Introduction

In October 2021, Innovate Finance made a commitment to measure and disclose our scope 1, 2 and 3 carbon emissions and to achieve net zero as quickly as possible. We set an aim to halve emissions by 2030 across all scopes.  

Over the last year, we have worked with CO2 Analysis to measure our historic scope 1, 2 and 3 emissions. This first Innovate Finance carbon disclosure report publishes this data and sets out a high level action plan and targets for achieving net zero, based on this analysis. We will report annually on this, including more detailed carbon reduction plans as we extend discussions with our suppliers and refine our plans.

CO2 Analysis uses Artificial Intelligence (AI) to help organisations measure their emissions and become net zero through analysis of procurement and spending to  generate an emissions map. 

Our emissions from 2018 to 2021 

CO2 Analysis has produced an emissions mapping of our emissions over the last four years:

Key points

Nearly all our emissions are in scope 3: 99.76% of our emissions in 2019, most of which are supply chain emissions (96.47%).

Conferences and events are by far the greatest contributor to our emissions: 297,413 kg (63.77%) in 2019. This is therefore a priority for our carbon reduction plan.

Our biggest suppliers and contractors account for a significant proportion of emissions: Our top 10 suppliers (by value) accounted for 70% of our non-pay spend in 2019 and our top 20 suppliers accounted for 82% of spend.

A number of areas of procurement also dominate our emissions: Marketing and advertising, consulting, subscriptions and audit and accountancy fees. 

The last ‘typical year’ of our opertains was 2019: The impact of Covid, especially the temporary cessation of face-to-face conferences and events, more than halved our emissions in 2020 and 2021.

In 2022 we have returned to holding face-to-face events and conferences: We know our members and the FinTech ecosystem value the interaction of real life events. This means that in 2022 our emissions will rise significantly, closer to 2019 levels.

We will therefore use 2019 as our baseline, whilst looking to apply lessons from the emissions reductions achieved during the pandemic.

The pandemic has had one more lasting effect on our emissions: Our employees’ commute. Since the lifting of Government Covid restrictions, we have maintained a flexible working policy which has seen people typically working two to three days in the office and this should continue to deliver carbon savings of around 2,000 kg per annum compared to 2019. This has also enabled us to move to smaller office accommodation, which should have a small benefit in reducing our scope 2 emissions.

Top 6 emissions 

Based on the data in the table above, we have identified the top 6 emissions which can be separated into pre-Covid and post-Covid. 

Prior to the COVID-19 pandemic

2019

1. Conference & Event Costs - 297,413 kg (63.77%)
2. Taxes (Employers National Insurance) - 55,700 kg (11.94%)
3. Consulting - 24,840 kg (5.33%)
4. Advertising & Marketing - 19,997 kg (4.29%)
5. Subscriptions - 10,619 kg (2.28%) 
6. Business Travel - 9,565 kg (2.05%)

During the COVID-19 pandemic

2021

1. Taxes (Employers National Insurance) - 53,382 kg (30.68%)
2. Advertising & Marketing - 26,205 kg (15.06%)
3. Consulting - 22,733 kg (13.07%) 
4. Conference & Event Costs - 13,165 kg (7.57%)
5. Subscriptions - 11,017 kg (6.33%)
6. Audit & Accountancy Fees - 10,464 kg (6.09%)

Our plan to halve emissions by 2030 and achieve net zero emissions

Our initial action plan to halve our emissions by 2030 and subsequently become a net zero organisation will prioritise action to reduce the top six areas that contributed most to emissions in 2019 and 2021.

To achieve our target of halving emissions by 2030, using 2019 as a base year, we will have to reduce net emissions by an additional 29,149 kg each and every year. Innovate Finance will have halved its emissions from 466,392 kg to 233,196 kg by 2030. 

We can achieve this by cutting the emissions of our 2019 top 6 largest emissions by 56.66% by 2030 (except tax where we assume a 50.00% reduction).

The table below sets out our emissions targets. The figures for 2022 are estimates based on 2019. 

