Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• First Rail delivered a 32% reduction in carbon emissions per vehicle kilometre since 2018.
• First Bus committed to ceasing the purchase of new diesel buses after 2022 and aims for a zero-emission fleet by 2035.
• Developed a science-based target for Scope 1 and 2 emissions, aligned with the Paris Agreement's 1.5°C ambition.

Social Achievements

• Not disclosed

Governance Achievements

• Established a new Responsible Business Committee of the Board to focus on material environmental and social risks and opportunities.
• Embedded sustainability considerations into variable remuneration practices and financing strategy (including a new sustainability-linked £300m Revolving Credit Facility).

Climate Goals & Targets

Environmental Challenges

• Potential financial impacts from increased flooding incidents affecting operational and capital costs.
• Transition risks from changes in carbon policies, technology, investor expectations, and consumer preferences.
• Physical risks from more frequent and severe weather events (floods, storms, heatwaves).
• Increased carbon pricing driving up energy, facility, and material costs.
• Accelerated move to low/zero-emission vehicles leading to potential write-offs and asset impairments.

Mitigation Strategies

• Developed science-based carbon reduction targets for Scope 1 and 2 emissions.
• Completed an in-depth risk scenario analysis and financial impact assessment.
• Implemented robust business continuity plans to manage severe weather incidents.
• Working with governments and stakeholders to monitor regulatory developments and adapt to policy changes.
• Careful planning for cost-effective conversion of infrastructure to electricity and hydrogen.
• Incorporating climate-related considerations into viability statements.
• Signing of a new sustainability-linked £300m revolving credit facility.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Storms
• Extreme rainfall
• Heatwaves
• Droughts
• Rising sea levels

Transition Risks

• Increased carbon pricing
• Changes in technology
• Investor expectations
• Consumer preferences
• Regulatory changes

Opportunities

• Accelerated modal shift to public transport
• Government support for transport decarbonisation
• Lower carbon alternatives

Reporting Standards

Frameworks Used: TCFD, SASB

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Value
• Community Engagement
• Employee Engagement
• Safety
• Ethics
• Human Rights

Environmental Achievements

• Overall carbon emissions decreased by 8% over the last year.
• 63% Science-based target to reduce Scope 1 and 2 GHG emissions by FY 2035 from a FY 2020 base year.
• £43m FY 2023 investment in electric buses and depot infrastructure.
• 83 electric buses delivered and 58 ultra-fast chargers installed.
• £2.5m invested to generate solar power at 20 depots, installing 6,000 photovoltaic panels generating over two million kWh annually.
• Lumo's all-electric fleet saved over 90,000 tonnes of carbon emissions.
• Launched the UK’s first autonomous zero-emission bus service.
• 100% of FirstGroup owned facilities and electric buses are powered by REGO-backed renewable energy.
• All electric traction energy in First Rail is procured through Network Rail from zero carbon nuclear sources.

Social Achievements

• Improved air quality through the transition to zero-emission vehicles and modal shift to public transport.
• Increased modal shift from air to rail travel.
• Community investment through biodiversity gardens at stations.
• 1,685 Exhaust After Treatment Systems fitted to First Bus vehicles.

Governance Achievements

• Transparent disclosure of sustainability performance.
• GHG emissions disclosures externally verified by Carbon Intelligence.
• Science-based targets aligned with a 1.5°C ambition and approved by the Science Based Targets initiative.

Climate Goals & Targets

Environmental Challenges

• Short-term increase in carbon emissions as service levels recover towards pre-pandemic levels.
• Limited Scope 3 data in FY 2023.
• Reduced service levels in First Rail during FY 2023 impacting energy consumption and emissions.

Mitigation Strategies

• Focus on ensuring any growth in operations is delivered in the most carbon-efficient way.
• Completed a full Scope 3 emissions inventory as part of setting our SBT, enhancing disclosures from FY 2024.
• Energy efficiency programmes and improvements in emission factors.

Supply Chain Management

Responsible Procurement

• Embedding circular economy principles in operations; promoting sustainability in supply chain.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Carbon pricing policy increasing operational costs

Opportunities

• Increased customer climate consciousness accelerating modal shift towards public transport

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, Science Based Targets initiative (SBTi), TCFD

Certifications: ISO 14001 (98% of operations by revenue), ISO 50001 (nearly all First Rail operating companies)

Third-party Assurance: Carbon Intelligence, part of Accenture

Sustainable Products & Innovation

• Zero emission buses
• Bi-mode trains
• All-electric Lumo services

Awards & Recognition

• Clean200 (fourth consecutive year)
• S&P Sustainability Yearbook 2023
• Ranked third in World Benchmarking Alliance’s Transport Benchmark 2022
• Low Risk rating on Sustainalytics Index
• Prime status on ISS ESG Index
• AA ranking on MSCI ESG Index (sixth consecutive year)
• London Stock Exchange Green Economy Mark
• Top performing bus and rail operator in FTSE4Good Index

