Bank of England Climate Transition Plan – 2026 update

Foreword

As Chief Operating Officer, ensuring that the Bank of England remains operationally resilient and efficient is a priority. This includes responding to climate change where it gives rise to material risks to monetary and financial stability, and to the Bank’s ability to discharge its functions.

The Bank’s approach to transition planning is proportionate and grounded in prudent risk management to ensure the careful stewardship of public resources. This update reports progress against the decarbonisation trajectory set out in the Bank’s inaugural Climate Transition Plan. It also reflects developments in external frameworks and standards, and sets out the Bank’s pathway to net-zero greenhouse gas emissions from physical operations by 2040.

While achievement of the 2030 and 2035 milestones carries some delivery risk due to ongoing investment in the estate, critical services and operational resilience, the long term 2040 decarbonisation trajectory remains on track.

Sarah John
Chief Operating Officer of the Bank of England

Executive Summary

This update to the 2023 Climate Transition Plan (CTP) sets out how the Bank is transitioning its physical operations towards net-zero greenhouse gas (GHG) emissions, focusing on practical actions, delivery dependencies, and key risks.

Foundations

The Bank manages climate-related risk (climate risk) and transition planning within established operational planning, investment appraisal and implementation frameworks.

Implementation strategy

Decarbonisation actions are delivered through and sequenced alongside planned investment in the estate, supply chain and critical systems. Decisions are assessed on whole-life cost, emissions impact, operational requirements, value for money and contribution to long-term resilience.

Engagement strategy

Most emissions arise from the Bank’s supply chain. Targeted supplier engagement across each stage of the procurement process is central to continued reductions, focused on the highest-emitting categories and operationally critical services.

The Bank engages with peer central banks and supervisors, including through the Network for Greening the Financial System (NGFS) Workstream on Net Zero for Central Banks and wider international forums, to share emerging practice and strengthen its approach to delivering net zero emissions from its own operations.

Metrics and targets

Emissions are calculated in line with the Greenhouse Gas (GHG) Protocol's relevant corporate standards and informed by the UK Transition Plan Taskforce Disclosure Framework.^{footnote [1]} In 2026, the Bank moved to a purpose-built carbon accounting platform and updated elements of its methodology. Given the materiality of this change, the Bank has restated its baseline, historical emissions, interim milestones and the 2040 target, strengthening the accuracy and robustness of emissions measurement.

Progress is monitored using absolute emissions against interim milestones and emissions-intensity metrics, supporting oversight and decision-making during periods of increased investment and activity.

Governance

The Bank’s governance architecture for climate-related matters is unchanged. Since publication of the 2023 CTP, responsibilities have been further embedded within existing structures, including through sustainability-related objectives for relevant executive managers.

Climate considerations are assessed through existing decision-making and oversight frameworks alongside safety, security, resilience and cost. This supports clear ownership and a transparent, proportionate approach aligned with the Bank’s statutory objectives and responsibilities.

1: Foundations

1.1: Strategic ambition

The Bank’s mission to maintain monetary and financial stability depends in part on the resilience, efficiency and continuity of its physical operations. Climate change is relevant where it could, for example, affect the Bank’s estate, critical services, energy supply, or key suppliers.

The CTP focuses on delivering decarbonisation actions along the planned trajectory, while managing material risks and identifying cost-effective actions that support long-term operational resilience and value for money.

1.1.1: Physical greenhouse gas emissions target

The 2023 CTP introduced the Physical Greenhouse Gas Emissions Target (PGGET), calibrated to a pathway consistent with limiting global warming to 1.5°C above pre-industrial levels.^{footnote [2]}

The 2040 target date remains a realistic ambition balancing the responsibility to reduce emissions with the need to maintain resilient, efficient and operationally effective physical operations, consistent with prudent stewardship of public resources.

This update should be read alongside the Bank’s 2023 CTP and the Bank’s Climate-related financial disclosure (climate disclosure) 2026. It provides a focused update on the Bank’s PGGET, covering material developments since 2023. This includes progress against the decarbonisation trajectory, relevant methodological restatements and the principal actions and dependencies affecting delivery of the 2040 target.

