BOE confirms 2040 net-zero target, restates baseline
The Bank of England has published its 2026 update to the Climate Transition Plan, confirming its 2040 net-zero greenhouse gas emissions target for physical operations. The update restates the baseline and interim milestones, reflecting methodological changes and external framework developments.
Recalibrating the net-zero trajectory
The Bank of England's 2026 Climate Transition Plan (CTP) update reaffirms its commitment to achieving net-zero greenhouse gas (GHG) emissions from physical operations by 2040.
This target remains calibrated to a pathway consistent with limiting global warming to 1.5°C.
The update, however, includes a restatement of the Bank's baseline, historical emissions, and interim milestones due to improved data and updated methodologies, including a move to a purpose-built carbon accounting platform.
Despite these recalculations, the Bank's strategic ambition and direction towards decarbonisation remain unchanged.
Progress is monitored against interim emissions reduction milestones: 40% by 2025, 62% by 2030, and 84% by 2035, all relative to the restated 2015/16 baseline.
These percentage reductions are consistent with the original 2023 CTP.
The Bank reported a 43% reduction in total emissions between 2015/16 and 2025/26, from 62,432 tCO₂e to 35,306 tCO₂e, exceeding the 2025 interim milestone.
This progress reflects a move to renewable electricity, operational efficiency improvements, and reductions in supplier emissions.
Supply chain and estate at the core
The implementation strategy for decarbonisation actions is integrated with planned investments in the Bank's estate, supply chain, and critical systems.
Decisions are assessed based on whole-life cost, emissions impact, operational requirements, and long-term resilience.
Most of the Bank's emissions originate from its supply chain, making targeted supplier engagement a central component of its reduction efforts, particularly in high-emitting categories.
The largest drivers of emissions reduction between 2015/16 and 2025/26 were purchased goods and services, followed by electricity, capital goods, business travel, and stationary combustion.
These reductions are attributed to the Bank's shift to renewable electricity, enhanced operational efficiencies, and economy-wide decarbonisation of the electricity grid.
Delivery of the transition objectives is sensitive to external factors such as the pace of decarbonisation within key supply chains, the availability and cost of abatement technologies, and broader energy market conditions.
Pragmatic path, persistent challenges
This update confirms the Bank's pragmatic approach, embedding decarbonisation within existing operational and risk management frameworks.
While the restatement of the baseline enhances accuracy, it also highlights the dynamic nature of emissions accounting and the ongoing need for robust data.
The reliance on supply chain decarbonisation and external factors introduces inherent delivery risks, suggesting sustained effort beyond internal operational adjustments will be crucial for the 2040 target.