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Carbon Reduction Plan

Supplier name: Octopus Energy Group Limited

Publication date: 9th February 2024

Commitment to achieving Net Zero

Octopus Energy Group Limited (OEGL) is committed to achieving Net Zero emissions by 2040.

Octopus Electric Vehicles is a 100% owned subsidiary of OEGL, so this applies to the OEV as the bidding entity.

Baseline Emissions Footprint

Baseline emissions are a record of the greenhouse gases that have been produced in the past and were produced prior to the introduction of any strategies to reduce emissions. Baseline emissions are the reference point against which emissions reduction can be measured.

Baseline Year: FY2023 (1st May 2022 - 30th April 2023)

Additional Details relating to the Baseline Emissions calculations.

As Octopus Energy Group has grown so rapidly over the past few years, FY23 is the first time we have measured our full scope emissions and set an emissions baseline.

Our baselining has been completed in accordance with best industry practice, using the best and latest data we have available. We have measured our scopes 1, 2, and 3 emissions in line with the Greenhouse Gas Protocol’s Corporate Accounting and Reporting Standard, with our measurement partner Altruistiq. The Altruistiq platform is ISO 14064-1 recognised as assured by Lloyd's Register Quality Assurance.

We’ve used the Operational Control Approach to account for GHG emissions, as we believe it is the most valuable in helping business leaders make impactful and sustainable decisions. This means we have measured and included emissions from all our facilities (UK and international) and operations over which we have control. This includes Octopus Energy limited, Octopus Electric Vehicles, Octopus Energy Services, and Kraken Technologies.

We do not have operations that fall under categories 8, 10, 12 & 14, so we do not have emissions associated with these categories.

As we have recently completed baselining, the below emissions are the same as our Current Emissions Reporting.

Baseline year emissions:

Emissions reduction targets

Octopus Energy Group Limited (OEGL) has committed to setting net-zero targets through the Business Ambition for 1.5˚C campaign.

We have submitted 5 science-based targets to the Science-Based Targets Initiative (SBTi) which are pending verification. Our near-term targets aim for 2030 and 2033, with our long-term net zero target being 2040.

Our science-based targets (SBTs) will be the foundation of our net-zero target and strategy. We’re committed to annually reporting our progress against these commitments in our Annual Report.

Octopus Electric Vehicles (OEV) is a 100% owned subsidiary of OEGL, so all these targets will also apply to OEV as the bidding entity.

Carbon Reduction Projects

Completed Carbon Reduction Initiatives

We have implemented several environmental management measures and projects before completing our baseline, and we will continue to monitor their impact on reducing emissions.

We are on track to submit our ESOS phase 3 compliance by June 2024. We have collaborated with Planet Mark and engaged in site audits to understand where we can make energy saving opportunities across our UK facilities. We will implement the opportunities outlined in our ESOS report which will help reduce our Scope 1 and 2 emissions. 

As of FY23, the electricity we provide to over 5m households and 60k businesses is renewable. 71% of our sold electricity came from wind, 17% from solar and 8% from hydro. As well as purchasing Renewable Energy Certificates (RECs), we buy renewable electricity directly from nearly 700 producers in the UK via Power Purchase Agreements (PPAs). We also have our own generation arm, Octopus Energy Generation (OEGEN), which is one of Europe’s largest operators of renewable generation, managing 240 large-scale green energy projects spanning 10 countries, 8 technologies, and £6 billion worth of green energy producers.

In terms of our products and services, we are already a leading driver of heat pump related technology and innovation in GB. Since 2021, we have invested over £50m to drive the rollout of heat pumps and help decarbonise the UK. We have invested in the manufacture and design of our own air-source heat pump product which will be available to more households at a lower price point than other heat pumps on the market. Plus, we have set up a training facility to train heat pump engineers, in an effort to minimise potential skills gaps. These are crucial steps in making heat pumps available for everyone and accelerating the electrification of heat.

Alongside heat pumps, we offer a range of other low carbon technologies (such as home controls system and room temperature sensors) and a smart tariff, which together make the running costs of a heat pump attractive and easy for consumers, making becoming a low-carbon household as easy as possible. We expect the range of our offerings to expand in future, and all of these products and services are designed so that they can scale internationally alongside our retail presence.

We have always pushed - and will continue to advocate for - a range of policy and regulatory changes that will support the decarbonisation of heat. These include pushing for initiatives like confirmation that electrification is the preferred non-carbon solution to home heating, breaking down problems in the planning system and driving improvements in home efficiency standards. We are active and loud advocates for these policies and more in all the markets we operate in, and in multilateral forums such as the European Commission, COP and Davos. We are also chairing a Sustainable Homes Taskforce for Sustainable Housing under the Sustainability Markets Initiative to gather sector stakeholders together to remove barriers to the deployment of electrified heating. In addition, we are members of the Transition Plan Taskforce working group for the power and utilities sector, helping inform the guidelines to accelerate the decarbonisation of the sector. Through a combination of clear signals, and removing obstacles, consumers and industry will have the confidence to invest in heat pumps and other low carbon technologies, giving access to the economies of scale that will make heat pumps scale and enable net zero.

We support beyond-value-chain projects by offsetting our customer’s gas emissions through Renewable World’s Gold Standard certified carbon avoidance projects. In addition, all of OEGEN’s UK-based wind and solar projects consider biodiversity net gain and will purchase statutory biodiversity credits when necessary, in line with UK government guidance.

We also prioritise green purchasing for our Octopus-branded merchandise, and as much as possible purchase from suppliers with transparent sustainability credentials for their materials and product life-cycles.

In the future we hope to implement further measures such as:

  • Shifting our vehicle fleet as part of our services company (OES) to electric as quickly as possible, to reduce our scope 1 emissions. As most of our scope 1 emissions are from mobile combustion, they can be eliminated by switching petrol and diesel vehicles for electric vehicles charged with renewable electricity. We intend to scale this approach in line with international growth.
  • Switching our facility electricity to renewables to reduce our scope 2 emissions. We are working with facility managers at all our sites globally to design and plan for ensuring 100% of facility electricity comes from renewables.
  • Reducing the emissions related to gas, reducing scope 3 emissions from categories 3 and 11, by driving the electrification of heating in the retail markets we operate in.
  • Investing $20 billion into offshore wind globally which will go towards the generation of 12 GW of renewable electricity capacity; enough power for 10 million homes.
  • Working to expand the number of charge point operators (CPOs) Octopus supplies with 100% renewable electricity. This alone will help decarbonise the fuel mix of the public charging network and encourage uptake of electric vehicles (EVs).
  • Looking to directly fund community and impact-based projects that provide additional sustainable infrastructure to communities that need it most. We will do this through our continued partnership with Renewable World. From FY24 we are considering how our customers can engage with these projects, for example through impact-based tariffs where customers can choose to support green projects that matter to them through their purchase of electricity through Octopus Energy.

Declaration and Sign Off

This Carbon Reduction Plan has been completed in accordance with 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 and the GHG Reporting Protocol corporate standard4 and uses the appropriate Government emission conversion factors for greenhouse gas company reporting5.

Scope 1 and Scope 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 reporting standard for Carbon Reduction Plans and the Corporate Value Chain (Scope 3) Standard6.

This Carbon Reduction Plan has been reviewed and signed off by the board of directors (or equivalent management body).

Signed on behalf of the Supplier:

Date: 9th February 2024

https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting 6 https://ghgprotocol.org/standards/scope-3-standard