Progress against the PGGET will continue to be monitored through the interim milestones in 2030 and 2035, which coincide with periods of increased project activity. These milestones provide clear checkpoints on the Bank’s pathway to net-zero GHG emissions for physical operations and are embedded in operational planning, risk management and decision-making.

1.1.2: Milestones

Progress to the 2040 PGGET is measured against interim emissions reduction milestones: 40% by 2025, 62% by 2030, and 84% by 2035, all relative to the 2015/16 baseline.^{footnote [3]} These checkpoints provide a structured basis for assessing delivery, and whether the Bank remains on course (Figure 1.1).

The Bank’s interim emissions reduction milestones remain unchanged since first published in the 2023 CTP. While the absolute tonnage associated with each milestone has been adjusted following the baseline restatement, the percentage reduction has not changed.

1.1.3: Performance against emissions targets and milestones

The PGGET continues to represent a 90% absolute emissions reduction from a 2015/16 baseline, with any residual emissions to be neutralised from 2040/41. The baseline and historical emissions have been restated using improved data and updated methodologies (Chart 1.1). Further information is set out in Section 4.3.3.

Delivery remains broadly on track against the decarbonisation pathway, despite the restated baseline trajectory. The recalculation does not alter the Bank’s strategic ambition or direction.

As shown in Chart 1.1, total emissions reduced by 43% between 2015/16 and 2025/26, from 62,432 tCO₂e to 35,306 tCO₂e exceeding the reduction required to meet the 2025 interim milestone.

The largest driver of the Bank’s reduction in total emissions between 2015/16 and 2025/26 was purchased goods and services (-12,598 tCO₂e), followed by reductions in electricity (-5,728 tCO₂e), capital goods (-3,487 tCO₂e), business travel (-2,139 tCO₂e) and stationary combustion (-1,247 tCO₂e).

These reductions reflect the Bank’s move to renewable electricity, operational efficiency improvements, reductions in supplier emissions and economy‑wide decarbonisation of the electricity grid, which has reduced the embedded emissions associated with purchased goods and services.

The Bank has worked with priority suppliers to support lower carbon intensity in the products and services supplied. This has included improvements in energy efficiency, use of renewable energy, and product and service specifications.

Performance varies from year to year, but the overall trend is one of reduction. Variation reflects differences in activities and volumes, continuing data improvements, the availability of lower-carbon inputs, and supplier capability.

1.2: Business model

The Bank will continue to deliver its core policy and operational functions, while managing climate risks in a way that supports resilience and the UK’s orderly transition to net zero.

Most emissions within the Bank’s target boundary^{footnote [4]} arise from:

• the procurement of goods and services across the supply chain;
• the operation and maintenance of properties and offices; and
• the production of banknotes.

In managing these emissions sources, the Bank has observed that actions taken to reduce emissions often deliver wider operational benefits. These include enhanced physical resilience of buildings and infrastructure, greater energy and material efficiency, and lower whole‑life costs.

The Bank’s approach to transition planning is embedded in its estate strategy, procurement practices and operational risk management frameworks, rather than treated as a standalone programme.

1.3: Key assumptions and external factors

This update is structured in line with the UK TPT Disclosure Framework.

Each year, the Bank calculates and reports its total Scope 1, 2 and 3 GHG emissions, enabling transparent performance monitoring and informed decision-making across its estate and operations, and aligned to UK Task Force on Climate-related Financial Disclosure (TCFD) reporting requirements. All emissions data are calculated using the Greenhouse Gas (GHG) Protocol and informed by Science Based Targets initiative (SBTi) guidance.

Decarbonisation pathways and interim milestones are benchmarked against SBTi sectoral and methodological guidance,^{footnote [5]} operational developments, data improvements and changes in external conditions. Assumptions and pathways are reviewed periodically to reflect relevant UK Government targets, operational developments, data improvements and changes in external conditions.

