Greenhouse gas emissions

Methodology

Greenhouse gas emissions data is reported in line with an operational control method and in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard. Our reporting boundary for Streamlined Energy and Carbon Reporting (SECR) is consistent with our reporting boundary for the purposes of our financial statements. Data covers a 12-month period from 1 January 2025 to 31 December 2025. Pro-rated methods have been used where data does not cover the full 12-month period.

Under the GHG Protocol, organisational boundaries can be established using the equity share or the control approach. The business applies the control approach and, within this, uses the operational control method.

As a business, we use a tool called the Global Property Database (GPD) to record and monitor locations which we either own or lease. All locations listed on the GPD for the purpose of GHG emissions reporting falls within our organisational boundary. We do not report emissions from every location as some fall outside of our operational boundary. We assess each location using defined criteria to determine operational control. More information is available in the Basis of Reporting.

Regional-specific emissions factors are used where available. Where these are not available, we use emissions factors published by the UK Department for Energy Security and Net Zero (DESNZ).

Emissions factors for electricity consumed by commercial locations in the United States are published by the United States Environmental Protection Agency (US EPA). The most up-to-date Emissions and Generation Resource Integrated Database (eGRID) factors are published by US EPA.

Emissions factors for both electricity and natural gas consumption in Australia are published by the Department of Climate Change, Energy, the Environment and Water. Emissions factors for Sweden’s (SWE) natural gas are published by Swedenergy and electricity emissions factors are taken from the European Residual Mix (AIB). Electricity emission factors for Saudi Arabia (KSA), Sweden (where not already covered), all other international locations and US residential are published by the IEA.

For this reporting cycle, the latest UK Government emissions factors published by the DESNZ have been used for majority of Scope 1 and 3 calculations.

Emissions factors published by both DESNZ and the US EPA are presented as CO2e and cover all six applicable greenhouse gases listed under the Kyoto Protocol. For further information on the inclusion of HFCs in the reported inventory, please refer to the section on fugitive emissions.

Scope 2 greenhouse gas emissions using the GHG Protocol ‘market-based’ method are calculated in line with the GHG Protocol Guidance, using residual-mix emission factors where available for our UK, US and Swedish operations. For the KSA, Australia and International, ‘location-based’ emissions factors are used as supplier emissions factors or residual mix factors are not currently available. Sites that consume grid electricity backed by Renewable Energy Guarantee of Origin (REGOs) have been taken into consideration within the calculations. The Scope 2 greenhouse gas emissions² associated with the GHG Protocol ‘market‑based’ method are 183,562 tCO2e.

Greenhouse gas emissions related to business travel include air travel data for most of the global business, rail data for business units operating in the UK and US, and vehicle travel (including hire car, company car and personal car) data for business units operating in the UK, US and Australia. These data sets are taken from supplier procurement records. In 2025, due to data quality, 2024 data was used for 2025 and adjusted based on headcount. This has been resolved for 2026. 

The principal record of the Group’s worldwide facilities is the Legal department’s GPD. The database holds records of all locations which are either wholly owned, leased or licensed sites.

Greenhouse gas emissions are primarily calculated from energy consumption records, eg invoiced data or meter readings. For the UK & International businesses, these are reported via the Group’s global environmental database (CR Desktop). Data related to the US business is provided quarterly for internal use, in addition to a full annual data submission. Where consumption records are not available, estimates may be used; these are highlighted within the database.

Where actual usage data is not available for facilities and residences within the GPD, estimated consumption is based on the type and size of the building. If this data is unavailable, a default benchmark factor or alternative estimation method is used.

Emissions from non-wholly owned subsidiaries are included in the dataset if BAE Systems has operational control of the location. For most of these locations, the joint venture either operates from a CR Desktop reporting location or is included in benchmarked estimates. For the purposes of calculating emissions, we have excluded dormant companies as it has been assumed that they do not consume energy.

Equity accounted investments detailed in the Annual Report are not currently included. These investments represent BAE Systems Scope 3 emissions. Emissions from pension scheme properties not occupied by the Group are not included. Trading of emissions are not considered for the purposes of reporting. For example, where the business has a requirement to maintain compliance with trading schemes, eg UK ETS, the total energy consumed is reported regardless of emissions trading.

Climate-related data, models and methodologies are often relatively new, are rapidly evolving and are not of the same standard as those available in the context of other financial information, nor are they subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. In addition, we may face challenges in relation to our ability to access data on a timely basis and the lack of consistency and comparability between data that is available.

Some of the data, models and methodologies used to prepare the information set out in this report may derive from third parties over which BAE Systems plc has no control, and may have been based on different or unknown methodologies. The underlying assumptions, interpretations or methodologies may not have been independently verified and could therefore be inaccurate.

As these challenges and the market’s response to them evolve, we may re-evaluate our approach, update methodologies and data we use, and may amend, update and recalculate certain sustainability disclosures in the future.