Environmental

Committed to becoming a Carbon Net Zero business by 2042

Gamma takes its responsibilities towards the environment seriously and it is systematically assessing its environmental impacts and developing programmes to minimise them.

Understanding environmental impact

Although Gamma as a service business has a lower impact on the environment than many other businesses and many of its services have a positive impact by reducing the need for travel, Gamma understands that all companies have a responsibility to act.

Over the last 12 months Gamma has increased the scope of reporting to include all acquisitions in Europe. Using this extended scope in 2021 Gamma has set its baseline energy and carbon emissions data which will be used to support future emissions reduction targets, more detail of which can be found below.

Gamma is pleased to announce its commitment to move from a Carbon Neutral business to become a carbon net-zero business by 2042, supporting both the Paris Treaty's aims to limit the temperature increase to 1.5°C globally and the UN Sustainable Development Goal 13: Climate Action.

Gamma has also committed to set near and long-term Companywide emission reductions in line with climate science and with the Science Based Target initiative (SBTi). The Company will seek validation of its target within the SBTi timeframes.

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. In addition, at the end of 2021, Gamma appointed a Group Sustainability Director responsible for the planning of all aspects of ESG, with specific responsibility for Gamma’s Group environmental policy and carbon net-zero commitment.

During 2021 Gamma appointed an Environmental Data Manager to support the commitment to measure and reduce its carbon emissions through a clear and science-based carbon net-zero plan.

Gamma has published a Group Environmental Management Policy, available on the Gamma website, defining its commitment to reduce its impact on the environment and outlining the controls put in place to do so.

Sarah Kirton, Group Sustainability Director

I’m really pleased that we’ve now announced that we will aim to become a carbon net zero business by 2042.

Sarah Kirton, Group Sustainability Director

Measuring Gamma’s impact on the environment

Re-baselining of emissions

A baseline is a quantitative reference providing a basis for comparison of energy/carbon performance over time. Gamma specifies the period to which baseline data applies as one year. It was important for Gamma to reset its energy and carbon emissions baseline in 2021 for several reasons.

The first and most important reason is that the data presented for emissions and energy consumption in 2021 relates to activities across the Gamma Group. While previous disclosures did include small operations in Hungary, Poland and Germany, the majority of historical emissions reported derived from UK-based operations and excluded acquisitions. These have now been included, with the exception of Mission Labs in the UK that was acquired by Gamma in March 2021. Mission Labs will be included in emissions calculations from 2022 onwards as this will be the first full year as a Gammaowned company.

The acquisitions of Dean One and gnTel in the Netherlands (now Gamma Communications Nederland), HFO Telecom in Germany, and VozTelecom in Spain, supported by strong organic growth in all markets, have increased the number of employees and floor space in the business, reflected in the Group’s GHG reporting scope for 2021.

Furthermore, the re-baseline gives the Company an opportunity to better define the remit on which Scope 3 emissions are reported.

The extent of emissions sources included in Scope 3 calculations has increased year on year and in 2021 Scope 3 includes IT equipment, hotel accommodation, and private commuting for the first time.

The emissions generated by Gamma are reported within three defined reporting scopes, as per the Greenhouse Gas Protocol. Primarily used to identify sources of emissions and methodically address their reduction, this data is also 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.

ScopeDescriptionHow this applies to Gamma
Scope 1 – Direct GHG emissionsCO2e emissions that come from sources that are owned or controlled by an organisation. Typically, these are emissions generated by gas boilers and owned or leased cars, vans & lorries. A telecoms specific example would be an off-grid generator to power a base station

Gas boilers are used for building and water heating within Gamma office premises.

Air conditioning units are operated in staff premises and data centres that use refrigerant gases.

Off-grid generators are utilised at Gamma's critical operational sites.

Gamma has a fleet of vehicles utilised by engineers for the installation and repair of connectivity and communications services.

Scope 2 – Indirect GHG emissionsGreenhouse gases released into the atmosphere from the consumption of purchased electricity, steam, heat and cooling. Although the CO2e emissions result from an organisation's activities, they occur at sources it doesn't own or control. As a result, they are indirect emissions.Electricity is used within office premises and dedicated data centres.
Scope 3 – Other indirect GHG emissionsOther emissions resulting from business activities or sources connected to, but not directly generated by the business itself for example business travel, employee commuting, supplier or distributor activity.

Gamma consumes electricity which incurs transmission and distribution losses.

Gamma employees use trains, planes, taxis, ferries and hire cars for business travel.

Gamma employees commute to and from offices and other areas of work.

Employees often stay in overnight accommodation when travelling.

Many Gamma employees work from home.

Waste and waste water is produced at facilities.