Delivery of the Bank’s transition objectives is sensitive to external factors, including:

• the pace of decarbonisation within key supply chains (eg zero-carbon polymer and low-energy technology solutions);
• the availability, maturity and cost of abatement technologies (eg renewable heating/cooling systems suitable for listed buildings);
• energy market conditions; and
• the wider UK policy and regulatory context, including the Government’s statutory net zero target.

While the Bank continues to expand the coverage and quality of its GHG emissions inventory, data limitations remain for certain categories of downstream emissions (for example, emissions associated with cash circulation once notes are in the economy). These limitations are kept under review.

2: Implementation strategy

2.1: Business operations

2.1.1 Delivery levers for emissions reduction

The Bank’s implementation strategy sets out how decarbonisation actions will be delivered in practice. Delivery is sequenced alongside planned investment in the estate, supply chain and critical systems, with decisions assessed on whole-life cost, emissions impact, operational requirements, value for money and contribution to long-term resilience.

Aligned to the PGGET, Scope 3 progress is intended to be delivered primarily through supply-chain levers, continued operational optimisation, and efficiency improvements, complemented by Scope 1 reductions from heating system decarbonisation (Chart 2.1).

2.1.2: Scope 1 and 2 emissions

Work has commenced at the Bank’s Debden site to electrify heating systems, spanning office and factory areas. This work is aligned with the Bank’s decarbonisation strategy and is being delivered through the planned asset management lifecycle. Heat pumps were successfully trialled in 2024 as part of an office refurbishment. The remainder of the site continues to be heated by centralised gas boilers, with replacement scheduled before 2030. Once complete, the programme is expected to reduce the Bank’s Scope 1 emissions by c.40% (c. 2% of total emissions). Additional energy efficiency measures under consideration include LED lighting improvements, improved ventilation controls, and heat recovery systems.

At the Bank’s Threadneedle Street site, major refurbishments are planned between 2026 and 2030. The works are at an early design and tender stage but are expected to modernise workspaces and provide opportunities to improve energy efficiency, including through replacement of outdated core infrastructure. Decarbonisation of heating at the Bank’s Threadneedle Street building remains scheduled for the period 2030 to 2037, but timings will continue to evolve as plans mature. Progress on design and implementation will be further reported on at the next milestone update of the transition plan.

In addition, the Bank operates a leased office building in Moorgate, for which the lease will end before 2030. The Bank is also expanding its office presence in Leeds, where c.10% of employees are expected to be based. This expansion is expected to require relocation to larger premises, with environmental performance and carbon credentials helping to inform site selection.

Electricity supply contracts for all Bank sites were decarbonised in 2020. Maintaining value for money, resilience to physical risks and credible renewable supply requires ongoing review and active contract management.

2.1.3: Scope 3 emissions from physical operations

The Bank’s Scope 3 emissions from physical operations (Scope 3 emissions) arise from activities required to maintain the continuity, security and resilience of those operations.

The Bank’s most material Scope 3 emissions fall into two categories:

• purchased goods and services including banknote materials, specialist and technical services, facilities management and other operational supply chain activities; and
• capital purchases, particularly emissions associated with major estate projects, refurbishment programmes and investment in critical systems and infrastructure.

Action to reduce Scope 3 emissions is primarily delivered through design requirements and project specifications, procurement decisions, supplier engagement, and capital investment choices.

In 2023, the Bank began targeted engagement with key suppliers to obtain product-level emissions information, intended to improve design and procurement decisions, and support more targeted interventions. As this data improves, the Bank will develop metrics to measure progress and support delivery.

Scope 3 emissions also arise from other operational activities such as business travel.

Business travel emissions rose in 2023/24 as operations adapted to post-Covid working arrangements but have since declined from 6,322 tCO₂e in 2023/24 to 4,601 tCO₂e in 2025/26. The 27% reduction reflects a combination of improvements in the carbon efficiency of air travel, improved emissions factor data, reduced business travel, and travel policy changes introduced as part of the Bank’s sustainability commitments.

2.2: Products and services

Producing the UK’s banknotes is one of the Bank’s core responsibilities. Improving the carbon efficiency of banknote production is a continuous process and is pursued while maintaining the Bank’s responsibility to meet demand for cash and to maintain the security and integrity of banknotes.

