Planet

Protect our business from the impact of climate change and give back more to the planet than we take out.

Fundamentally we believe that embracing sustainable practices leads to a better corporate culture, more reliable products and greater long-term profitability. We have long been conscious of our impact on the planet and have recently embedded the five sustainability pillars into the heart of our business strategy. 

2020 Emissions Offset Baseline – by the Carbon Trust

DLG Operational Control

Our 2020 progress against our new 2019 baseline represents our most transparent emission reporting to date. In 2020 we were able, for the first time, to break out our Scope 1 and Scope 2 emissions into separate performance figures across our office sites and accident repair centres, and disclose a Scope 3 footprint with greater clarity of the activities under our direct control. Emission results reported below are all related to UK operations

We comply with the Companies Act 2006 (Strategic and Directors’ Report) Regulations 2013 and apply the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) which includes emissions associated with electricity consumption using both the Location-based Scope 2 and Market-based Scope 2 calculation methodologies.

See the Carbon Trust Assurance Ltd Assurance Statement here

 

OFFICE SITES

AUTO SERVICES

TOTALS

TONNES CO2e

Scope 1

1,432

6,819[1]

8,251[1,2]

Scope 2

Location-based

2,176[3]

Market-based

0

Location-based

1,710[3]

Market-based

0

3,886
 

Total (Scope 1 & 2) (tCO2e)

3,608

 

 

8,529

12,137

 

Scope 3 Under our direct control

Fuel and energy related activities

2,332

Waste generated in operations

413

Business travel – Air travel

198

Business travel – Hotel night stays

75

Business travel – Rail

63

Employee commuting[2]

1,450

Upstream leased assets[3]

63

Upstream transportation and distribution of auctioned vehicles 625

Total (tCO2e)

5,219

DLG Operational Control Carbon Footprint

 

Scope 1 and 2 (tCO2e)

12,137

Scope 3

5,219

Total (tCO2e) 17,356

Notes:

 1. The 2019 Scope 1 total of 9,399 CO2 e differs from our previously reported figure of 7,365 CO2 e in the 2019 Annual Report and Accounts as it now includes emissions from additional vehicles used during repairs, courtesy car fuel usage and vehicles that are company funded, which had not previously been tracked.
2. Employee commuting is based on UK national averages, not actual individual methods of transport of Direct Line Group employees commuting. This data is not currently tracked.
3. Upstream leased assets refer to leased office space locations where Direct Line Group does not directly control the energy provision as it is included in the service agreement.
4. Scope 1 and 2 emissions verified by the Carbon Trust.
5. Scope 3 emissions calculated by the Carbon Trust.
6. In ac tent/dam/dlg/corporate/Documents/investor-pages/DLG 2019 preliminary results analyst presentation FINAL 3 March.pdf cordance with the GHG Protocol under which we report, the following are excluded from the Scope 3 total:
    a. operational control activities already detailed in the main table ‘Scope 3 under our direct control’;
    b. cash payments to customers or other insurance companies / legal     firms as compensation;
    c. intragroup transfers between our operating companies for financial accounting purposes as the actual purchase of goods and services to our     third party suppliers is already captured; and
    d. reinsurance costs to third party reinsurers as this is a financing transaction; and investments.Notes: 1. The 2019 result differs from the Group’s TCFD 2020 report published in December 2020 as a result of a reclassification of 320 tCO2e from upstream leased assets (Scope 3 under our direct control) to Scope 1 auto services. 2. The 2019 Scope 1 total of 9,719 CO2e differs from our previously reported figure of 7,365 CO2e in the 2019 Annual Report and Accounts as it now includes emissions from additional vehicles used during repairs, courtesy car fuel usage and vehicles that are Company funded, which had not previously been tracked. The 2020 result includes these emissions. 3. Figures for Scope 2 use standard location-based methodology. We follow GHG Protocol to disclose both location and market-based figures; and as we have secured our energy from 100% renewable sources since 2014, our Scope 2 market-based results are nil. 4. The 2019 Scope 2 total of 6,609 CO2e differs from our previously reported figure of 6,567 CO2e in the 2019 Annual Report and Accounts following recalculation. 5. Employee commuting is based on UK national averages, not actual individual methods of transport of Direct Line Group employees commuting. This data is not currently tracked. 6. Upstream leased assets refer to leased office space locations where Direct Line Group does not directly control the energy provision as it is included in the service agreement. 7. Prior to 2019, the emissions used in the calculation of the intensity metric excluded emissions from additional vehicles used during repairs, courtesy car fuel usage and vehicles that are Company funded, as these were not previously tracked. The 2019 result has been re-presented accordingly (reported as 4.7 in the 2019 Annual Report and Accounts). The 2020 result includes these emissions