Gamma procures products from suppliers including capital goods.

Gamma utilises third party data centres and Points of Presence across its UK and European networks.

Emissions are generated through the transportation and distribution of products required for Gamma's services.

Energy Performance

Due to ongoing business growth and because of its acquisitions, Gamma's total GHG emissions have increased year on year. This increase is not unexpected, and the Company is in the process of defining carbon reduction activities to support its carbon net-zero commitment. Gamma acknowledges that further acquisitions, coupled with more primary emissions data, will inevitably add to the total carbon emissions and therefore, Gamma understands that complementary metrics such as carbon intensity, regularly tracked over time, are vital barometers of improvements and efficiencies made.

In order to normalise its energy and carbon management performance the Company has chosen to define its emissions data in relation to floor space. The largest source of Gamma's GHG emissions is derived from the use of electricity for its network, data centres and offices. As such, tonnes of CO2e per total square metres of floor space provides a consistent comparison of energy efficiency and carbon management performance over time.

The carbon emissions intensity ratio data for 2021 reflects a significant increase in floorspace (42.15%) because of the acquisitions made to the business. An increase of 24% tCO2e per sqm in 2021 is associated with Gamma's acquisitions, an increase in Scope 3 sources and improved data collection methods.

 GHG Emissions Intensity Ratio
 2018-2019*2020*2021Annual Change
(%)

* 2018 – 2019 represents 12 months emissions data from July 2018 to June 2019. 2020 and 2021 represents 12 months emissions data from January to December.

** Total Group employees on 31 December 2021 was 1,745. Mission Labs employees (114) removed from this total as not in scope for environmental data reporting in 2021.

*** Reflects the increase in floorspace and emissions due to European acquisitions.

UK GHG Emissions (tCO2e)1,6202,4093,630+50.71
Non-UK (offshore) GHG Emissions (tCO2e)81120862+618.96
Total GHG Emissions (tCO2e)1,7012,5294,493+77.67
Total Floor area (m2)8964.69174.613,041+42.15
GHG Emissions per sqm floor space0.1900.2760.344+24.64***
Total FTE9801,1631,631**+40.24
GHG Emissions per FTE1.742.172.75+26.7

Gamma emissions intensity (tCO2e/m2)

Gamma emissions intensity chart

Gamma emissions by scope

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

Gamma emissions by scope (tCO2e/m2)

Location based

Gamma emissions by scope chart

** 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.

Gamma's emissions by source

ScopeEmissions Source CategorytCO2e
1Direct emissions from owned, leased or directly controlled stationary sources that use fossil fuels or emit fugitive gases87.6
Direct emissions from owned, leased or directly controlled mobile sources352.3
2Emissions from the generation of purchased electricity, heat, steam or coolingLocation
2,443.2
3Water2.1
Capital Goods15.1
Upstream emissions from purchased electricity and fuels781.2
Transmission and Distribution (T&D) losses200.4
Waste6.4
Wastewater3.9
Business Travel71.9
Hotel Accommodation20.5
Employee Commuting129.9
Homeworking378.8
Total (location based)4,493.3

Gamma GHG emissions by source

Gamma GHG emissions by source chart

During 2021, electricity was Gamma’s largest source of emissions (approximately 54%), followed by Scope 1 vehicles (17%) and homeworking (15%). All remaining sources account for approximately 14% of Gamma’s GHG emissions.

Gamma's energy usage

 Electricity
 2018/201920202021Annual Change
(%)
UK (kWh)8,542,5928,011,7827,339,515-8.39
UK (kWh/m2)1,067.14916.62839.71-8.39
Non-UK (kWh)39,81636,9532,008,130+5334.28***
Non-UK (kWh/m2)91.5784.98466.79+449.29
Total (kWh)8,582,4088,048,7359,347,645+16.14
Total (kWh/m2)1,016.88877.21716.70-18.30
 Gas
 2018/201920202021Annual Change
(%)

* 2018–2019 represents 12 months’ gas data from July 2018 to June 2019. 2020 represents 12 months’ emissions data from January 2020 to December 2020.

** For the purposes of measuring energy efficiency trends, electricity and gas usage between 2018-2019 has been calculated retrospectively using the 2020 reporting boundary.

*** Reflects the increase in emissions due to European acquisitions

UK (kWh)103,02686,881198,411128.37
UK (kWh/m2)12.879.9422.70128.37
Non-UK (kWh)35,39026,591175,738560.89
Non-UK (kWh/m2)81.3961.1640.85-33.21
Total (kWh)138,416113,472374,149229.73
Total (kWh/m2)16.3912.3728.69131.93

In 2021, Gamma used 9,347,645 kWh of electricity and 374,149 kWh of gas. More than 78% of Gamma's electricity usage in 2021 was within the UK, with less than 22% used in non-UK locations. In 2021, 53% of gas was used within the UK and 47% of gas used in non-UK locations

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.

