Environmental

Gamma is committed to reducing its impact on the environment. As part of its ongoing commitment to support the UN Sustainable Development goals, the Company has made good progress in 2020 on better understanding the impact its business has on the environment. Gamma has sponsored internal, as well as global projects aimed at carbon reduction since 2006.

In 2020 Gamma extended the reporting boundary to increase the accuracy of its UK emissions data and comply with the Streamlined Energy and Carbon Reporting (SECR) regulations. In addition, it increased its carbon offset to align with the new reporting boundary.

Gamma purchases 100% renewable energy to power its business in the UK and is proud to be certified as a carbon neutral company by Natural Capital Partners in line with the Carbon Neutral Protocol. Gamma is certified until the end of December 2021.

Responsibilities

The Board has responsibility for oversight of environmental issues and also risks related to climate change which are discussed below. The CEO is responsible for executing strategies that have been agreed with the Board which maintain the values to which Gamma has subscribed since its foundation.

Through the ESG Committee, the Board also ensures that environmental policies and suitable governance structures are established to align with Gamma’s committed environmental targets.

As part of Gamma’s executive management team, the Group Operations Director has responsibility for the Company’s emissions reporting and carbon reduction planning.

Measuring our impact on the environment

The scope of the data presented for emissions and energy consumption primarily relate to Gamma’s UK based activities. In addition, Gamma also has small staff operations in Hungary, Poland and Germany which help develop and support its UK products. The emissions and energy data do not reflect the non-UK European acquisitions in Netherlands, Spain and Germany.

The emissions generated by Gamma are reported within three defined reporting scopes. Experienced third parties are used to measure the Company’s energy usage and report on its carbon emissions data. This data is then used to manage Gamma’s carbon offset. All carbon offset projects are validated and verified to ‘The Carbon Neutral Protocol’ global standard and carry guarantees of origin.

A thorough analysis of the impact of Gamma’s UK business was concluded in 2020 which has resulted in the extension of the emissions reporting boundary to include emissions arising from all the business’s UK network ‘points of presence’. In addition, to allow for greater accuracy of GHG emissions reporting, in 2020 the carbon emissions measurement was moved from biennial to annual and the reporting period was aligned with the Company’s financial year. In consideration of the extended emissions reporting boundary and to reinforce the business’s commitment to the environment, the carbon offset plans have been increased to account for additional emissions measured in 2020. Further analysis will be conducted in 2021 to enable the reporting of emissions within recently acquired UK and European subsidiaries and to set a ‘base year’ for the purpose of setting future carbon reduction targets.

Gamma’s GHG emissions have been quantified by applying the most relevant emission factors. GHG emission factors relating to the 2020 reporting period are predominantly sourced from DEFRA’s 2020 UK GHG Conversion Factors for Company Reporting (June 2020). For air travel, Gamma has elected to apply an Aviation Impact Factor (AIF) of 1.2 for the 2020 GHG assessment as per the requirements of the updated 2021 Carbon Neutral® Protocol.

Gamma emissions by scope (Tonnes CO₂e)

* GHG emissions data is location-based
** To calculate 12 months emissions for 2020, 18 months emissions data was produced by a specialist third-party and then apportioned between reporting periods
*** To allow for greater accuracy of GHG emissions reporting, in 2020 Gamma moved the carbon emissions measurement from biennial to annual and aligned the reporting period to the Company’s financial year. Emissions recorded between July 2019 and December 2019 total 1,264 tCO₂e. Of these emissions, 58 tCO2e were recorded under Scope 1, 539 tCO₂e recorded under Scope 2, and the total recorded under Scope 3 was 667 tCO₂e.

In 2020, Gamma has reported an increase in emissions as a result of two contributing factors.

• To improve the accuracy of the emissions reporting, reliance upon estimated data has been reduced and 70% is now based on primary data. Where primary data is unavailable, Gamma has used benchmarks recommended by experienced third parties.
• 77 shared data centres and network ‘points of presence’ have been included within Scope 3 to represent emissions arising from Gamma’s UK national network.

Gamma's emissions by source

* To calculate 12 months emissions for 2020, 18 months emissions data was produced by a specialist third-party and then apportioned between reporting periods

During 2020, electricity procured and used by Gamma was its largest source of emissions (approximately 46%), followed by third-party data centres, third-party points of presence, home-working emissions, company owned vehicles, business travel (flights and rail), refrigerant gas losses, mains gas, and waste. The remaining sources; water, wastewater, taxis and hire cars each account for less than 1%.

The largest proportion of Gamma’s emissions is generated through the use of electricity for its national network and offices and as such the floor space the Company occupies provides the most accurate emissions intensity ratio. The increase in GHG per square meter of floor space in 2020 relates to the disproportionately higher emissions generated by third-party data centres and network ‘points of presence’ included within the emissions reporting for this period. In 2020, 95% of emissions were produced in the UK, with 5% generated offshore.

