Our Net Zero Transition
Across Pennon, we recognise the urgent need to transition to a low carbon, climate resilient economy, aligned with the goals of the Paris Agreement and a 1.5°C pathway.
This year and for the start of AMP8, we have reviewed our strategic ambition to become a Net Zero organisation, setting our near term focus on achieving our emissions reduction goals through our near term science based targets and developing our longer term strategy through a Climate Transition Plan, to be published in the upcoming financial year.
Whilst our regulated businesses have made significant progress, achieving a 45% reduction in emissions towards their operational Net Zero ambition last year, we are cognisant of the shortcomings of that commitment, covering only operational greenhouse gas (GHG) emissions within our regulated businesses, with over 73% of the Group’s emissions occurring in our value chain, in other words, the Group’s scope 3 GHG emissions.
Building on the progress we are making as a Group against our near term GHG reduction targets, which have been revalidated by Science Based Targets initiative (SBTi) in April 2026, our Group’s Climate Transition Plan sets out our pathway to achieving Net Zero across all three emissions scopes by 2050 across the Group, aligned with the latest climate science and in reference to the SBTi Net Zero Standard.
Our plan will build on our current decarbonisation strategy to provide greater transparency on the levers, dependencies and milestones required to achieve Net Zero, ensuring we remain accountable to our stakeholders while contributing to a resilient and low carbon future.
For more details of our progress towards Net Zero, please see our Annual Report and Accounts 2025/26
GHG Emissions
Our GHG targets
Science-based targets
As a Group, we have committed to near term Science Based Targets (SBTs), giving us Scope 1, 2 and 3 emissions reduction targets to aim for by 2032/33.
Our targets were initially validated and approved by the Science Based Targets Initiative (SBTi) in May 2024, and this past year we have reaffirmed our commitment to the SBTi by rebaselining these targets to include SES Water, ensuring our SBTs remain relevant across our Group. SES EV charger
SBTs provide a clearly defined pathway for companies to reduce greenhouse gas emissions. Targets are considered ‘science based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement ‑ limiting global warming to 1.5°C above pre industrial levels.
Our ‘rebased’ SBTs are set out below. These apply across the whole Pennon Group, including SES Water.
- The Group commits to a 63% reduction in absolute Scope 1 and market based Scope 2 emissions by 2032/33 from a 2021/22 base year.
- The Group commits to reduce absolute Scope 3 GHG emissions by 30% from fuels and energy related activities, wastes generated in operations, business travel, employee commuting, upstream leased assets and use of sold products over the same timeframe.
- The Group commits that 60% of its suppliers by emissions covering purchased goods and services, capital goods and upstream transportation and distribution will have science based targets by FY 2027/28.
- The Group commits to increase annual sourcing of renewable electricity to 100% by 2030/31.
GHG performance commitments
Our South West Water (including Bournemouth Water), Bristol Water and SES Water regulated businesses also have five GHG related performance commitments (PCs) reportable to our regulator Ofwat.
Four of the performance commitments relate to operational GHG’s where the measure is based on Scope 1 and 2 emissions and a subset of Scope 3 emissions that relate only to our operational activities.
Our operational GHG performance commitments are measured using the location based GHG accounting methodology where our purchase of renewable electricity from suppliers does not count towards our emissions reduction, whereas our Group science based targets use the market based greenhouse gas accounting methodology which does account for our renewable electricity purchase.
The fifth performance commitment is an embodied carbon measure that relates to activity under our capital investment programme and is a measure of tonnes of CO2 embodied in our investment in our capital projects as a proportion of our spend on those projects.
These performance commitments are all measured against the baseline values we calculated and forecast as part of our PR24 (2025–2030) business plan.
Carbon in decision-making and internal carbon price
We continue to integrate carbon into our decision-making processes, embedding it within planning, investment and operational activities across the Group.
We are working closely with our Amplify supply chain partners to embed this approach, ensuring carbon is a key consideration in project design and delivery, and supporting the adoption of lower-carbon solutions across our capital investment programme.
This forms part of our wider Green First approach, which prioritises low-carbon and nature-based solutions at the earliest stages of investment planning, helping to reduce both operational and embodied emissions.