 

Commit to tangible actions

We have committed to set Science-Based Targets for Scope 1, 2 and 3 emissions within the two-years timeframe set out by the SBTi. On Scope 1 and 2 emissions, we intend to set a target that enables us to play our part in holding off some of the worst climate impacts by limiting the global temperature rise to no more than 1.5°C above pre-industrial levels.

Offset while we reduce

We know that it will take time to reduce our emissions so in the meantime we have made a long-term commitment to be a 100% carbon neutral business by offsetting Scope 1 and 2 emissions as well as the elements of our Scope 3 emissions which are under our direct control.

This year we achieved carbon neutrality by working with ClimateCare who has over 22 years of experience in project development, carbon asset development, and delivery of corporate carbon programmes.

Over the next three years we are funding carbon offsetting projects which will also deliver high social impact benefits in three countries.

Our journey to net zero

Each year we will become less reliant on carbon offsetting to achieve net zero. Through our “Greener, Cleaner Action Plan” we aim to mitigate our impact on climate change:

  • Offices: Reimagining the way we work by investing in energy-efficient features, encouraging flexible working, improving recycling rates, continuing to use 100% renewable electricity and ensuring 100% of office waste is diverted from landfill. 
  • Accident repair centres: Aiming to be the most energy-efficient repair network in the UK by investing in our estate and repair processes. 
  • Green Flag: Reducing mileage and supporting sustainable transport through efficiency initiatives, such as optimising our roadside fix rate to reduce our mileage and tow fewer vehicles. 
  • Our supply chain: Extending our reach by calculating and disclosing our Scope 3 purchased goods and services emissions and exploring how we can work with individual suppliers to drive lower emissions. 
  • Our customers: Supporting green choices by conducting customer market research to explore attitudes to insurance

Our investments: moving climate up the agenda

  • 100% of our portfolio will be net carbon neutral by 2050 
  • Corporate bond portfolios are committed to a 50% reduction in weighted average greenhouse gas emission intensity by 2030 
  • A preference for companies with carbon reduction targets approved by the Science Based Targets initiative 
  • A preference for companies with at least a 2°C carbon performance alignment with the Transition Pathway Initiative 
  • The exclusion of any companies with a carbon transition score indicating assets could be economically stranded 
  • The exclusion of any mining companies that generate >5% of revenues from thermal coal production and electricity generators that derive >5% of revenues from thermal coal power generation (unless, in either case, the company has an approved Science Based Targets initiative plan) 
  • The exclusion of any companies that are developing new thermal coal mines or coal burning power plants 
  • Ensuring all of our investment-grade corporate bond portfolios maintain an average MSCI ESG rating of ‘A’

 

 

Continuing to invest in energy reduction
measures

This year the Group continued to invest in energy efficient measures with over £2 million invested in our office estate including:

  • New electric air conditioning systems in our Bromley office enabling a reduction in gas usage and better maintainability
  • Installation of LED lighting and new power systems in our Birmingham and Glasgow offices which could lead to a 50% reduction in electricity use

This year the Group was also awarded the ISO 14001 accreditation by the Lloyds Register Quality Assurance body for our office management – an internationally agreed standard that helps organisations improve their environmental performance.

