International Distributions Services : Government PPN 0621 Carbon Reduction Plan - Royal Mail 2023-24 - FINAL

Carbon Reduction Plan 2023-24

We recognise the increasing impact of environmental change on our business, the climate, and its importance to our stakeholders. We believe that the responsible management of natural resources, climate change mitigation and adaptation, along with our commitments to pollution prevention and protection of the environment are essential to delivering a cleaner future and a successful business.

We are also committed to continual improvement of both environmental and energy performance and reporting openly and transparently on our environmental programs and performance.

This plan details our current carbon footprint (1st April 2022-26th March 23) and outlines our commitment to reducing emissions to achieve net-zero by 2040. Our net-zero 2040 target has been validated by Science Based Targets initiative(SBTi)

More information on our environment strategy, Steps to Zero and our progress in 2022-23 can be found in our latest ESG report here.

This plan has been developed to demonstrate compliance with measures detailed in the UK Government's Procurement requirements and the PPN 06/21 published in June 2021.

Greenhouse Gas Emissions reported within this document align with the reporting requirements set out within the PPN 06/21. All Scope 1, Scope 2 and Scope 3 emissions incorporating are included. Our carbon footprint data adheres to the Greenhouse Gas Protocol.

This plan applies to Royal Mail Group Limited (including Parcelforce Worldwide). We will refer to Royal mail Group Ltd as 'Royal Mail' throughout this document.

Date:February 2024

Royal Mail Carbon Reduction Plan

Royal Mail has committed to achieving net-zero by 2040, aligned to a 1.5C decarbonisation pathway, meeting the latest climate science and net-zeroscience-based standard (SBTi).

Royal Mail's near-term carbon targets (from a FY 2020-21 baseline) are:

• GHG Emissions: 50% reduction in Scope 1-2 by 2030 and 25% reduction in Scope 3 by 2030
• Renewable electricity purchased or generated: 100% by 2022
• Zero-emissionfinal mile: 100% by 2035
• Zero emission company cars: 100% by 2030

These targets are planned to remove 134,000 tCO2e carbon emissions per year from our own operations, increasing to at least 480,000 tCO2e by 2040. Our value chain carbon emissions will have reduced by approximately 140,000 tCO2e per year by 2030, increasing to at least 630,000 tCO2e by 2040. This is over 1 million tonnes per year removed from our operations and value chain in 20 years.

In 2022, Royal Mail launched its environment strategy, Steps to Zero, which provides the pathway to achieving these ambitious targets and a wider spectrum of environmental targets including energy efficiency, water reduction, an improvement in product circularity and waste reduction.

Greenhouse Gas Emissions

Royal Mail publicly discloses its emissions annually in the IDS Annual Report and Financial Statementsand Royal Mail ESG report. We provide a 5-year history of data in our ESG data pack. The emission data below, reports a specific sub-sect of Scope 3 emissions, aligning to the PPN 06/211 guidance and, therefore, will not match the figures reported in the above documents mentioned.

Emissions ('000 tonnes CO2e)	FY 2020-21	FY 2022-23	% variance
	(baseline)
Scope 1	473.2	407.6	-14%
Scope 2 (location based)	64.1	52.5	-18%
Scope 32	420.0	413.5	-2%
Category 4. Upstream Transportation and	272,485	281,665
Distribution
Category 5. Waste disposal	1,301	894
Category 6. Business Travel	3,147	7,372
Category 7. Employee Commuting	35,888	41,362
Category 9. Downstream transportation and	107,144	82,185
distribution
Total emissions	957.3	873.6	-9%
Scope 2 (market based)	9.1	0.7	-92%

For a detailed understanding of our reporting methodologies please see our ESG Reporting Criteria.

For the avoidance of doubt, FY for RMG runs from April-March.

1.https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/991622/PPN_0621_Taking_account_of_Carbon_Reduction_Plans__2_.pdf

2.	Categories incorporated within emissions reported for Scope 3 include; Upstream transportation and distribution, waste generated in operations, business travel, employee	1
	commuting and downstream transportation and distribution.

