House of Commons - Environmental Audit

Select Committee on Environmental Audit Written Evidence

Memorandum submitted by the Environment Agency

SUMMARY

The Environment Agency welcomes this inquiry. We are committed to reducing the environmental footprint of our own operations and have adopted ambitious targets that we are making good progress towards meeting. We were represented on both the Sustainable Operations Board and Sustainable Procurement Task Force during its development phase.

Government must be a leader in embedding sustainability within its own operations; however, progress has been disappointing. Too often this is justified by claims of inadequate funding and the need for more guidelines.

Government procurement accounts for almost half of GDP, allowing significant opportunities to reduce the sustainability impacts of their suppliers. This leverage should be exploited and Government suppliers be encouraged to offer more sustainable solutions to their private customers.

The high scores of some Departments reported in the SDC's Sustainable Development in Government assessment, and our own performance, show that progress against the Sustainable Operations on the Government Estate (SOGE) targets is achievable.

We believe that:

— Performance against these targets should be made an urgent priority within Departments and other Government bodies.

— The SOGE targets should be brought forward.

— The SOGE framework should be applied to all parts of Government, including NDPBs such as ourselves.

— Offsets and green electricity tariffs, and therefore achieving carbon neutral status, should not distract from the higher priority of significantly reducing emissions from the Government estate.

Our answers to specific questions posed by the inquiry follow.

Q1. How successfully is the Government providing centralised leadership, guidance, and funding for Departments and Agencies? How well are Departments making use of expertise and funding provided by central bodies, as well as each other? Should anything be done to improve coordination?

1.1 Procurement

The Sustainable Procurement Centre of Excellence has struggled to gain profile and has not provided clear leadership. It currently falls between Government Departments, and would benefit from a single point of leadership. We suggest that this would best be delivered within the Office of Government Commerce (OGC) under their Government procurement policy remit. More recently it is encouraging to note the greater engagement of the OGC at an executive level in the Centre of Excellence.

1.2 To facilitate sharing of best practice we have made a number of our sustainable procurement guidance documents publicly available, including, for example, our sustainable commodity guidance and our timber policy. We would encourage other parts of Government to do the same.

1.3 Sustainable operations

We believe that there is ample guidance available for improving the sustainability of operations, and that leadership should now focus on delivering results. The lead Departments should demonstrate leadership by delivering the agreed targets early, and, where possible, surpassing these targets. The profile of these issues would be raised by including a sustainability target in individual and organisational performance frameworks, with a link to bonuses for individuals.

1.4 Other support

The Carbon Trust have established an enterprise company called Partnerships for Renewables (PfR), which has the mandate to work with the public sector to finance and project manage wind power projects on public sector land.

1.5 The Environment Agency, as an early partner of PfR, has experienced two barriers to working with PfR that we expect will be common to all Departments: we received legal advice that we need to do more to demonstrate value for money and to ensure that we are not seen to be providing state aid. To address this, we are using a competitive procurement process.

1.6 The PfR initiative is useful, in that it provides a straightforward tool for developing wind power on public sector land. However, it would accelerate the process and make it more attractive to other Departments if either Defra or the OGC clarified the value for money and state aid issues on behalf of all Government Departments and Agencies.

Q2. How well are Sustainable Operations on the Government Estate (SOGE) data and targets embedded into core management information systems and priorities within Departments and Agencies? How could this be improved?

2.1 The Environment Agency has developed a strategy to drive improvements in our own sustainability performance based on targets that go well beyond the SOGE targets. For example we aim to achieve the targets for CO₂ reductions, water use reductions and recycling rates by March 2012 rather than 2020. This is challenging but achievable.

2.2 Both the strategy targets and data collection are fully embedded within our performance management processes and scorecards. Performance is formally reviewed by Directors, the Board, and Regional Directors on a quarterly basis. Remedial action is identified when problems are identified and progress is lacking.

Q3. Why has progress in reducing carbon emissions from the Government Estate been so poor? What should be done to accelerate progress?

3.1 During 2007-08 the EA reduced carbon emissions by 3% from 2006-07 levels. We plan to achieve a 15% reduction by 2010-11. This reduction has been achieved through more efficient use of existing infrastructure. Meeting the 30% target will require significant modification and more flexible use of our building stock, continued work to reduce mileage and vehicle emissions, and reducing the energy we use to pump water for flood defence and water resource purposes. To help deliver this we have:

— Established a national team to conduct a comprehensive review of our property portfolio with the remit to reduce the space we occupy and improve the environmental performance of the property we retain.

— Launched a new lease car policy with an even greater focus on reducing vehicle emissions. As a result the average emissions from our lease fleet have fallen from 149 g/km in March 2006 to 143 g/km in March 2008, with the average for new cars brought onto the fleet during 2007-08 being 138 g/km. This approach has been replicated for our badged fleet.

— Conducted a review of the efficiency of our pumps. We are now prioritising the actions recommended in this review based on potential carbon reductions and cost.

— Ensured that our new head office in central Bristol meets the highest standards. Due to be complete in 2010, the office will meet BREEAM Outstanding standard, with natural ventilation, ground source heat pumps, and solar photovoltaics. The cost of the building will be below the average business rate for the area.