We have also continued to invest in our auto services sites catering for their individual energy efficiency needs:

  • Installing a new air conditioning system in our Peterborough site allowing for more accurate temperature control, alongside a reduction in electricity usage compared to conventional units
  • Training technicians in new repair techniques which reduce the need for repair materials and reliance on paint spray booths
  • New LED lighting in our Weybridge site enabling energy savings of up to 60%, a reduction in maintenance costs over a projected lifespan of 10 to 20 years
  • Two new dual electric car charging points in our Birmingham site preparing for the rise in electric vehicle usage

Our offsetting projects

Over the next three years, we will offset those emissions we can’t yet avoid through projects that cut carbon emissions whilst also delivering tangible benefits to local communities and environments in three countries: 

Rainforest protection, Brazil: Our funding will support efforts to prevent unplanned deforestation across 350,000 hectares of the Portel micro region, through training and educating local communities in alternative agroforestry methods. By opening up new economic opportunities, the project is reducing slash and burn agriculture, which has been one of the largest contributors to deforestation. The project is also providing access to official land titles for native families and is protecting more than 30 vulnerable species. 

Water filters, Kenya: Our funding will support the distribution of safe water filters for families. As well as delivering health impacts, the project also reduces the need for people to boil water to make it safe to drink, which requires the burning of unsustainable energy sources such as wood or charcoal. This reduced reliance on fuel reduces family expenditure and reduces pressure on forests, as well as cutting carbon emissions. 

Clean cookstoves, Bangladesh: Less than 20% of Bangladeshi households have access to clean cooking, instead using traditional “three-stone” fires, contributing to approximately 49,000 premature deaths a year. Our funding will support entrepreneurs to produce, manufacture and distribute the “bondhu chula”, a clean cookstove designed for an efficient burn to reduce fuel use.

Year  ("GHG") emissions
 2020 12,137
 2019 16,328 
2018 16,669
2017 17,399
2016 19,315
2015 22,611
2014 27,308
2013 29,127



Disclose to track progress

We have always challenged ourselves to reduce emissions and energy consumption across the business through greater transparency. We exceeded our 2020 targets set in 2017 against a 2013 baseline and now intend to hold ourselves to account against a new 2019 baseline.

We comply with the applicable greenhouse gas reporting requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and apply the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) to calculate our emissions, which includes emissions associated with electricity consumption using both the Location-based Scope 2 and Market-based Scope 2 calculation methodologies. We monitor the intensity metric of emissions per £ million of net earned premium as a measure of how efficiently we provide our insurance products (see page 61 of the Annual Report and Accounts 2020). We also engage with the Carbon Disclosure Project (“CDP”) and recently maintained a ‘B’ rating based on 2019 activity.

We have always published our Scope 1 and 2 emissions, but this year we wanted to go further by breaking down our emissions across our offices and our accident repair centres and by publishing our first TCFD report (see page 62 of the Annual Report and Accounts 2020). We also began the process of evaluating our Scope 3 emissions starting with those under our direct control (such as waste disposal and business travel) and purchased goods and services. Plans are underway to evaluate the final part of our Scope 3 emissions, and our investment portfolio in 2021.

Carbon Disclosure Project

The Group has taken meaningful steps to reduce its carbon emissions. The Group communicates the details of its carbon management programme through the Carbon Disclosure Project. Further details of the Group’s rating can be found here.

ISO 14001 certification

The DLG Environmental Policy is approved by Senior Management and the Board of Directors are fully committed to ensure that we deliver on our environmental commitments under our Planet pillars.  We achieved accreditation to the ISO 14001 Environmental Management System for the DLG offices in 2020, an international standard – and confirmed by external auditors.  Our environment management system provides a framework to help us oversee our environmental responsibilities efficiently and meet our targets.  The main benefits of the accreditation is that it enable us to take a strategic approach to improving our environmental performance and to comply with our environmental regulatory duties.

In summary, accreditation to the ISO 14001 standard enable us to:

• Demonstrate compliance with current and future statutory and regulatory requirements

• Increase leadership involvement and engagement of employees

• Improve company reputation and the confidence of stakeholders through strategic communication

• Achieve strategic business aims by incorporating environmental issues into business management

• Provide a competitive and financial advantage through improved efficiencies and reduced costs

• Encourage better environmental performance of suppliers by integrating them into the organisation’s business systems.