With the polymer banknote series launch completed in 2021, production volumes have subsequently reduced. Engagement with the supply chain continues to support improvements in material sustainability, manufacturing processes, resilience and operational efficiency.

Over the next decade, the main driver of banknote-related emissions is expected to be print volumes associated with issuing the next series of banknotes. While the timing and total volume of notes printed are informed by a range of factors, discretion where available will be exercised to align printing schedules with the emissions volumes allocated each year.

Beyond issuing banknotes, the Bank of England delivers a wide range of core central bank functions that support the UK economy and financial system.

Technology suppliers that support the Bank’s core services improve carbon efficiency by optimising infrastructure utilisation, consolidating workloads and deploying more energy‑efficient hardware, enabling the same level of service to be delivered with lower energy consumption. Suppliers optimise data‑centre power and cooling and provide regular environmental reporting alongside service performance, helping the Bank to understand and progressively reduce the carbon intensity while maintaining resilience and security.

2.3: Policies and conditions

Since publication of the 2023 CTP, several new internal policies and conditions have been introduced or are being implemented, including:

• a commitment not to install new fossil fuel-burning equipment (eg gas boilers or water heaters, gas-fired cooking equipment or diesel generators);^{footnote [6]}
• a requirement for refrigerants with a low global warming potential (GWP <600) where heat pumps are installed;
• minimum efficiency standards for new or replacement ventilation systems, including high-efficiency motors and variable speed control;
• upgraded heat and electricity metering where new heating and ventilation systems are installed to enable effective monitoring of energy use;
• mandatory carbon reduction plans for tenders valued above £2 million per year, with carbon reporting and performance criteria as standard in larger procurements; and
• updated Bank procurement terms and conditions, incorporating specific requirements on environmental and carbon performance and reporting.

2.4: Financial planning

Delivery of the Bank’s CTP is resourced through business-as-usual financial planning and capital allocation, rather than separate or incremental funding arrangements. Decarbonisation actions are integrated into planned investment in the Bank’s estate, supply chain and critical systems, including through the 20-year property strategy and routine asset renewal and maintenance budgets.

Transition activities may involve upfront capital expenditure and can result in temporary increases in costs or emissions. These effects are assessed alongside whole-life impacts on operating costs, energy efficiency, asset resilience, and emissions metrics, to determine whether additional investment is improving carbon efficiency over time.

Aligning decarbonisation programmes with planned asset renewal, maintenance and resilience investments, helps to reduce overall costs beyond what is necessary to maintain the efficiency, safety, resilience and continuity of operations.

3: Engagement strategy

3.1: Engagement with supply chain

Given that supply chain emissions represent the largest share of the Bank’s emissions inventory, supplier engagement, aligned with public procurement legislation, is a core delivery lever for achieving the Bank’s strategic ambition.

The Bank uses its purchasing activity to signal demand for lower-emissions products and services, and to encourage suppliers to provide robust, product-level emissions data.^{footnote [7]} Engagement activity with existing suppliers is prioritised towards categories that are most emissions-intensive or operationally critical to the Bank’s activities.

The Bank is strengthening this approach by beginning to embed sustainability-related performance expectations within contract management processes. This includes the proportionate introduction of relevant key performance indicators (KPIs) and contractual requirements. These measures are intended to reinforce accountability, support delivery, and provide clear escalation mechanisms where performance does not meet agreed expectations.

3.2: Engagement with government, industry, and civil society

Through the Network for Greening the Financial System (NGFS) Workstream on Net Zero for Central Banks, the Bank engages with peer central banks on practical approaches to transition planning, climate-related disclosure, and reducing emissions from physical operations. This engagement supports delivery of the Bank’s CTP by building understanding of emerging practice, implementation challenges, and approaches taken by other central banks.

4: Metrics and targets

4.1: Governance, engagement, business and operational metrics and targets

The Bank monitors emissions metrics and related indicators across its organisational boundary to assess progress against the PGGET. Progress is reviewed through established governance and risk management processes and reported publicly at least annually through the Bank’s climate-related financial disclosures.

