Firstgroup PLC

At Group level, we have long-established and strong relationships with government officials and departments, as well as positive engagement with ministers. We work with both Government and opposition policy teams and advisers, as well as significant political influencers, including Parliamentary committee members. [...] We also engage with policymakers and seek to influence the development of policy both directly, and through the membership of sector trade organisations, who engage with national government and regulators to promote a positive policy environment for private sector transport. [...] This year we expanded our involvement in the various sustainability forums set up for the rail industry by the Rail Safety and Standards Board (RSSB). The managing director of TPE sits on its Sustainable Rail Executive and our Group Engineering Director chairs its Sustainable Rail Leadership Group.

We recognise our prominence as one of the largest UK transport operators and a FTSE 250 employer, and the need to uphold the highest standards of governance and ethics. Whilst we engage in industry collaboration and open discussions with government at all levels, we adhere rigorously to the Lobbying (Scotland) Act 2016 regulations, and our key personnel feature in the UK Lobbying Register. [...] Representatives from across the Group sit on influential and critical forums. Our Group Engineering Director chairs the Industry Sustainable Rail Leadership Group, and First Rail Head of Sustainability chairs the Air Quality Working Group. We also sit on the Rail Environment Forum and the Noise Working Group. These forums are essential to ensure that we can collaborate with fellow stakeholders for an industry-wide approach to challenges and opportunities.

Climate‑related matters are also embedded into FirstGroup's remuneration approach, with our long‑term incentive plan including specific targets driving the electrification of our bus fleet and a reduction in our Scope 1 and 2 carbon emissions (see pages 124‑125). Performance against these targets is reviewed half‑yearly by the Remuneration Committee of the Board. [...] The Executive Committee provides leadership and direction for the Group on sustainability matters, including climate change, with material issues presented by the Group Corporate Responsibility and Finance teams for discussion and decision‑making as they arise throughout the year. Executive responsibility for sustainability matters is held by the CEO. Executive responsibility for climate‑related financial risks and opportunities is held by the CFO, who represents these matters at Board level. [...] At divisional level, First Bus and First Rail have executive management individuals responsible for driving environmental sustainability across the divisions, leading on the development and implementation of decarbonisation strategies and risk mitigation actions. In FY 2023, First Bus appointed a new Chief Sustainability and Compliance Officer to oversee this agenda and set up a cross‑functional Decarbonisation Forum that meets monthly to set policy, drive action and review progress. Similarly, First Rail established a new Sustainability Leadership Group, including senior leaders from Finance, Operations and Engineering who meet quarterly to discuss climate‑related matters as part of a broader sustainability strategy for Rail. The Executive Committee receives regular divisional updates from the MDs of Bus and Rail. [...] This year, we have worked with our divisions to run a series of in‑depth TCFD and TPT planning workshops with key functions, from Commercial to Engineering, to expand governance around this agenda and facilitate further integration of climate considerations into business processes and decision‑making. [...] To strengthen ownership and accountability, climate related KPIs are embedded into our variable remuneration practices. For example, our Long Term Incentive Plan (LTIP) awards, made to the CEO, CFO and other senior leaders, include two environmental measures – one related to the number of zero emission vehicles in our bus fleet, and one linked to a reduction in our absolute Scope 1 and 2 emissions (see pages 124‑125 for more details).

Our Responsible Business Committee of the Board meets four times a year to review the practices and performance of FirstGroup and its subsidiaries, with respect to health and safety, our people and communities, the environment and our decarbonisation transition. At each meeting, the Committee receives a detailed performance update from First Bus and First Rail against specific commitments and targets and discusses strategic priorities going forward. To further support Board-level oversight of climate‑related matters, during FY 2025 we ran an in‑depth briefing session for the Board covering the development of this Climate Transition Plan and how it aligns with the reporting requirements of the UK's new TPT framework. In addition, the Audit Committee supports the Board in the management of risk, including climate‑related risks, and is responsible for reviewing the effectiveness of risk management and internal control processes. [...] The Executive Committee provides leadership and direction for the Group on sustainability matters, including climate change, with material issues presented by the Group Corporate Responsibility and Finance teams for discussion and decision making as they arise throughout the year. This includes assessing progress, identifying challenges, and making necessary adjustments to stay on track. The Executive Committee also integrates decarbonisation commitments into strategic decisions, major transactions, and risk management, carefully considering any trade-offs. Executive responsibility for sustainability matters is held by the CEO. Executive responsibility for climate‑related financial risks and opportunities is held by the CFO, who represents these matters at Board level. [...] First Bus and First Rail have executive management individuals responsible for driving environmental sustainability across the divisions, leading on the development and implementation of decarbonisation strategies and risk mitigation actions. In First Bus, their Chief Sustainability and Compliance Officer sits on their Executive Committee to oversee this agenda and participates in a cross‑functional decarbonisation forum that meets monthly to drive action and review progress. Similarly, First Rail has a sustainability working group, including senior leaders from sustainability, operations and engineering, who meet quarterly to discuss climate‑related matters as part of a broader sustainability strategy for Rail. The Group Executive Committee receives regular divisional updates from Bus and Rail leadership teams.

Transport is public facing, often the topic of public and political debate and subject to significant interaction with government at local, regional and national level. Our goals are to advocate for innovation and investment in sustainable mobility, and to make the case for transport infrastructure decisions that help reduce congestion, enhance customer experience and decrease journey times. We achieve this by engaging with a wide range of stakeholders and policymakers. **With government** At Group level, we have long‑established and strong relationships with government officials and departments, as well as positive engagement with ministers. We work with both government and opposition policy teams and advisers, as well as Parliamentary committee members, and MPs and councillors who are local to our businesses. We engage with policymakers and seek to influence the development of policy both directly, and through the membership of sector trade organisations in the UK, who in turn engage with government and regulators to promote a positive policy environment for private sector transport. We welcome the government's recent announcement on the launch of a Bus Centre of Excellence in partnership with the Chartered Institute of Highways and Transportation (CIHT) to upskill, recruit and retain a new generation of bus professionals, and we look forward to engaging proactively following its launch in the spring. [...] We comply with the Lobbying (Scotland) Act 2016 regulations and key personnel are registered with the UK Lobbying Register. FirstGroup's gifts and hospitality policy is strictly adhered to when engaging with stakeholders at all levels. As company policy, we do not make political donations. More information on our stakeholder engagement strategies can be found on pages 78‑80.