3.2 We believe that similar actions could be taken by other parts of the Government estate and that the barriers to doing so are often exaggerated.

3.3 What should be done to accelerate progress?

The current deadline of 2020 to deliver the 30% reduction in CO₂ emissions is comparatively unambitious and does not create sufficient urgency to act. It has resulted in Departments implementing only modest changes at best and putting off the bolder, step changes that are required to meet the 30% reduction. This means that Government is slipping well behind leading private sector organisations. It may be necessary to link performance targets with pay and performance systems.

3.4 The Environment Agency's aim is to reduce emissions by 30% by 2012. We believe that all Departments and Agencies should be able to achieve a similar target.

Q4. Should targets for energy use be framed in terms of absolute reductions in consumption, as opposed to improvements in energy efficiency?

4.1 The target needs to be designed to deliver the desired environmental outcome, which in this case is to reduce carbon emissions. The current target to improve energy efficiency per m2 is unhelpful to organisations looking to reduce their overall buildings portfolio.

4.2 For example, our current desk occupancy is less than 50%, which compares to that of other large organisations such as BT, which has an occupancy of 40%. We plan to reduce our energy needs by reducing the space and hence the number of buildings we occupy. The buildings we keep will need to work harder, with more people working in the same space. This is likely to result in an increase in energy use per m2 but deliver the greatest absolute reduction in energy used in our buildings.

4.3 We therefore recommend that targets for energy use are in terms of absolute reductions, and that this is linked with reductions in greenhouse gas emissions.

Q5. How should the Government treat the purchase by Departments of electricity from "green tariff" contracts?

5.1 Green tariffs could be a useful tool in helping the renewables industry grow, and for this reason Government Departments should be encouraged to purchase their electricity via such tariffs. We do not, however, believe that they should be treated differently from conventional tariffs in SOGE targets for two reasons:

5.2 There is little evidence to suggest that current green tariffs deliver additional growth in renewable energy supply. A report by the NCC[3] found that most green tariffs do not deliver the environmental benefits they claim to, and that many suppliers are not doing more than their requirement under the Renewables Obligation.

5.3 It would detract from the core aim of reducing carbon emissions from the Government estate. Green tariffs can be brought at relatively low premiums relative to conventional tariffs. If green tariffs were given an incentive under the SOGE framework through, for example, considering it to be low carbon or carbon neutral, they would become much more attractive than actual carbon efficiency and reduction measures within the Government estate itself.

Q6. What should be done to accelerate progress from Departments in using combined heat and power, and sourcing electricity from onsite renewables?

6.1 Capital funding for CHP and onsite renewables should be provided through either a Government-wide dedicated funding stream or through individual Department level funds. The existing tools (carbon trading, energy pricing, energy labelling and building regulations) are inadequate to drive the transformational change required to deliver the SOGE targets.

6.2 In the absence of a central fund, the Environment Agency has created its own. We have made the decision not to invest, in any significant way, in carbon offsets as we feel that this will distract us from reducing our own carbon footprint. Instead of offsetting we are putting funds into an internal "carbon reduction fund".

6.3 The Fund's original budget was based on the cost to offset our own carbon emissions. This was an innovative way of offsetting that also allows us to reduce our own carbon footprint.

6.4 This fund is being used to finance carbon reduction projects, including the installation of a biomass boiler, two medium sized wind turbines, a small hydro turbine, solar hot water heating at five sites and sun tubes/pipes at two sites. During 2006-07 and 2007-08 this fund was £237,000. During 2008-09 £400,000 will be allocated.

6.5 One difficulty with this approach is spending the money within an annualised budget cycle. A number of these projects require planning permission and it is often hard to predict how long this will take.

Q7. How should Departments and Agencies make better progress on reducing CO₂ emissions from their use of road vehicles?

7.1 At the Environment Agency we have adopted a "travel hierarchy" as follows:

— We will only travel when essential.

— When we do travel the first option will be public transport.

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7.2 We are named by the Department of Transport (DfT) as one of 5 companies in England and Wales chosen to work with CENEX and the DfT to trial a new low CO₂ van.

Q8. What controls should the Government place on its use of carbon credits to meet its target of carbon neutrality?

8.1 We propose that:

— The contribution that carbon offsets can make towards Government's and Department's emission reduction targets is capped at a set percentage.

— All carbon offsets purchased by Government should comply with Defra's Code of Good Practice, which is currently in development.

— The carbon reduction target of 30% is achieved prior to significant investment into offsets. The date for achieving the 30% reduction should be brought forward to 2015 for the whole of the Government Estate.

8.2 Government hope to deliver around 1 million tonnes of CO₂ savings by 2020 through its sustainable procurement action plan, and have committed to making the entire office estate carbon neutral by 2012. This would entail offsetting approximately 1.3 million tonnes of CO₂ per year, ie over half of the total emissions.

8.3 We are concerned that this would not be a desirable outcome. It is likely that the funds required to offset this quantity of emissions could be better spent on reducing emissions within the Government estates. It also sends a strong, and we feel misguided signal to the wider economy that offsetting comes before actual direct carbon reductions in an emission reduction strategy.

