Why Your Carbon Footprint Dropped This Year — and Why That Might Not Be Good News

If your latest carbon footprint report shows a reduction from last year, take a careful look at where that reduction came from. The 2025 DESNZ greenhouse gas conversion factors — the numbers most UK organisations use for SECR reporting — include some significant changes. The Scope 2 electricity factor dropped 14.5%, falling to approximately 0.128 kg CO₂e per kWh. Battery electric vehicle factors fell 16%. Short-haul aviation factors were revised downward by up to 41%.

Your footprint may look better. Your operations may not have changed at all.

What changed in the 2025 factors and why

The DESNZ conversion factors are updated annually to reflect changes in the UK energy system. The electricity factor drops when the grid gets cleaner — more renewables, less gas. The 14.5% reduction reflects real progress in UK grid decarbonisation: more offshore wind, more solar, less coal. That is genuinely good news for the climate.

But it creates a reporting problem. A company that consumed exactly the same amount of electricity in 2025 as in 2024 will report a 14.5% lower Scope 2 figure. Nothing changed in the building. Nothing changed in the procurement. The number got smaller because the factor got smaller.

Why this matters for your SECR report

Most organisations filing SECR reports use year-on-year comparison as their primary measure of progress. The directors’ report shows this year’s emissions alongside last year’s. When the numbers go down, it looks like progress. When they go up, it demands explanation.

The problem: a factor-driven reduction and an operational reduction look identical in the numbers. Your SECR report does not distinguish between “we installed LED lighting and cut electricity consumption by 8%” and “we used the same amount of electricity but the grid factor dropped.”

Procurement teams reading your report will not make this distinction either. They will see a lower number and assume progress. That is fine until they start asking for evidence of operational changes — and your answer is “the government updated its conversion factors.”

How to tell if your reduction is real

Step 1: Compare consumption, not emissions. Before looking at your CO₂e totals, check your raw energy consumption in kWh, litres, or kilometres. Did your electricity consumption go down? Did your fleet drive fewer miles? Did your gas use decrease? If consumption is flat but emissions dropped, the reduction is factor-driven.

Step 2: Isolate the factor effect. Recalculate your current-year consumption using last year’s factors. The difference between that recalculated figure and your reported figure is the factor effect. The difference between the recalculated figure and your previous year’s reported figure is your operational change.

Step 3: Report both. In your SECR disclosure, include a note explaining any material factor-driven changes. This is not required by the regulations, but it is good practice — and it preempts the question from any procurement team that knows what they are looking at.

The benchmarking alternative

Year-on-year comparison against your own history has a structural weakness: it conflates factor changes, weather effects, business growth, and operational improvements into a single number. A cold winter increases gas use. A factory expansion increases electricity use. A grid decarbonisation reduces your Scope 2. None of these reflect management action.

Benchmarking against peers in the same period removes the factor problem entirely. If every business in your sector saw a 14.5% Scope 2 reduction from the electricity factor change, the benchmark adjusts automatically. A company that also achieved genuine operational savings will appear below the benchmark. A company that simply rode the factor change will sit at the benchmark.

This is the comparison that tells you something useful: are you doing better or worse than comparable businesses, right now, using the same factors?

The aviation factor trap

The short-haul aviation factor reduction of up to 41% deserves specific attention. If your business flies frequently on UK and European short-haul routes, your reported business travel emissions may drop dramatically. This is partly driven by improvements in fleet fuel efficiency and load factors, and partly by methodological refinements.

The risk: an apparent 40% reduction in business travel emissions could mask an actual increase in flights. If your company flew 20% more short-haul trips this year but the factor dropped 41%, your reported emissions still fall. Check your passenger-kilometres or flight counts before concluding that your travel policy is working.

Common mistakes

Celebrating a reduction you did not earn. A factor-driven reduction is not evidence that your energy management or travel policy is working. It is evidence that the UK grid got cleaner or that the methodology was updated. Communicate it accurately.

Ignoring the factor change in target-setting. If you set a target to reduce emissions by 10% per year, and the electricity factor dropped 14.5%, you have met your Scope 2 target without doing anything. That target needs adjusting to reflect the new baseline.

Assuming factors only go down. They usually do — the grid trend is toward decarbonisation. But individual fuel factors can increase, and new methodological decisions can raise certain categories. Do not build a reduction strategy that depends on favourable factor changes.

How CYF helps

CYF’s benchmark dataset shows how your emissions compare to other businesses in your sector and size band, using the same conversion factors in the same reporting period. This automatically controls for factor changes — your relative position reflects your operational performance, not the grid’s decarbonisation.

CYF also flags significant factor changes in your year-on-year comparison, so you can see at a glance how much of your reported reduction is operational versus methodological. The Circular Ecology analysis provides detailed factor-by-factor breakdowns.

Try CYF’s benchmarking to see where your footprint sits against your sector.

Methodology guidance from Alice Roberts, Head of Methodology at Compare Your Footprint.