In order to effectively implement the waste hierarchy once waste has been produced, "office waste" is separated into recyclable and non-recyclable materials in Gamma staff premises:

 TonnagetCO2e divertedtCO2e landfill
UK36.470.692.54
Non-UK31.280.572.60
Total67.741.265.14

Key Biodiversity Areas

Gamma’s operational impact on ecology and biodiversity is very low. At Group level there are three offices within 1km of Key Biodiversity Areas. Gamma will continue to assess proximity to KBAs in respect of staff premises and other facilities.

Taking climate action

Carbon Neutrality

Gamma has held 'Certified Carbon Neutral Company' status (conferred by Natural Capital Partners) since 2006. 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. Following a review of the projects in which Gamma invests, and in an effort to align the investment with Gamma’s aim to support the UN Sustainable Development Goals, the offsetting projects for 2022 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.

Gamma’s carbon net-zero ambition

Gamma acutely understands the need to contribute to the climate challenge with ever more ambitious plans and targets. As such, following the baselining of GHG emissions in 2021, Gamma is committed to becoming a carbon net-zero company by 2042.

Net-zero requires a reduction in emissions to a point at which Gamma can demonstrably show any remaining emissions are business critical. Net-zero plans can be backed and verified by science-based targets which quantifies what can be considered ‘residual’, e.g. total reduction =~90%.

Gamma has committed to set near and long-term Company-wide emission reductions in line with climate science with the Science Based Target initiative (SBTi) and the Company will seek validation of its target within the SBTi timeframe of 24 months from commitment.

Gamma has constructed a plan over five, four-year carbon emissions reduction periods, ensuring the Company’s efforts are consistent with the need to decarbonise the wider economy at pace.

Goals

  • Gamma will commit to reducing internal carbon emissions through five key reduction periods - the two periods between 2022-2030 will target a 90% reduction of both Scope 1 & Scope 2 emissions, in line with the 1.5°C pathways.
  • Gamma will seek to have net-zero plans ratified by external accreditation (SBTi).
  • Gamma is committed to maintaining Carbon Neutral status in the interim period prior to achieving net-zero.

Reducing energy consumption and environmental initiatives

Gamma understands that energy and carbon reduction is the priority in implementing a science-based net-zero plan.

Emissions reduction projects have been ongoing throughout 2021. Gamma’s commitment to move its small fleet of cars and vans over to self-gen hybrids is ongoing, with completion expected in 2023. In line with the reduction activities for the carbon net-zero plan, Gamma will then target the switch over to electric vehicles prior to 2030.

Gamma continues to improve the energy efficiency of its data centres and its technology. Annual capital expenditure investment ensures that the Company deploys energy efficient technology and continues to optimise its heating, ventilation and air-conditioning in key data centres. A rolling programme of decommissioning ensures that legacy and energy-hungry infrastructure is replaced.

Gamma has partnered with Thales and announced that it will switch the Gamma SIM supply with eco-designed card, made from recycled refrigerators, further reducing its environmental impact and contributing to a circular economy. Find out more

Gamma Aggregated Emissions Trajectory (Target) (tCO2e)

Gamma's 2022 environmental targets

In 2022, Gamma will extend its emissions measurement to include Mission Labs that was acquired in 2021.

Supported by its Ethical Procurement Policy, Gamma has started to work with major upstream suppliers to understand the applicable Scope 3 emissions and this work will continue into 2022 to understand the greatest opportunity to influence reductions.

Gamma is certified with the ISO14001 for Environmental Management in the UK and the Company will complete an assessment to consider extending its scope to include its European subsidiaries during 2022

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.

Working within the Company’s risk management framework and using the Taskforce on Climate-related Financial Disclosure (TCFD) scenario-based risk and opportunity assessment criteria, Gamma has identified potential climate change risks, none of which are considered of material impact at present. An extensive financial impact analysis will be completed in 2022.

Transition risks are risks related to the transition to a lower-carbon economy. These might include risks relating to policy and legal changes, technology, market and finally reputation.

Physical risks are related to the physical impacts of climate change in the short term (acute) or longer term (chronic). These risks may have financial implications for Gamma, such as direct damage to network assets, or indirect impacts from its supply chain.

Potential impact

The impact of both transition and physical risks to Gamma is assessed to be minimal at present.

