We have committed to reduce our own greenhouse gas emissions by 80% in advance of the target date of 2050 set by the UK Government. Against our baseline for continuing operations, to date we have achieved an approximate 38% reduction.

We report our greenhouse gas emissions in line with our corporate responsibility reporting principles, which includes our interpretation of the World Resources Institute Greenhouse Gas Protocol. The Protocol provides a breakdown of direct emissions (Scope 1), indirect emissions resulting from purchased electricity (Scope 2) and other indirect emissions (Scope 3). We believe our breakdown provides greater transparency and focuses attention on those emissions over which we have the greatest control.

During 2007/08, our Scope 1 and Scope 2 greenhouse gas emissions amounted to some 4.1 million tonnes CO₂ equivalent, compared with 4.3 million tonnes in 2006/07 and 4.8 million tonnes in 2005/06.

Total Scope 1 and 2 emissions per £million of revenue amounted to some 457 tonnes CO₂ equivalent* in 2007/08 compared with 471 tonnes in 2006/07 and 521 tonnes in 2005/06.

Methane leakage from our gas networks accounts for some 61% of this year’s reported Scope 1 and 2 emissions. During the year, we replaced approximately 1,850 kilometres of old iron pipes in the UK, the largest source of these emissions.

Losses from our electricity transmission and distribution networks account for a further approximate 5.6 million tonnes CO₂ equivalent, compared with 5.1 million tonnes in 2006/07 and 5.0 million tonnes in 2005/06. These losses, and consequently the resulting emissions, are largely driven by factors outside our direct control (for example, the fuel used by individual generators and the physical distance between generation and centres of demand). For this reason, we class these as Scope 3 emissions.

Detailed rationale for reporting electricity tranmission and distribution losses as Scope 3

For this reporting period, we have not included the emissions associated with the operations acquired with KeySpan because we need to conduct an emission inventory and verification process before we can include those emissions in our baseline and in our reported absolute emissions.

Notwithstanding,  the most significant emissions across the Company are made from our electricity generation plants in New York City and Long Island, including the Ravenswood generation station. Since we acquired them up until 31 March 2008, these plants emitted approximately 5.7 million tonnes of carbon dioxide.

* Excludes revenue attributable to KeySpan