The principal metrics used for internal oversight and external reporting are set out in Table 4.A. Metrics 1 to 4 have been reported since 2022/23, whereas metric 5 is new (Section 4.3.4).

The Bank also monitors a wider set of governance, engagement, business and operational indicators to support delivery of its CTP and strengthen climate resilience across operations and the supply chain. These indicators support oversight of delivery risk, capability and operational dependencies.

The Bank monitors progress, delivery risk and changes in underlying activity, and recognises that the relative emphasis placed on these metrics and indicators may change in response to external conditions.

4.2: Financial metrics and targets

The Bank does not currently set separate financial metrics or targets for the transition plan. Financial implications are managed through business-as-usual financial planning and capital allocation, with decisions assessed through existing investment appraisal and cost disciplines. This is consistent with the Bank’s approach to embedding transition planning within core operational decision-making rather than treating it as a standalone programme.

As set out in Section 4.3.4, the Bank is expanding its metrics framework to include emissions-intensity measures. Used alongside absolute emissions targets, these measures help assess whether procurement and investment decisions are improving carbon efficiency.

Over time, improved availability of product- and project-level emissions information should support more decision-useful financial metrics for transition planning, including for major projects and high-emitting procurement categories. This could help the Bank link spend more clearly to expected emissions outcomes, delivery confidence and value for money.

The Bank will keep this area under review as data quality and systems mature and may disclose additional financial metrics and targets if they provide decision-useful information.

4.3: GHG metrics and targets

4.3.1: Methodology and data sources

In line with the GHG Protocol, the Bank estimates GHG emissions using a combination of primary activity data, supplier-specific emissions information, and spend-based estimates.

Annex 1 sets out the Bank’s full historical GHG emissions inventory, including applicable Scope 1, Scope 2 and Scope 3 categories. Annex 2 summarises how the Bank calculates and reports GHG emissions, including data sources, assumptions and standards applied, to ensure consistent and transparent reporting.

Methodological assumptions, boundaries, data sources and calculation approaches are reviewed annually and updated where improvements in data quality or methodology materially affect reported emissions or progress against targets. Any material change is disclosed transparently as set out in Section 4.5.1. This supports a consistent and comparable account of performance over time, including where historical emissions are restated.

While data coverage and granularity continue to improve, reported metrics are intended to provide a consistent and decision-useful representation of emissions performance and progress against the Bank’s interim milestones.

The Bank’s CTP and its climate disclosure are prepared within established internal control, review and challenge processes. As such, the Bank does not currently obtain external assurance over these disclosures, and keeps this position under periodic review, with a focus on proportionality and cost effectiveness.

4.3.2: Target boundary

The PGGET boundary includes GHG emissions over which the Bank has direct operational control or meaningful influence, reflecting its operating model.

As first disclosed in the 2021 climate disclosure, the boundary excludes financed emissions associated with assets held to fulfil the Bank’s core policy functions. This reflects the Bank’s mandate and the limited extent to which such emissions are within the Bank’s operational control or influence.

The Bank’s balance sheet is predominantly composed of UK government gilts, meaning its associated financed emissions broadly reflect the emissions profile of the UK economy.

The PGGET applies to the Bank and the following wholly owned subsidiaries:

• Bank of England Asset Purchase Facility Fund Limited (BEAPFF).
• Bank of England Alternative Liquidity Facility Limited (BEALF).
• The Securities Management Trust Limited.

The target excludes the BE Pension Fund Trustees Limited, which is operationally independent, and publishes its own climate disclosure and objectives.^{footnote [8]}

The Bank reports Scope 1 and 2 emissions for all properties over which it or one of its subsidiaries has operational control,^{footnote [9]} namely: Threadneedle Street, Debden Printing Works, Moorgate Prudential Regulation Authority, and Roehampton The Grange.

4.3.3: Restatement of historical emissions

In 2026, the Bank completed its transition to a purpose-built carbon accounting platform, improving the accuracy, transparency and consistency of its GHG emissions reporting. The restatement improves comparability between historical and current-year emissions, while preserving the CTP interim milestones and 2040 target in percentage terms.