Gamma recognises that current and emerging regulations in both the UK and Europe are likely to lead to enhanced disclosure requirements, with additional metrics and monitoring. Gamma’s expansion strategy, the demand for carbon credits, as well as potential increases in carbon taxes, could have a negative impact on its financial performance. Additionally, the Company’s existing commitment to remain carbon neutral could become prohibitively costly should carbon offset credits increase significantly in price.

Although Gamma’s energy costs are a small proportion of its costs, the increasing demand for low carbon energy is likely to drive up electricity prices, which will impact its operational costs. Given the material importance of climate change to Gamma’s internal and external stakeholders, as demonstrated by the results of a materiality exercise conducted in 2021, Gamma considers that there is a risk of reputational damage if it does not continue to respond appropriately to reducing its contribution to global climate change.

Gamma has assessed the physical risks of climate change both in the short term and longer term to be minimal. There is potential for disruption to the power supply to Gamma’s data centres during a prolonged, extreme heatwave, leading to higher consumption and costs for cooling. Additionally, an acute flooding event would increase the likelihood of damaged infrastructure both in buildings (data centres/offices) and below ground level (network equipment).

Longer term, temperature increases in its key locations has been identified as potentially impacting the cost of cooling offices and data centres, as well as increasing Gamma’s impact on the environment through carbon emissions. Wildfires are considered low risk overall but using climate factors and scenario forecasting, Gamma appreciates that this risk is heightened in Spain and Morocco.

Mitigating actions

Gamma has strengthened the governance around potential climate change impacts, ensuring that the Company reports submits to the Carbon Disclosure Project (CDP) annually.

Activity required to support CDP disclosures includes identification and management of transition risks relating to regulation changes, disclosure requirements and carbon offset costs. Gamma’s environmental programme of work ensures that its understanding of the market and emerging regulation is understood and assessed. Any strategic acquisition will include climate-scenario planning and emissions assessments to understand the potential impact on the Company’s net-zero ambition and the risks outlined here. Any new premises will also be assessed thoroughly in terms of environmental credentials.

Gamma is committed to reducing its emissions and energy usage, and the Company will continue to remain Carbon Neutral by investing in carbon offset initiatives that are validated and verified to recognised global standards (Verified Carbon Standard (VCS), the Gold Standard, and Climate, Community and Biodiversity Standards (CCB).

Gamma has announced a carbon net-zero plan, aiming to be net-zero by 2042. To support its ambition, the Company has committed to set near and long-term Company-wide emissions reductions in line with SBTi, the Business Ambition for 1.5°C and the UNFCCC Race to Zero campaign. Aligned to SBTi key principles, Gamma’s net-zero commitment consists of five key emissions reduction periods, facilitating the setting of interim targets to track progress. Gamma has committed to cutting emissions in line with halving emissions by 2030 and is aiming to have its target officially validated by the SBTi within SBTi guidelines of 24 months.

Gamma’s business continuity planning is certified to the ISO22301 standard and the business can rapidly respond to climate-related incidents. In the event of extreme weather Gamma has wellrehearsed procedures to protect all critical business operations. There are ‘hot standby’ operational sites, and the business can operate almost entirely remotely with secure, multi-factor authentication access to the network. Gamma has also installed back-up generators at key network and customer support sites to mitigate the risk of power cuts.

Gamma is also proud that one of its biggest contributions to mitigating climate change is through the products that its employees and customers utilise. Unified Communication products enable users to reduce their travel and thus, reduce their own carbon footprint.

Additionally, there exists an opportunity to extend Gamma’s waste management processes to customers through the recovery, re-use, and repair of consumables such as handsets and routers.

Also in this section

Key to strategy

  1. Cloud Telephony and UCaaS Evolve our strong Cloud telephony position into the UCaaS market
  2. Fixed and Mobile Telecom Build on our fixed and mobile telecom strength to differentiate our proposition from pure OTTs
  3. Company Expansion Expand into Europe to gain continued growth and scale
  4. Digital progression Continue to build on our digital capabilities to assure agility and sustain competitiveness

Key to KPIs

  1. Revenue
  2. Gross profit
  3. Gross margin
  4. Adjusted EBITDA
  5. Cash
  6. Cash generated by operations
  7. EPS
  8. Fully diluted adjusted EPS

Key to risks

  1. Unplanned service disruption
  2. Data loss and cyber attacks
  3. Over-reliance on suppliers
  4. Inability to attract and retain top talent
  5. Uncertain competitive landscape
  6. Price erosion
  7. Legal and regulatory non-compliance
  8. Unsuccessful M&A strategies

The opportunity for UX and CX to win in the Experience economy

Hybrid here to stay

Fundamentals are more important than ever

The ESG Committee oversees the development and activity of Gamma's ESG agenda.