FCA reviews environmental targets as work-from-home leads to ‘cliff-edge’ drop in emissions

The Financial Conduct Authority is revising its environmental targets in the wake of Covid-19 after seeing “cliff-edge” declines in emissions since the onset of the pandemic.

As the watchdog turns up the heat on the firms it regulates over their sustainability credentials, creating a new director of environment, social and governance role in April, it has also been urged to factor the environment into the way it conducts its own business.

In March, chancellor Rishi Sunak recommended that “the FCA should have regard to the government’s commitment to achieve a net-zero economy by 2050”, and the regulator agreed to do so in its business plan in July.

According to the watchdog’s Environmental Management Strategy for 2020/21, disclosed to Financial News under the Freedom of Information Act, one of the key pillars of its approach is that the FCA will “set ambitious targets that take account of current global trends in sustainability”, with a commitment to “measuring, reporting, and, where practicable, reducing” its environmental impact.

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Overall responsibility for making sure staff and contractors are on board with making the FCA more sustainable falls to the chief operating officer under the strategy, but the document also charges the watchdog’s chief executive with creating a culture where “environmental matters are an important and integral part of business operations”.

However the regulator is dropping some key performance indicators on the subject while it works out what its future environmental footprint will look like in the new world of work.

“This is because of the impact of the pandemic on our operations over the past year makes a meaningful year-on-year comparison of performance difficult, and so KPI targets have not been set,” the FOIA response reads. “Under normal circumstance we would expect to see positive reductions such as less printing, reduced carbon emissions and reduced water use, however most of our data measures show cliff-edge reductions as the way we carried out our work drastically changed.”

While the environmental strategy covers the regulator’s Stratford headquarters, it does not extend to the regulator’s Edinburgh office, “because of practicalities and the office being very small.”

But across its offices, the regulator’s staff are looking at a significant shift towards remote working.

In early March last year, the FCA conducted a drill where half of its staff worked from outside of the office to understand the impact Covid-19 could have on the organisation.

Nearly all of its roughly 4,200 employees ended up working from home throughout the pandemic, and have now only been asked to return to the office one day a week from November.

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“Currently the majority of the FCA continues to work from home, and we have planned that when we do return to the office our KPIs will be re-baselined,” the FCA said in its FOI response. “This re-baselining will, in particular, need to account for a move to hybrid working rather than majority office based, a reduction in office occupancy, and a reduced office space.”

The Environmental Management Strategy lists a number of positive achievements from moving to the new headquarters and away from Canary Wharf in 2019, including moving to 100% renewable production of electricity, the ability to collect rainwater to flush toilets, the introduction of a zero waste to landfill policy, and removing most disposal items from its catering.

To contact the author of this story with feedback or news, email Justin Cash

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