derived data cmpletely where pssible in Autmated Meter Reading (AMR) AMRs have been installed acrss the majrity f the UK Leisure prtfli where AMR data is recrded and analysed fr errr using in-huse prprietary data management sftware. Over 80% f gas cnsumptin fr the remainder f the UK, where Serc have peratinal cntrl, have AMR installed. Fr electricity, mre than 80% f cnsumptin is thrugh half hurly metering, althugh this cnstitutes less than 10% f lcatins. Manual Meter Reading UK Leisure sites have a paper recrd t cmplete gas and electricity readings that are taken at a set time each day. These are then transpsed t a centrally held utility spreadsheet t capture cnsumptin, cst and lcatin infrmatin. The centrally held spreadsheet is then manually errr checked in relatin t: Significant cst variance (vs. previus and benchmark perids) Significant cnsumptin variance (vs. previus and benchmark perids) This data is cmpared t data received frm AMRs. Any variances are investigated n the same day. Shuld meter readings n any day exceed a pre-determined bundary,

15 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 15 s are sent t the lcatin manager wh must investigate. Estimatin Fr ffice accmmdatin, where cnsumptin data is nt available, it is calculated by using the number f Full Time Emplyees (FTE) fr the facility cmpared t knwn cnsumptin figures f similar facilities, r ccupancy figures where apprpriate. Verificatin UK basis f estimatin has been refined t ensure ffice sites use ffice benchmark, light industrial and prisn etc. Americas use the UK Basis f Estimatin using lcal data. In Australia, Peple in Detentin (PID) figures are added t the FTE figures t prvide a mre rbust estimatin methdlgy. Data mining scanned images f invices The capture spreadsheets cntain varius errr checks such as kwh against cst range checking, cmparing calculated climate change levy csts t kwh cnsumptin and MPAN and MPRN checks against lcatin data. Once captured data is cmpared using Assure tls and when the external verificatin t ISO happens, a sampling plan is prduced requiring the invices cvering 10% f cnsumptin t be checked. Data supplied by the suppliers electrnically is used t verify the cnsumptin data captured frm invices. Data supplied by suppliers Data supplied electrnically by suppliers is assumed t be crrect, althugh n rare ccasins cmparisn t invice data has presented anmalies which are then reslved thrugh investigatin. Frecurt purchased vehicle fuel Fuel Card purchased fuel The vast majrity f frecurt fuels purchased fr UK and Eurpe vehicles use a centrally cntrlled cmmercial fuel card. As this is directly inviced back with individual purchase item infrmatin this data is cnsidered as clse t 100% accurate as is pssible. In 2016, mre peple mved t purchasing fuel withut a fuel card. The fllwing prcesses describes hw this data is prcessed: Watsn Fuel prvide mnthly data t the Serc Fleet Management System. Out f this a mnthly reprt is prvided listing fuel card number, date purchased, grss and net cst, litres purchased, type f fuel, cntract and divisin, and vehicle type and driver where knwn. Fr nn-cmmercial vehicles, cmpany car drivers are required each mnth t enter details f each business trip made during the mnth including start and end pint, reasn and date int an SAP prtal. The driver als has t enter the start and end dmeter reading fr the vehicle fr the mnth. This data is then authrised by the driver s line manager. The data is then extracted via a reprt fr matching against the litres purchased data. If n business mileage is entered fr a cmpany car, it is assumed all litres purchased were fr private use and are excluded. The litres purchased data fr each vehicle has a business /private mileage rati applied s that the number f litres used fr business in the mnth can be determined. Fr the cmmercial vehicles in the fleet, it is assumed that all fuel cnsumptin is fr business use Nn fuel card purchased infrmatin Business mileage fr reimbursement is entered int SAP Serc Fleet department prduce a reprt shwing business mileage and the types f vehicle fr all ECO drivers Verificatin All data is prepared by Divisinal leads, the Assure Manager and the Envirnment, Energy and Sustainability team. All data is included in the external verificatin t ISO and randm requests fr data are requested and checked. Once all data is cllated, it is visually inspected fr any bvius anmalies befre sign ff by the Head f Envirnment, Energy and Sustainability. Fugitive Emissins Estate wide estimatin Estimatin based n peratinal knwledge f estate and likely refrigerant requirements tp up and recharge nly. Assumptin made n refrigerant type.

