We view the climate emergency as a race to find solutions. Across the business we are focused on climate risk mitigation and playing our part in accelerating the transition to a low carbon future. There are three steps to our plan.
Disclose to track progress
We have done a lot of work to understand where the most carbon intensive areas of our business are because only by understanding and reporting our carbon footprint can we find solutions.
Our track record is good, we have:
- Reduced our energy consumption by a third since 2013.
- Procured 100% renewable electricity for our operations since 2014.
- Diverted 100% of our office waste from landfill.
We now want to go further, which is why we report our office, accident repair centre and supply chain emissions to guide our carbon reduction strategy.
Find out more about this in our Climate Change Action Report .
Commitment to tangible actions
We have committed to set Science-Based Targets for Scope 1, 2 and 3 emissions via the Science Based Targets initiative (SBTi) and this year joined the Race to Zero because we recognise our role in taking a leadership position as we reduce emissions. It means we will set targets in line with a 1.5°C emissions scenario where we are aiming to achieve net zero emissions by 2050 at the latest.
Establishing Strategic Management Actions
Alongside target setting we have also established the following Strategic Management Actions which business areas are now prioritising:
- Electric vehicles – improving our capability and understanding to support the transition to EVs.
- Supply chain – implementing a Supply Chain Sustainability Programme to engage and influence suppliers.
- Flood resilience – influencing policy makers on the importance of flood defences and shaping thinking around resilient repairs.
- Underwriting footprint – evaluating the impact of climate change on our underwriting footprint so that we can manage risks to our business and help inform strategic decision-making.
Our approach in action
All of our rescue recovery trucks at our Birmingham Auto Services site are now running off hydrogenated vegetable oil (HVO). This test and learn project is aiming to reduce our well-to-wheel carbon emissions from diesel by more than 80%. If successful we plan to roll out this alternative fuel across other Auto Services sites.
Making electric easy
Our Direct Line brand is working to make electric easy for our motor insurance customers, that’s why we are offering all new business customers access to a bundle of electric vehicle essentials as well as insurance that covers batteries and charging cables*. The bundle includes discounted access to public and community charging, home charger installation, help with grants, and discounted parking for electric vehicles. Our customers also benefit from our repair expertise via our network of body shops.
*One bundle per Direct Line motor policy, available to new customers only who buy between 28/10/2021 and 31/10/2022. Free bundle provided by Zoom EV for 12 months from activation and validation of Zoom EV account.
Giving back to the planet
This year we became a supporter of the Get Nature Positive campaign where we will play our part, alongside other likeminded companies, to restore nature and biodiversity. We also announced a partnership with the nature recovery charity Heal, providing a £3 million loan facility that can support the purchase of their initial two sites.
Offset while we reduce
We know that it will take time to reduce emissions and facilitate the transition to net zero, whilst we enhance our approach to sustainability across the Group and set Science-Based Targets. Last year we took the step to become a carbon neutral business by offsetting our Scope 1 and 2 emissions as well as elements of our Scope 3 emissions under our direct control by partnering with ClimateCare, an organisation that is dedicated to tackling climate change and improving lives by financing, developing and managing carbon reduction projects across the world. From November 2020 to November 2023, we’ve pledged support to carbon offsetting projects which will deliver high social impact benefits to communities and environments in three countries
Notes: 1. Total Scope 1 and 2 emissions. The 2020 result of 11,697 tCO2e differs from the reported result of 12,137 tCO2e in the 2020 Annual Report and Accounts following recalculation.
2. 100% of the GHG emissions and energy consumption reported relates to operations all of which are based in the UK.
3. Data is reported in compliance with the SECR requirement to disclose annual global GHG emissions and annual global energy consumption (see page 87).
4. Reduction in energy consumption is reported on a like-for-like basis
Group emissions We believe accurate measurement and transparency can guide the business in making targeted interventions as part of our carbon reduction strategy. We implemented a number of test and learn activities, and continue to innovate and explore a range of solutions. We have provided a comparison of emissions data for Scope 1, 2 and 3 with greater clarity of the activities under our direct control, as well as our supply chain emissions. 100% of the emissions reported relates to operations all of which are based in the UK. The data is reported in compliance with the SECR requirement to disclose annual global GHG emissions (see page 87 of our Annual Report for more information).
Scope 1: This covers direct emissions from owned or controlled sources. For example, our office sites throughout the UK using gas boilers, the paint booths in our Auto Services sites currently relying on gas powered processes and our fleet vehicles.
