Corporate report

HMRC annual report and accounts 2024 to 2025: Sustainability Review

Published 17 July 2025

“The government is committed to accelerating progress to net zero, and I’m proud of HMRC’s role in this transition. This year marks the final year in the current set of Greening Government Commitments (GGC), during which we have made significant progress, in particular, on reducing greenhouse gas emissions by 66% against our 2017 to 2018 baseline [see figure 17 on page 68]. This gives us a strong footing as we progress towards our goal of being a net zero carbon organisation by 2040.”

Andrew Pemberton
Chair of HMRC’s Sustainability Board

Becoming more sustainable

We measure our performance against GGC, assessing our impact on the environment and our organisational sustainability. The commitments provide a framework for departments to reduce their environmental impacts between 2021 and 2025, compared against the baseline year of 2017 to 2018.

How we are performing

HMRC’s Sustainability Board acts as guardian of the organisation’s Sustainability Strategy, ensuring it remains systemic and fit for purpose, relevant and instrumental to building a trusted and modern tax and customs department in the UK.

Our network of modern regional centres has helped us to reduce our carbon footprint and water-usage, increase recycling and reduce the waste we send to landfill. Our regional centres all have an Energy Performance Certificate rating of B or higher and achieved a Building Research Establishment Environmental Assessment Method (BREEAM) rating of ‘excellent’ or ‘very good’. Although we don’t own or control significant natural capital, this year we developed a nature recovery plan, the HMRC Nature Strategy, to identify the areas where we can reduce negative environmental impacts of our estate and the opportunities to improve biodiversity. We have also carried out Climate Change Risk Assessments across our estate and developed a Climate Change Adaptation Plan.

We make sure our contracts adhere to Government Buying Standards and encourage our suppliers to go beyond the minimum requirements. We require suppliers for in-scope contracts to provide a Carbon Reduction Plan confirming their commitment to achieving net zero. We also assess the social value of our contracts, with all our procurements including a minimum 10% weighting allocated to social value, environment and sustainability, in line with government guidelines.

We are making good progress towards eliminating consumer single-use plastics from our estate and work with suppliers to seek more environmentally friendly alternatives. For example, we have implemented ‘bring your own cup’ discount schemes across our estate to reduce the use of single-use cups, and coffee cup recycling schemes are also in place

We recognise that a significant proportion of our emissions lie in our supply chain and we are increasing our efforts to understand and reduce these emissions. This year, we introduced a new tool to better track Environmental, Social, and Governance risk and compliance across our supply chain, helping us to drive positive impact at scale, by working collaboratively with our suppliers towards net zero. Additionally, we integrated mandatory carbon reporting in our standard terms and conditions and developed an educational module for suppliers to upskill them on reporting requirements.

[For further detail on our performance against our Greening Government Commitment targets, see Annex 3 Sustainability data tables.]

Figure 17: Greenhouse gas emissions (Greening Government Commitment)

Our target for greenhouse gas emissions combines emissions from our buildings and domestic business travel. We have achieved a 66% reduction from our 2017 to 2018 baseline, due to our move from legacy offices into more energy-efficient regional centres and our continued efforts to reduce business travel.

Figure 18: Waste generated

The 70% reduction in waste generated, from our 2017 to 2018 baseline, has been achieved through smarter waste management, behaviour change, reductions in paper use and IT efficiencies.

Figure 19: Water consumption

The 60% reduction in water consumption, from our 2017 to 2018 baseline, has been achieved through moving to more water efficient regional centres.

Our social impact

Many of our people support their local communities by volunteering in schools, charities and third sector organisations in public duty roles, such as being school governors or magistrates. Our Tax Facts educational programme continues to attract strong support from volunteers, who help deliver a gentle introduction to the world of tax to young people aged 8 to 17.

Climate-related financial disclosures

This year we are continuing to report on climate-related financial disclosures, consistent with HM Treasury’s Task Force on Climate-related Financial Disclosures (TCFD) guidance which interprets and adapts the framework for the UK public sector. We have complied with HM Treasury’s guidance for Phase 1 and Phase 2.