16 Increasing data accuracy Increasing data accuracy Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 16 Verificatin Verificatin is cnfined t cnfirmatin f facility data and cnfirmatin as reasnable by the external ISO verifiers. 6.5 Accuracy hierarchies The accuracy hierarchy fr scpe 1 and 2 building energy is shwn n the right. While AMR data is assumed t be the mst accurate, it is nt available fr the majrity f Serc s electricity and gas meters. Sme suppliers ffer cnsumptin data withut csts, s invice data is used t supplement. Lcal meter reads are used in a small minrity f cases with lcal management sign ff and auditing. In mst cases, they are taken t verify AMR t supprt real time EMS management systems. All tanker delivered fuel data is captured frm invices. Over 95% f frecurt purchased fuel in the UK is by fuel cards, and is reprted t Serc mnthly. At the same time, when ur peple use their vehicles fr private mileage they recrd the ttal mileage and business mileage mnthly, allwing a rati f business mileage t private mileage t be calculated befre applying DEFRA cnversin factrs Thse emplyees withut fuel cards recrd their business mileage each mnth in SAP. DEFRA guidelines fr emissins by vehicle types per km are used t calculate CO2e. Data hierarchy pyramid fr Building energy Data frm AMRs Lcal meter reads Capture frm utility invices Estimatin r calculatin frm adjining invices Estimatin based n FTE cunts in similar facilities Data hierarchy pyramid fr Transprt fuels Utility invice data is used t capture the majrity f cnsumptin fr UK, Americas, ASPAC and Middle East. Billing summary reprts will be used as primary evidence increasingly in the future (derived directly fr billing, ften AMR). Tanker delivered fuel data captured frm invices Fuel purchased thrugh fuel cards with detailed mileage capture Where data is nt available fr a shrt perid, such as when a single invice is nt received, the value is calculated using the estimatin techniques described in the Estimatin sectin. Expense claimed business mileage and Defra CO2e rate fr vehicle type per km DEFRA public transprt rate per passenger mile used Where cnsumptin data is nt available, a Basis f Estimatin is used t estimate cnsumptin using FTE rates r in the case f detentin centres, FTE plus Peple in Detentin (PID) rates. The majrity f Serc delivered fuel is by tanker, and is used fr marine, rad transprt and heating. Marine Gas Oil is delivered by the metric tnne t tw decimal pints and the remainder by litre.

17 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies Methds f estimatin Emissin Surce Methd Electricity and natural gas Estimatin based n FTE There are a number f facilities where Serc staff wrk in premises where we have cntrl ver the cnsumptin but n r partial sight f the cnsumptin because they are wrking in facilities where the energy cnsumed is part f a service charge. In such cases, the fllwing prcess is used: Electricity and natural gas cnsumptin is captured and verified fr several majr UK facilities (all f prtfli type, ie direct services depts r prisns). The average FTE figure fr the reprting year is used t calculate an energy cnsumptin figure fr electricity and natural gas per FTE. This figure is used fr all ffice accmmdatin where the true cnsumptin figure is unavailable. Gaps in supply data Where data is captured frm invices, there can ccasinally be a gap fr a time perid which must be calculated. If it is frm a supplier that supplies data electrnically, then this gap shuld already have been reslved, but where this des nt help then the fllwing appraches are used in the fllwing rder: Fr electricity, the meter readings frm the previus 3 mnths are used t accurately calculate the cnsumptin; this apprach is dcumented in the MCR Summary Spreadsheet. Fr natural gas, meter readings frm either side are used t derive the number f units cnsumed and then the frmula in the preceding invice can be used t accurately calculate the kwh cnsumptin; this prcess is dcumented in the MCR Summary Spreadsheet. Where the abve methds are nt pssible, either at the start r end f a reprting perid r where a meter has been changed (ften when the supplier changes), then the cnsumptin must be estimated. Fr electricity where cnsumptin is typically flat, an average ver several mnths is used and dcumented in the MCR Summary Spreadsheet. Fr Gas, seasnality is taken int accunt. Occasinally, suppliers prvide n invice in summer mnths, where there is n supply, and this is checked and nted. Otherwise, an average taken ver a year, r using the previus year s trend, is used depending n which seems mst apprpriate; this prcess is dcumented in the MCR Summary Spreadsheet. Frecurt fuels Fugitive emissins GHG cnversin factrs Serc use the latest cnversin figures each as year recmmended by DEFRA. Ntes, calculatins & assumptins Outlined in Serc s MCR Summary Spreadsheet tab.