Priority actions

• Conference and Events Costs 

In 2019, the weight of conference and events costs emissions was 297,413 kg which represented 63.77% of our emissions. Therefore, our plan to halve emissions to 233,196 kg by 2030 and eventually achieve net zero heavily depends on decarbonising our conferences and events. 

In the short-term, we will introduce carbon offset schemes for conference attendees and conference sponsors to purchase carbon offsets. We will introduce carbon offsetting for IFGS 2023, the Innovate Finance Global Summit, being held in April 2023. We will explore options for robust, targeted offset schemes and will engage members providing FinTech solutions in this field. However, we are cognisant of the limitations of this measure, recognising that this is not a wholly sustainable option: in the medium to long term, the costs will significantly increase and availability may decrease as the carbon price rises and offsetting is dominated by industries who have no alternative options. We have to start developing ways of holding conferences and events that have a smaller environmental impact. 

Therefore, as a longer-term solution, we also will begin discussions with our event suppliers, notably the management of event venues (e.g. conference halls and corporate offices), production facilities and catering on how they can reduce emissions and achieve net zero. Initiating these conversations will enable us to guarantee that our conferences and suppliers prioritise achieving net zero in their services, which will effectively lower Innovate Finance’s share of emissions in this category. We will also assess the market for venues and suppliers that are aligned to net zero targets and can demonstrate significant progress towards net zero. 

Over the next ten years we expect carbon offsetting to quickly ramp up to cover events emissions, and then gradually decline as direct emissions reduction are implemented in events activities. 

• Taxes 

Our taxes (based on Employers National Insurance contributions) carried a carbon footprint of 55,700 kg which is our second largest emission at 11.94%. This is based on the emissions associated with average Government spending. The UK Government has made a firm commitment to reduce emissions in 2030 by at least 68% compared to 1990 levels. In its 2021 Net Zero Strategy, the government restated its ambition that “the wider public sector will lead by example during the transition to net zero”. Our carbon reduction plan therefore makes an assumption that emissions associated with our tax contributions will fall by 50.00% by 2030 and will achieve net zero by 2050.

• Procurement

After events and taxes, a number of areas of supplier expenditure make up a significant proportion of emissions:

• Consulting - 24,840 kg  and 5.33% of our emissions. 
• Advertising and Marketing - 19,997 kg or 4.29% of our emissions. This rose to 26,205 kg in 2021. 
• Subscriptions - 10,619 kg which was 2.28% of our total emissions in 2019. 

Looking at our top suppliers by value in 2019, the key contracts and service areas were:

• IFGS event suppliers
• Marketing and PR contractors
• Web design and support
• Database software providers
• Legal, auditor and accountancy services

In 2022/23, we will engage in discussions with these strategic suppliers to ascertain their alignment with net zero, specific emissions disclosure and plans and targets for emissions reductions.

Where suppliers are unable to prioritise net zero, we will seek alternative suppliers who can.

For new tender-based procurement, we will incorporate requirements for emissions to enable achievement of our net zero target and reporting on these. For smaller procurement, we will seek low emission suppliers.

Our future emissions reporting will include specific reported emissions by suppliers wherever possible, rather than industry averages.

• Business travel

As an international and national organisation, business travel is increasing steadily from the pandemic low. We will therefore introduce a reputable carbon offsetting to cover emissions associated with our business travel and look at how we can further encourage the use of public transport, walking and cycling for local and national travel.

Conclusion

It is clear that events and conferences are the largest contributors of Innovate Finance’s carbon emissions, and will remain so, barring any public health restrictions, as they are an integral part of our work as an industry body representing and bringing together FinTechs in the UK and globally. We are therefore committed to short, medium and long term actions to achieve net zero events. 

More generally, our scope 3 supply chain emissions are the bulk of our emissions. We will prioritise action on engaging with suppliers and integrating net zero into our procurement practices.

We are confident that we can achieve our target of halving emissions by 2030, against our 2019 baseline. Achieving full net zero by 2050 - and much sooner - will depend upon further, significant action in our supply chain. We will be actively seeking change and incentivising the actions needed to support this.