Read about the new requirements on climate related financial disclosures on GOV.UK. We have complied with this guidance by including recommended disclosures on governance (A to C), risk management (A to C) and metrics and targets (B). We are not required to include disclosure for metrics and target (A and C) as climate is not a principal risk.

Our governance for climate-related risks

Reporting to the HMRC Strategy Committee and, when required, to the Executive Committee (ExCom), HMRC’s Sustainability Board ensures that sustainability considerations are integral to our decision-making and to our ways of working. The Board met every 2 months in 2024 to 2025 to oversee our sustainability and net zero commitments and identify and prioritise enterprise sustainability risks. Our Sustainability Strategy was agreed at HMRC’s Strategy Committee in July 2023.

The Sustainability Board is chaired by our ExCom Sustainability Champion, HMRC’s Director of Communications and Guidance, Andrew Pemberton. Non-Executive Board Member Bill Dodwell, holds climate change within his portfolio at the HMRC Board. We report on our performance against sustainability metrics and targets in the ExCom monthly performance hub. Our Audit and Risk Committee have reviewed our plans and approach to TCFD.

Managing climate risk

In 2024 to 2025, we reviewed our previously identified and assessed risks associated with the physical impact of climate change and the transition towards a low carbon economy. Key risks relating to the potential effects of extreme weather on our operations have been incorporated in our departmental risk management processes and governance.

We don’t currently consider climate to be a principal risk for HMRC because environmental risks are not expected to critically impact our ability to deliver our strategic objectives. We have already taken significant steps to rationalise our property and IT estates, transforming HMRC into a more efficient and less carbon-intensive department and we are working to mitigate the potential impacts of extreme weather.

We continue to deepen our understanding of climate risks, notably through modelling the impacts of both 2°C and 4°C warming scenarios, which will inform current and future climate change adaptation measures.

[Read more on our approach in the Risk management and assurance section of the Financial Review]

Metrics and targets for climate-related risks

We use a variety of metrics to assess climate-related risks and opportunities, which we have reported on publicly for several years. Our performance data on sustainability comes from a range of internal and external suppliers and we follow the GGC reporting methodology. The Department for the Environment, Food and Rural Affairs verifies the data and the Carbon Trust has externally verified our methodology on supply chain emissions, which sit outside of the GGC requirements.

To understand scope 1, 2 and 3 emissions and the GGC see GOV.UK.

[Read Figures 17 to 19 for our performance over time for each of our metrics for climate-related risks and opportunities.]

How we contribute to UN Sustainable Development Goals

Strategic objective	What we’re doing	UN Sustainability Goals
Close the tax gap	We collect the money that pays for the UK’s public services and gives financial support to people by ensuring that the tax and customs system continues to work in the right way to bring in revenue due. [Read more in the Closing the tax gap section of the Chief Executive’s Performance Report.]	1: No poverty, 8: Decent work and economic growth
Improve day to day performance and the overall customer experience	We are constantly expanding and improving our online services and systems to improve the customer experience. [Read more in the Improving day-to-day performance and the experience of our customers in the Chief Executive’s Performance Report.]	8: Decent work and economic growth
Reform and modernisation of Tax and Customs administration	We are changing how we deliver services to meet evolving challenges and deliver a simple and smooth experience for our customers. [Read more in the Reforming and modernising Tax and Customs administration section of the Chief Executive’s Performance Report.]	8: Decent work and economic growth
Build a high-performing organisation, with a skilled and engaged workforce	We are building the leadership, tax and digital skills that we need for the future. We are taking forward initiatives such as our award-winning Tax Facts education programme for young people, which allows colleagues to volunteer in their local community, while gaining valuable transferable skills. [Read more in the Building a high-performing organisation, with a skilled and engaged workforce section of the Chief Executive’s Performance Report]	4: Quality education, 5: Gender equality, 10: Reduced inequalities
Support wider government economic aims through HMRC’s work	We continue to ensure the customs regime remains robust and effective, and we give financial support to people. [Read more in the Supporting wider government economic aims through HMRC’s work section of the Chief Executive’s Performance Report.]	1: No poverty, 8: Decent work and economic growth