Environmental Metrics

ESG Focus Areas

• Climate change
• Decarbonisation
• Modal shift
• Diversity & Inclusion
• Community Investment
• Safety

Environmental Achievements

• c.300 electric buses delivered in FY 2024 and more than 300 charger outlets installed
• 13% of the First Bus fleet are zero emissions vehicles
• Three fully electrified depots in England, with six further depots across the UK partially electrified
• Hull Trains has reduced CO2 emissions by 65% following the introduction of a new bi-mode fleet in 2019
• A journey on Lumo’s 100% electric fleet emits 21 times less carbon than a journey by petrol car
• £100m strategic decarbonisation joint venture with Hitachi and £150m Green Hire Purchase Financing Facility to support First Bus electrification
• Over £100m invested in First Bus decarbonisation

Social Achievements

• First Bus became the UK’s largest national bus operator to become an accredited Real Living Wage employer
• Launched ‘First Connections’, a personal development programme aimed at female and ethnically diverse employees
• Group raised c.£200,000 for its charity partners, Samaritans, Railway Children, and Macmillan
• DfT TOCs supported almost 100 community funding projects, worth over £2m
• 500 colleagues from under-represented groups completed leadership development programmes

Governance Achievements

• FirstGroup joined the United Nations Global Compact
• Independent board effectiveness review concluded that all Directors standing for re-election had performed well

Climate Goals & Targets

Environmental Challenges

• Industrial relations challenges in the rail sector
• Inflationary pressures
• Economic conditions
• Continued industrial relations activity
• Heightened operational, policy and environmental pressures
• Potential expiry of the GWR NRC at the end of its core period
• Volume and revenue reductions in Hull Trains and Lumo
• Potential impacts of significant climate-related event or unbudgeted decarbonisation costs
• Risk of one-off safety, regulatory non-compliance or technology incidents
• Challenging employment market for drivers and engineering technicians
• High employee turnover impacted by rising inflation and wider labour mobility
• Cyber security risks
• Potential for cyber attacks

Mitigation Strategies

• Progress with TSSA and RMT unions accepting offers
• Fuel and electricity hedging programmes
• Improved driver availability and efficiency measures
• Widen and enhance recruitment reach and training processes
• Strategic partnerships and innovative financing
• Securing government co-funding
• Addressing energy cost inflation and mitigating the long-term impact of electricity costs through industry buying groups
• Robust business continuity plans
• Weather preparedness plans
• Site-specific impact assessments at individual rail stations
• Disciplined capital allocation policy
• Strict set of criteria for evaluating opportunities
• Ensuring opportunities are complementary to existing portfolio and Group’s strategy
• Thorough risk and opportunity assessments
• Operating in familiar contractual, political and regulatory environment
• Appropriate balance of risk and reward
• Comprehensive safety management system
• Dedication to employee health and safety
• Continuous improvement through certifications
• Robust IT infrastructure controls
• Regular cyber risk awareness training and phishing prevention campaigns
• Robust due diligence for new suppliers
• Improving communication with employees
• Developing people strategies
• Investing in employee development
• Market competitive wages and benefits
• Wellbeing resources
• Effective and engaging communications with employees
• Talent management and succession planning
• Commitment to apprenticeship and graduate schemes
• Focus on diversity
• Monitoring KPIs and leveraging exit interview data
• Addressing low performing metrics to retain top talent
• Paying Real Living Wage

Supply Chain Management

Responsible Procurement

• FirstGroup Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Storms
• Rainfall
• Heatwaves
• Droughts
• Rising sea levels
• Global increase in temperatures

Transition Risks

• Changes in policy (carbon pricing)
• Technology (additional capital expenditure)
• Brand reputation (customer expectations)
• Capital markets (investor expectations)

Opportunities

• Shift in customer preferences towards lower-carbon alternatives
• Governmental and regulatory support for transport decarbonisation and modal shift
• Increased demand for more sustainable travel options
• Opportunities from modal shift and green financing

Reporting Standards

Frameworks Used: TCFD, SBTi

Certifications: ISO 45001, ISO 14001

Third-party Assurance: Grant Thornton UK LLP

Sustainable Products & Innovation

• Electric buses
• Bi-mode trains
• Battery-only trains

Awards & Recognition

• IJGlobal 2023 Awards ‘Innovation of the Year – Europe’
• National Autistic Society award (GWR)
• Women in Rail Awards ‘Top Employer of the Year’ (Hull Trains)
• ‘Campaign of the Year’ award (Avanti)