Scope 2: These are indirect emissions. They are emissions associated with the production and transmission of energy we eventually use as a company across our office and Auto Services sites. For example, the production of the electricity we buy to heat and cool our buildings generates emissions.
Scope 3: These are indirect emissions that occur in the value chain to support our company operations. For example, employee commuting, activities related to the disposal of waste and the goods and services we purchase to fulfil customer claims as part of our supply chain. It will also include our investment portfolio which we are currently evaluating as we work to set Science-Based Targets.
Reporting methodology: 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.
Our carbon emissions are calculated by an external third party and reviewed internally. The calculation method used for 2021 remains consistent with prior periods and with the reporting standards stated above
|Total Scope 1&2 (tC)2e)||11,152||11,697||16,328|
|Of which: office sites (tC02e)||2,592||3,515||6,397|
|Of which: auto services (tC02e)||8,560||
|Scope 3 emissions under our direct control||2021||2020||
|Fuel and energy-related activities||2,586||2,332||2,465|
|Waste generated in operations||474||413||1,245|
|Business travel – Air travel||28||198||928|
|Business travel – Hotel night stays||34||75||469|
|Business travel – rail||29||63||410|
|Of which: homeworking emissions4||5,501||-||-|
|Upstream leased assets3||110||63||193|
|Upstream transportation and distribution of auctioned vehicles||655||625||912|
|Total emissions under our direct control (tCO2e)4||21,030||16,916||27,549|
|Scope 3 – supply chain 2020 2019 baseline||2021||2020||2019 baseline|
|Total procured goods and services (tCO2e)5||217,062||144,114||249,929|
|Direct Line Group carbon footprint (operational control)||2021||2020||2019 baseline|
|Of which: under our direct control4||21,030||16,916||27,549|
1. 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.
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. Total of Scope 1&2 emissions and Scope 3 emissions under our direct control.
5. In accordance with the GHG Protocol under which we report, the following are excluded from the total:
a. operational control activities already detailed under 'Scope 3 emissions under our direct control'; a. cash payments to customers or other insurance companies / legal firms as compensation;
b. 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
c. reinsurance costs to third party reinsurers as this is a financing transaction
We supported three high-impact projects in Kenya, Bangladesh and Brazil to reduce carbon and support communities for a cleaner future. Over the last year, activity has progressed on all these projects, as they have not only reduced emissions, but delivered a range of benefits for people and planet.
Offering customers the option of ‘green’ parts could reduce the need for new replacement parts. It could also provide confidence about what can be recycled from
salvage operations if motorists select this option when fitting parts to their vehicle.
DLG Auto services
Direct Line Group writes 4 million in-force motor insurance policies, and customers are supported by 22 Auto Services repair centres throughout the UK. We have one of the largest insurer-owned body shop businesses in the UK and operate a partnership network with other body shop suppliers around the country. As a major UK motor insurer we believe our ‘green’ USP should be to insure and fix electric vehicles, while aiming to do this in the most energy efficient repair network in the UK.
Using alternative fuels
Testing the viability of alternative fuels, such as hydrogenated vegetable oil (“HVO”), to power recovery trucks which play an important part in servicing customer motor claims.
Moving away from reliance on gas powered repair processes
Paint booths that currently rely on gas could be switched to electricity derived from renewable sources. We are trialling this in our Birmingham site.
Working with our supply chain
Our influence can extend far beyond our direct operations. We want to understand where the emissions sit in our supply chain and recognise the importance of publishing them to assist transparency and accountability. We are using our established relationships and purchasing capabilities through procurement to mitigate our risks by seeking to reduce the emissions in our supply chain. The Group’s Ethical Code already sets out our expectations of suppliers that they should support a precautionary approach to environmental challenges, promote greater environmental responsibility and encourage the development of environmentally friendly technologies. We are now going one step further by launching our Supply Chain Sustainability Programme outlining our plan for the next ten years. We recognise this will be a gradual process but by acting now we can work with suppliers by signalling our expectations so that we can make the transition to a pathway consistent with a 1.5 degrees emissions scenario.
We will include our investment portfolio as part of our commitment to set Science-Based Targets. We are evaluating our Investment portfolio but have already set the following targets to guide our approach:
- 100% of our portfolio will be net carbon neutral by 2050
- Corporate bond portfolios are to have 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 ‘AA’
In setting Science-Based Targets, we recognise that some of the existing investment portfolio targets may need to be amended, or new targets added, in order to meet the criteria set.