Migration to the platform has enabled updates to the methodology used to calculate and report the Bank’s emissions, particularly for Scope 3 emissions categories. To maintain transparency and comparability, the Bank has restated historical emissions in accordance with the restatement policy. The restatement is reflected throughout this document and in the Bank’s climate-related financial disclosure 2026.

The updated methodology recalibrates historical emissions estimates using more accurate regionally specific and time-matched emissions factors. This has resulted in a downward revision of the Bank’s 2015/16 baseline and subsequent years. The restated figures provide a more robust basis for tracking progress against the Bank’s 2040 net-zero target and interim milestones.

4.3.4: Addition of emissions-intensity metrics

The Bank will expand the metrics framework to include emissions-intensity measures alongside absolute emissions targets. An emissions-intensity metric (eg tCO₂e / £ spend) may provide a clearer view of emissions performance during periods of increased investment and activity, when embodied emissions may temporarily rise.

Chart 4.1: Emissions intensity has reduced across the Bank’s physical operations in line with expectations

Emissions intensity^(a) has reduced materially since 2015/16, showing lower GHG emissions per £ million of operating expenses

• Source: Bank of England analysis.
• (a) Emissions intensity is shown as tCO₂e per £ million of operating expenses as reported in the Bank’s Annual Reports, inflation adjusted to 2015 using the Bank of England Inflation Calculator.

As shown in Chart 4.1, the Bank’s emissions intensity has reduced steadily since 2019/20. This reflects ongoing efforts to improve the carbon performance of major procurements, including by embedding sustainability criteria in tender and evaluation processes. Incorporating these considerations helps to drive longer-term reductions in supply chain emissions and is a key part of the Bank’s decarbonisation strategy.

Assessing emissions relative to expenditure or activity will help the Bank judge whether procurement and investment decisions are becoming more emissions-efficient over time, and whether they are delivering proportionate long-term abatement and resilience benefits. This avoids disincentives to invest in assets that are critical to long-term operability and physical resilience.

The introduction of emissions-intensity metrics reflects the practical requirement to deliver the Bank’s remit through a period of sustained investment across retrofit, resilience and technology programmes. Used alongside absolute emissions targets, these measures improve transparency on the carbon efficiency of decision-making and provide important context for assessing progress during major projects.

4.3.5: Scenario analysis

The Bank uses scenario analysis to assess how progress against its interim milestones and 2040 target may vary under a range of plausible future conditions, including different delivery timings. These scenarios are not forecasts; rather, they set out structured pathways used alongside complementary evidence to inform decision-making.

For the CTP, the Bank has used scenario analysis to consider the impact to the Bank’s decarbonisation pathway of different approaches to banknote production, major building refurbishments, and significant investments in technology.

The three scenarios considered are:

• Accelerated delivery: Heating systems are decarbonised by 2030, and banknote manufacture reaches net zero by 2030. Emissions peak in 2030 above the milestone, before reducing in the mid-2030s to meet the 2035 milestone and exceed reductions required by the 2040 target.
• Planned delivery: Debden heating is decarbonised by 2030, Threadneedle Street by 2037, and banknote manufacture reaches net zero by 2040. Emissions peak in 2030 significantly above the milestone, remain slightly over the 2035 milestone and then reduce to meet the 2040 target.
• Delayed delivery: Both heating systems are decarbonised by 2037, and banknote manufacture reaches net zero by 2050. Emissions peak in 2030 significantly above the milestone, remain over the milestone in 2035 and remain slightly over the volume permissible in 2040. In this scenario the Bank misses its 2040 carbon target.

The Bank found that if decarbonisation actions are delayed, pressure on the Bank’s PGGET trajectory is likely to increase. The effect was seen most strongly in relation to the 2030 and 2035 milestones and banknote production was found to be a key driver as demand is expected to increase and remain elevated over the next decade.

Additional information about how the Bank uses climate scenario analysis to assess climate risks to its physical operations is set out in the 2026 climate disclosure.

