Liverpool's Energy and Carbon Report 21/22
A look at what the club says in their Annual Report
Liverpool’s Annual Report for the year to 31 May 2022 was published last week and is available here. It includes a mandatory annual Streamlined Energy and Carbon Report (SECR). The reports aim to “increase awareness of energy costs within organisations, provide them with data to inform adoption of energy efficiency measures and to help them to reduce their impact on climate change. They also seek to provide greater transparency for stakeholders”.
This can be quite technical stuff. If you have any expertise on these and want to share them, please comment below or get in touch. In the meantime, here are a few points I have noted:
The SECR is short. At roughly half a page, it is slightly longer than last year’s but still shorter than most other clubs. Of course, the length of it should not be taken as an indication of a club’s performance on environmental issues. Liverpool are considered to be one of the leaders in environmental sustainability in football, for instance, topping the Sport Positive Premier League 2021, and being a signatory to the UN Race to Zero commitment.
The club has set out more on its approach and work on sustainability in ‘The Red Way’. Still, more information in this SECR - though not mandatory - could have helped clarify some specific points.
For example, there is no mention of the club’s future approach to ‘scope 3’ emissions. Scope 3 emissions cover “all the emissions associated with processes and consumption in an organisation’s value chain” and includes fan travel, club travel and more. Understanding these is therefore hugely important to prioritising climate action. Reporting on these is not required but is “strongly encouraged where this is a material source of emissions” according to the guidance.
Despite this, no Premier League club reported on all scope 3 emissions in their 20/21 SECRs. That said, both Arsenal and Spurs, in their 21/22 accounts, have set out plans for full scope 3 assessments and baselining in the coming year. Alongside this, Wolves have now stolen a march on other clubs and included scope 3 figures in their latest annual report (more to follow on that in another post). So it’s hard to tell if this is an area where some other clubs are now moving forward more quickly, or if the club is simply working away on it behind the scenes.
Either way, my understanding is that Liverpool will be required to make more extensive climate-related disclosures in their next annual report for 22/23. As one of a small number of Premier League clubs with over 500 employees and a turnover of more than £500m Liverpool will be in scope for new mandatory climate-related financial disclosures.
This will include … “disclosures on climate change-related risks and opportunities, where these are material. The disclosures should cover how climate change is addressed in corporate governance; the impacts on strategy; how climate-related risks and opportunities are managed; and the performance measures and targets applied in managing these issues.”
Back to the SECR, here is the table presented in the report:
As mentioned above, this table does not include figures for scope 3 emissions, and there are a few other points to note.
Liverpool’s reported energy consumption in 2021-22 increased by 17%. The reasons are not clear. A couple of clubs have put their increases in 2021-22 down to the end of Covid lockdown. On the other hand, at least two others have seen their energy use go down over this period. Possibly Liverpool competing strongly for four trophies and the associated number of games played was a factor? It’s hard to tell.
The table states total emissions at 3,293 Tco2e (an increase of nearly 10%) though the accompanying narrative in the report states that “The Group is now carbon neutral”. This may seem contradictory, but I assume it’s reporting requirement quirk. Emissions figures in the table are likely “location-based” emissions, while the narrative saying they are carbon-neutral is referring to “market-based” emissions.
Finally, Liverpool’s chosen ‘intensity metric’ is turnover, the same as many other clubs. As Liverpool’s turnover has increased at a faster rate than its emissions increase, the ‘intensity ratio’ has gone down. West Ham’s SECR reports a decrease for similar reasons.
The aim of intensity reporting is to allow comparisons over time or with other organisations. To my mind, the use of different metrics by different clubs and the somewhat odd numbers that it can produce highlight the need for change here.
More generally, the four different clubs SECR’s I’ve looked at so far for this reporting year all take very different approaches to their reporting. This makes any comparisons and a picture of the totality difficult. This fits with the Financial Reporting Council noting that “more needs to be done to make these disclosures understandable and relevant for users”.
The issue of how best to ensure consistent and comparable reporting across clubs is an area where further work would be beneficial - and is an issue I may return to in a future post.
A few additional notes:
I’ve not attempted to compare SECR emissions figures for different clubs as only a small number of 2021/22 annual reports have been published so far.
SECR’s are only mandatory for businesses with a turnover of £36 million or more, a balance sheet of £18 million, or more than 250 employees. In effect, this likely means Premier League clubs only, though I will keep an eye out for others.
I’d be interested to hear about any reporting requirements in other countries.
For a more detailed analysis of Premier League clubs sustainability commitments see Sport Positive Premier League 2021. A 2022 update should be out soon.
For a more detailed analysis of Liverpool’s annual accounts see Swiss Ramble.
This is my second look at one of these club SECR’s. The first was Spurs. I’d welcome any feedback, corrections or suggestions on any aspects of it.
Fran James (he/him)
Football and Climate Change Newsletter
@fbandclimate
footballandclimatechange@gmail.com