8.4 We believe that high quality carbon offsets that deliver genuinely additional carbon savings can play an important role in an organisation's carbon reduction strategy. However it lies at the bottom of hierarchy of actions to reduce CO₂ emissions. Only if an organisation has already taken action to reduce its direct and indirect emissions should it offset the remaining CO₂.

Q9. How does the new set of targets under the SOGE framework, established in 2006, compare with the previous set, established in 2002 and 2004? What are the advantages of the new set? Has anything important been lost? Should any new targets be added? Are the targets at the right level of ambition?

9.1 The current set of targets are more outcome focussed than previously, a move that we have supported. The targets cover the key areas and we do not believe that additional targets would be appropriate as they may dilute the focus of the SOGE initiative.

9.2 Are the targets at the right level of ambition?

The deadlines for achieving a number of the SOGE targets should be brought forward. For example:

— The target to reduce carbon emissions by 30% should be achieved by March 2015. The current deadline of 2020 demonstrates a lack of ambition and is poor in comparison to a number of leading private companies, such as M&S, the Co-op and BT.

— The energy target for Government offices should be to reduce absolute use of energy bought from the national grid by 30% by 2015.

— The targets for recycling should be brought forward. All Departments should achieve 75% recycling by March 2012. One regional office of the Environment Agency already achieves a 79% recycling performance and on average we achieve 59%.

Q10. SOGE targets currently cover core Departments and Executive Agencies. Is this adequate, or should they be extended to cover all Executive NDPBs (Non-Departmental Public Bodies)—especially given the growing volume of Government business covered by arm's-length bodies?

10.1 We strongly support the proposal that the SOGE targets should be extended to include all Executive NDPBs, including ourselves. Sustainability should be at the heart of all Government and public sector business.

Q11. How well is the Government accounting for the changing shape of the Government Estate ? How should it manage the changes to responsibilities and data caused when functions are transferred to new Departments or the private sector?

11.1 When functions are transferred to the private sector, sustainability should be embedded into the procurement process itself and the final contract with the supplier. Where the sustainability impacts are potentially significant, the performance of the private sector contractor should be closely managed through key performance indicators (KPI's) which should also determine the fee to be paid to the contractor. As a minimum, all contractors should be expected to deliver the same targets as have been set for Government.

11.2 Carbon should be considered by Government Departments and bodies as another budget, equivalent to financial budgets. This has the advantage of being easily understood by managers, who are familiar with managing budgets. When functions are transferred, financial budgets are usually transferred with that function. There is no reason why carbon budgets should not be treated in the same way.

Q12. Why are some Departments not including "Quick Wins" clauses in their contracts, when this has been mandatory since 2003? Why do so few catering contracts have a sustainability clause? What more should be done to embed sustainability into Government procurement?

12.1 Quick wins

This is a question for those Departments who have failed to meet this requirement and should be investigated by the Sustainable Procurement Centre of Excellence.

12.2 Catering contracts

Incorporating sustainability clauses into catering contracts is feasible, and the Environment Agency's catering contract contains both sustainable clauses and sustainability KPI's. These are reviewed quarterly at contract management meetings.

Q13. How well is the Government approaching the environmental management of premises and operations which are outsourced or run under the Private Finance Initiative? Could this be improved, and if so, how?

13.1 PFI/PPP projects have the potential to deliver more robust and consistent improvements in environmental performance. This can be achieved through whole life costing and recognition of the long term nature of asset management and investment, the separation of roles between the supplier and the customer, and the more transparent and commercial apportionment of risk and reward.

Q14. What is the key to the progress shown by Departments and Agencies in reducing waste and increasing recycling? Are there any wider lessons which could improve performance in other areas?

14.1 The management of waste follows a well established and understood hierarchy that makes it clear which actions should be taken first. It would be extremely useful to have equivalent clarity in other areas, such as transport and CO₂ emission reductions, which the Environment Agency has tried to do through developing a hierarchy approach for transport and carbon. Our CO₂ hierarchy, for example, means we will focus first on efficiency, followed by on-site renewables, and offsetting is considered only as a final option.

14.2 In addition to having a well established approach to waste management, reducing waste and increasing recycling is relatively inexpensive. Cost will therefore not be perceived as a barrier to progress as it might be for reducing CO₂ reductions.

Q15. Is protecting biodiversity on their landholdings a high enough priority in relevant Departments and Agencies? Does more need to be done to protect biodiversity on landholdings that are not classed as Sites of Special Scientific Interest?

15.1 We believe that all parts of Government, including ourselves, should have a specific duty to maximise opportunities for biodiversity on it where this is compatible with the lands' function. Good management of SSSIs is well resourced and understood, with all relevant landholders aware of their duty to deliver good condition by 2015. There is, however, no requirement to consider biodiversity outside SSSIs and this means that opportunities are missed.

April 2008

3 NCC (2006) Reality or rhetoric: green tariffs for domestic consumers. Back

4 The biodiesel is made from 100% recycled waste vegetable oil from the UK market. Back



© Parliamentary copyright 2008	Prepared 14 July 2008