3. Our performance relates to the GHG emission reported as per our ESG report, accounting for all Scope 3 emissions beyond the categories requested in the table above.

Classified: RMG - Public

Our 2022-23 GHG emissions performance 3

In 2022-23, Royal Mail's Scope 1-2 carbon footprint decreased by 14% on our 2020-21 baseline year. This was due to:

• A reduction in vehicle fuel use as a result of fleet electrification
• A move to 99% renewable electricity purchased or generated
• Lower mail volumes resulting in less mileage from our fleet vehicles

Royal Mail's Scope 3 emissions reduction has been minor to date. Driving Scope 3 reductions will become a greater focus in the years ahead.

Royal Mail remain confident in achieving the carbon targets set out above, understanding it has agreed and funded significant carbon reduction initiatives in 2023-24 to 2025-26 that will drive ambition forward (detailed in following sections of this report).

Read more about Royal Mail's environmental performance in our 2022-23ESG Report.

Carbon reduction projects

The following environmental management measures and key projects have been completed since our 2020- 21 baseline year or are planned to be implemented in order to get us to our SBTi validated net-zero by 2040 and 2030 near-term emissions targets.

Near-term: 50% reduction in Scope 1-2 by 2030-31 and 25% reduction in Scope 3 by 2030-31

Long-term: 90% reduction in Scope 1, 2 and 3 by 2040-41

Operations

100% renewable electricity purchased or generated from 2022. We achieved 99% in 2022-23. Our focus will now turn to purchasing renewable energy via purchase power agreements, ensuring a sustainably priced renewable electricity supply.

Reduce energy use within the estate through efficiencies and improved equipment. 16.7GWh of estate energy was saved in 2022-23 compared to the prior year. Since baseline we have had an ongoing energy efficiency program and in 2022, 230 of our largest sites has energy performance runed and enhanced. This energy performance contract is targeting savings of 180GWh over the next four years.

We now have 80 Bio-CNGtrucks which have saved 5,000 tCO2e during the year when compared to diesel equivalents. Additionally we are now deploying HVO as a transitional fuel to help decarbonise our HGV fleet. Zero-emission technology for HGVs is developing fast and we remain committed to working with manufactures to trial and test the technology but it is not yet commercially deployable at scale. During 2022-23 we trialled two electric trucks.

Shifting transport modes to moving less mail by air and more by road and rail will help to reduce emissions. 5% of domestic mail is transported by air accounting for 30,000 tCO2e. We aim to reduce this significantly by 2025.

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Classified: RMG - Public

Deliveries

We have over 5,000 electric delivery vans, the largest electric fleet in the UK. This compliments our existing feet on the street network of over 85,000 posties as we aim to reach zero-emissions in the final mile by 2035. Currently the final mile accounts for 13% of our total emissions.

Supply Chain

Scope 3 accounts for around 63% of our total reported emissions. We recognise the need

to evolve our supply chain practices, gathering more information from our key suppliers, both on emissions and climate risk, and to set a clear strategy for delivering our science-based Scope 3 target in 2030.

Declaration and Sign Off

This Carbon Reduction Plan has been completed in accordance with the PPN 06/21 and associated guidance and reporting standard for Carbon Reduction Plans.

Emissions have been reported and recorded in accordance with the published reporting standard for Carbon Reduction Plans, the GHG Reporting Protocol corporate standard and uses the appropriate Government emission conversation factors for greenhouse gas company reporting.

Scope 1 and 2 emissions have been reported in accordance with SECR requirements, and the required subset of Scope 3 emissions have been reported in accordance with the published standard for Carbon Reduction Plans and the Corporate Value Chain (Scope 3) Standard.

This Carbon Reduction Plan has been signed off by IDS's ESG Committee via the review and sign-off of Royal Mail's 2022-23 ESG Report - which mirrors the information provided in this report.

Jenny Hall

Corporate Affairs Director, Royal Mail February 2024

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Classified: RMG - Public