4.3.6: Retirement of 2030 carbon reduction target

Prior to setting its 2040 PGGET, the Bank had committed to a 63% reduction by 2030 in emissions from Scope 1, Scope 2 and business travel. At the time, this target was intended to demonstrate early commitment to improving operational efficiency within a defined emissions boundary.

As the Bank’s approach has matured, this ambition is now captured within the PGGET, which includes a materially equivalent 2030 milestone for emissions from physical operations. To maintain a separate, narrower target would put disproportionate focus on business travel emissions, diverting resource from more material emissions sources.

4.4: Carbon credits

The Bank’s priority is reducing GHG emissions from physical operations. Carbon credits are not intended to be used to meet the Bank’s 2030 and 2035 interim milestones and have not been used to evidence progress against the 2040 decarbonisation trajectory.

Limited use of carbon credits may be considered in 2040/41 if residual emissions remain after all reasonable reduction actions have been taken. Any future use of carbon credits would require formal governance approval and would be disclosed transparently. The Bank would only consider credits that meet appropriate standards of quality and verification, consistent with prevailing best practice.

4.5: Policies and procedures

4.5.1: Update to GHG disclosure restatement policy

To support consistency, transparency and comparability of emissions over time, the Bank will implement and disclose methodological updates at the next scheduled milestone year. This includes any baseline recalculation or restatement of historical emissions.

However, the Bank may consider recalibrating its baseline year and restating historical emissions outside this cycle in the event of one or more of the following having a strategic effect on decarbonisation decisions:

• Structural changes, including divestments or acquisitions that materially alter the Bank’s operational emissions boundary;
• Changes to the emissions boundary such as the inclusion of additional Scope 3 emissions categories or types; and
• Error corrections, where material errors are identified in the inventory calculation that would affect strategic decarbonisation decisions.

Interim milestones are expressed as percentage reductions from the baseline year so the re-baselining exercise does not alter the ambition of the Bank’s targets or the required rate of emissions reduction but will affect the absolute volume of emissions permissible.

5: Governance

5.1: Responsibility, accountability, and oversight

Responsibility for delivering the Bank’s transition plan is embedded within established management and operational structures. Relevant estate, procurement, finance, operational and risk functions are responsible for incorporating transition planning considerations into business plans, investment appraisals, risk management and lifecycle cost methodologies.

This helps to prioritise interventions where they deliver measurable physical resilience and long-term affordability, ensuring trade-offs are visible, well understood, and actively managed.

Accountability for climate-related matters remains embedded within the Bank’s established governance and line management structures, as described in the 2024 climate disclosure.^{footnote [10]} This has been reinforced through sustainability-related performance objectives for relevant managers, supporting accountability alongside existing operational responsibilities.

Through this approach, the Bank supports consistent, proportionate and financially disciplined delivery of its climate transition plan for physical operations, aligned with its statutory objectives and stewardship responsibilities.

5.2: Skills, competencies and training

The Bank embeds climate-related requirements within established professional disciplines, minimising reliance on bespoke roles. Delivery of the Bank’s PGGET commitment is therefore supported by the development of relevant skills where necessary. Training and capability development are role-specific and targeted, focusing on staff and senior decision-makers with responsibility for asset management, investment, procurement and project delivery. This helps ensure that those accountable for delivery can assess physical risks and opportunities, whole-life costs and operational impacts, and to make informed trade-offs consistent with value-for-money principles.

The Bank promotes a risk-aware and learning approach, recognising the evolving nature of decarbonisation technologies and climate risks to the built estate and operations. Lessons from delivered projects are captured and applied to future investment decisions, supporting continuous improvement in specification, procurement and delivery.

External expertise is used selectively where specialist input is required, with a clear expectation of knowledge transfer to maintain internal capability and control long-term costs. Capability needs are kept under review as climate risks, standards and technologies evolve, and are addressed through training, selective recruitment or time-limited specialist support, as appropriate.

Management is expected to demonstrate sufficient understanding of climate risks to challenge proposals, test affordability and assure delivery confidence through existing governance and assurance processes.

Annexes