Gamma's energy usage

In 2020, Gamma used 8,048,735 kWh of electricity and 113,472 kWh of natural gas. More than 99% of Gamma’s electricity usage in 2020 was generated within the UK, with less than 1% generated offshore. In 2020, 77% of gas was used within the UK and 23% of gas used offshore.

Taking climate action

Gamma has made good progress in 2020 developing better climate related data and improving reporting capabilities to establish 2021 as the ‘base year’ for its carbon net-zero planning. In addition, the Company has taken steps in 2020 to further reduce its emissions.In 2020 it began to transition its fleet to ‘self gen’ hybrids, the desire is to complete this migration by 2023. It is estimated that this transition will result in a 15% annual CO₂ reduction per vehicle.

Gamma is also looking at the choices it makes when selecting vendors for its computing and network equipment. There is a rolling process of renewal of this infrastructure and in each iteration the new equipment is more energy efficient. This has facilitated a general downward trend in overall electricity consumption despite the Company’s continued growth.

Because no organisation can produce no CO₂ footprint, where the Company’s activities do result in CO₂ being released into the atmosphere, Gamma made a commitment in 2006 that it would fully offset this. Gamma has held ‘Certified Carbon Neutral Company’ status (conferred by Natural Capital Partners) since 2006 and to improve the accuracy of the carbon offset, the Company has switched from biennial to annual offset. 2529 tCO₂e will be offset for the 2020 reporting period.

Over the years Gamma has invested in a variety of "offset projects" which have been a combination of environmentally friendly power generation projects in the developing world and forest conservation. At present, the offsetting projects include:

• Acre Amazonian Rainforest Conservation Project (Brazil) which aims to protect 105,000 hectares of rainforest in the Amazon basin from deforestation. The project works with communities and local Groups to help protect ecosystem services while providing alternative models of economic development which avoid destruction of the forest.
• Meru and Nanyuki Community Reforestation Programme (Kenya) offers hundreds of individual tree planting activities and enables local communities to improve access to food and create additional sources of income beyond subsistence farming, helping to improve the biodiversity of the local area.
• Improved Water Infrastructure Project (Uganda): this project provides clean drinking water to small rural communities by repairing and drilling new boreholes, helping to reduce water scarcity. Boreholes can be used as water wells by installing a vertical pipe casing and well screen, which allows water to be extracted from the ground. By providing clean water, communities no longer need to purify water through boiling. This alleviates pressure on local forests, the predominant source of firewood, and reduces greenhouse gas (GHG) emissions.

Waste Management

As well as producing CO₂, like any business, Gamma produces other waste. The larger waste items are network assets which need to be retired. These are disposed of in compliance with the Waste Electric and Electronic Equipment Directive (WEEE Directive). Such assets are sent to a WEEE certified operator which is engaged to dispose of the items appropriately in compliance with the certificates they provide to the Company.

Across Gamma sites, more general "office waste" is separated into recyclable and non-recyclable materials. Further improvements to waste management are planned, and although presently the mass of waste produced annually is not recorded, in 2021 it will begin to be measured and reported to enable future reduction and recycling targets to be set.

From Carbon Net-Neutral to Carbon Net-Zero

Gamma’s 2021 Environmental targets

In 2021 it is Gamma’s ambition to record emissions throughout the recently expanded Group. This data will form the ‘Base Year’ reporting to support the strategic ‘Carbon Net-Zero’ planning. In addition to this, the business will also measure and report on the mass of waste produced across the Group.

As such Gamma will further extend its 2021 reporting to include the following:

• Carbon emissions generated within all recently acquired European subsidiaries
• The mass of waste produced within all Gamma UK and European office facilities
• Emissions produced by major upstream suppliers
• Disclosures consistent with the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD)

And it will set out plans to make the energy that is purchased greener by switching to more Solar, Wind and Hydropower generation sources.

Climate-related business risks and opportunities

As well as working to reduce Gamma’s effect on the environment, the Board has also considered the business risks which are associated with climate change. It believes that climate change presents an opportunity for the Unified Communication industry as the products which are supplied allow business users to reduce their travel.

The COVID-19 pandemic has facilitated several climate opportunities in 2020, allowing travel to be curtailed and reducing business travel mileage by on average 100 miles per employee per month. Utilising its own Unified Communications products, Gamma transitioned to remote working quickly and it has since formulated plans to leverage the opportunity to reduce the longer-term emissions generated through employee travel.

Notwithstanding, there are risks which are discussed in the "Our principal risks" section of the Annual Report and these risks are reviewed quarterly by the Risk Committee, which reports to the Board.

Some types of "extreme weather" (which is becoming more frequent as a result of climate change) could pose a risk to Gamma. For example, the impact on assets caused by data centre flooding or extreme wind resulting in roof loss. The Company’s buildings are maintained to a high standard and key network sites are located carefully to mitigate this risk. More widely, this type of weather could impact the electrical grid supply, and this is mitigated by having back-up systems in place on core parts of the network.

In addition to the risk of the direct impact of climate change, there are also internal risks relating to potential disruption to Gamma through its transition to net zero, as well as maintaining compliance with increased reporting and disclosure requirements, however these risks are also assessed as low impact.