18 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies Materiality Weighted average emissins Serc has decided t set its materiality threshld at 5% fr UK and Eurpe and 10% fr Americas, ASPAC and Middle East, resulting in an verall level f belw 5% Exclusins There are a number f ptential emissin surces that Serc have decided are immaterial and s are nt included its MCR reprt, as capturing the infrmatin wuld utweigh the value f reprting the GHG impact and is cnsidered t be well belw the materiality threshld f 5%. These include: Fugitive emissins frm Middle East, Nrth America and ASPAC. A small amunt f fuel is purchased by the driver fr ther reasns including filling f hire cars, waiting fr the issue f a fuel card, r emergencies. Several examinatins f expenses resulting frm these cases have shwn the amunt t be de-minimis and are nt reprted. Previusly these included: mileage in hire cars claimed as persnal expenses Business mileage in private cars claimed as persnal expenses Instances where fuel csts are claimed, as ppsed t mileage Cnversin factrs, calculatins and Intensity Metrics Cnversin factrs Emissin factrs relevant t each year will be applied, using the latest DEFRA cnversin factrs and the Internatinal Energy Agency, where apprpriate, fr verseas electricity. These have been updated during Q4 f each calendar year in readiness fr end f year reprting, MCR and CDP. This apprach is cnsistent with gd reprting practice and is the methdlgy applied in the Crprate Respnsibility Reprt and the Annual Directrs Reprt. All reprting uses carbn dixide equivalents, including the glbal warming ptential f all six Kyt greenhuse gases, stated in sectin 92 f the Climate Change Act 2008, these being: Carbn Dixide, Methane (CH4), Nitrus Oxide (N2O), Hydrflurcarbns (HFCs), Perflurcarbns (PFCs) and Sulphur hexafluride (SF6). All cnversin factrs are updated in Assure, allwing mre accurate cnversins t be applied fr internal and external reprting. Intensity metrics Serc uses the intensity metric tnnes CO2e/FTE.

19 Serc Grup plc Envirnmental basis f reprting 2017 principles and methdlgies 19 Glssary CCA CH 4 CO 2 CO 2e CRC ECO EMS EU ETS FTE GRMSC GSOP GWP HSE HFCs KPI kwh MCR MWh N 2O NFR PFCs PID SF 6 SRC SPOC Climate Change Agreement Methane Carbn Dixide Carbn Dixide equivalence Carbn Reductin Cmmitment Energy Efficiency Scheme Emplyee Car Ownership Scheme Envirnmental Management System EU Emissins Trading System Full Time Emplyee Grup Risk Management and Safety Cmmittee Grup Standard Operating Prcedure Glbal Warming Ptential Health, Safety and Envirnment Hydrflurcarbns Key Perfrmance Indicatrs Kilwatt hurs Mandatry Carbn Reprting Megawatt hurs Nitrus Oxide Nn Financial Reprting Perflurcarbns Persn in Detentin Sulphur hexafluride Safety, Risk and Cmpliance Single Pint f Cntact