Electrocomponents' ESG approach April 2021
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Internal 1 Electrocomponents’ ESG approach April 2021
Internal
Overview
Building on our strong track record:
An ESG leader in global industrial distribution, ambition to be
top tier across all sectors*
Strong track record in reducing our environmental impacts –
31% reduction in CO2 due to premises energy use since
2015**
Focus on education programmes to inspire future engineers
and innovative solutions to key global issues
Extensive support for customers, colleagues, suppliers and our
communities during COVID-19, embedded into BAU
Four impact pillars with 2025 targets and initiatives identified
Environment
Customers and suppliers
People and health & safety
Community
Underpinned by strong governance, ethics and compliance
Aligned with our purpose and Destination 2025 strategy
ESG mission aligned with our purpose
ESG success factors being integrated into our five strategic
priorities, group targets and key initiatives
Building alignment with strategic investment plans
2 * See slide 18 for our leadership level performance in key ESG benchmarks
** Emissions updated to reflect changes in reporting methodology and emissions factors
Internal
Our ESG approach addresses our most material issues
Buildi
► Materiality assessment conducted in
January 2020 to identify key ESG issues
► Customers, suppliers, our people,
shareholders, regulators, media and NGOs
engaged in the process
► 5 key material issue groupings identified:
• Environment
• Customers and suppliers
• People
• Community
• Governance, ethics & compliance
► The materiality assessment combined with
the UN’s Sustainable Development Goals
guided the development of our ESG plan,
targets, KPIs and reporting
3
Internal
Our ESG approach at a glance
Our purpose and ESG mission:
Making amazing happen by inspiring a more sustainable world through
education and innovative solutions that improve lives
Four strategic impact pillars:
Environment Customers and People and health Community
suppliers & safety
Underpinned by:
2025 targets and initiatives
4 Strong governance, ethics and compliance
Internal
Four strategic pillars
Environment Customers & suppliers People and health & Community
safety
Our focus Proactively limit our Work with our suppliers to improve Build a safe, inclusive and Enable education and innovation
environmental impacts to tackle the sustainability of our value dynamic culture which enables that improve lives and inspires
climate change and ensure our chain and deliver innovative and our people to bring their true self future engineers
business grows sustainably sustainable solutions for our to work and thrive
customers
2025 Be 50% more sustainable by Grow our customer NPS score Increase our female leader Targets in development for:
halving the intensity of our to 70 population 2% year on year new global charity
Targets
emissions, packaging, waste Further ESG targets in from baseline of 26% in 2019 partnership, volunteering and
and water impacts* development 30% reduction in All Accident education programme
rate*
Uplift our employee
engagement score to 77
Key Energy and carbon reduction Low carbon product ranges Health & safety Education for engineers of the
– direct operations and fleet Product sustainability flags Diversity & inclusion future
initiatives
Packaging, waste & water End to end ethical & Employee engagement Global partnership with
reduction sustainable value chain – Working practices, human Engineers Without Borders and
Transport & logistics sourcing, production, rights, fair pay new global charity partnership
optimisation certifications, transport & Volunteering
Environmental management logistics, packaging, labour
systems & compliance standards & human rights
Supporting 6
SDGS
5 *2018 baseline
Internal Environment Our focus Proactively limit our environmental impact to tackle climate change and ensure our business grows sustainably 2025 target Be 50% more sustainable by halving the intensity of our emissions, packaging, waste and water impacts from a 2018 baseline 6
Internal
Environment
Energy and CO2 emissions Current progress
31% reduction in in absolute emissions since 2015 (46% intensity
reduction)*
Electricity from renewable sources is 11% of total electricity use
Solar panels on new Bad Hersfeld DC – 750 kW capacity
Energy efficiency measures and LED lighting
EV charge points installed in US, UK, France, Germany and
Netherlands
Early TCFD supporter working towards full disclosure
Future focus
Global energy optimisation and decarbonisation strategy for
our 12 DCs, offices, RS Locals, company cars and vans
Transport & logistics optimisation to reduce complexity and
improve sustainability in the end-to-end supply chain e.g.
optimising transport legs and minimise air freight
Solar panels and demand side response for Bad Hersfeld TCFD compliance - conduct climate scenario analysis
As part of the expansion of our Bad Hersfeld distribution centre in
Germany, we have installed a major solar energy system on the roof of
the new 9,000 m² building, which is due for completion in 2021. The 750
Net-Zero
kW capacity photovoltaic solar panels convert solar radiation directly Long-term aim
into electricity, providing energy to the RS site and feeding surplus
power into the grid.
7 * At constant exchange rates with emissions updated to reflect changes in reporting
methodology and emissions factors
Internal
Environment
Packaging, waste and recycling Packaging Waste and recycling
Current progress Current progress
15% reduction in packaging 33% reduction in waste
intensity since 2015* intensity since 2015*
3 DCs using automated 79% of our waste is
packaging machines recycled with many key
Optimising packaging sites sending no waste to
weight and volume landfill
Packaging made from
recycled materials in UK Future focus
Reduce waste, increase
Future focus recycling and
Optimise packaging size and packaging re-use and
weight for each product / limit single-use plastic.
order Zero waste to landfill at
sites where it is possible
100% recycled packaging for
all products sold
Automated packaging machines Implement automated
We’ve introduced automated packaging systems at our DCs in packaging machines
Nuneaton, UK and in the Americas and Germany (due online in 2021). globally
We’re optimising packaging size and weight, introducing sustainable
materials and increasing use of recyclable packaging. * At constant exchange rates with reports updated to reflect changes in
reporting methodology. Waste reports for one major site updated to use
8 supplier data
Internal
Environment
Environmental management systems
Current progress
Certified Emissions Management and Reduction Scheme (CEMARS)
Greenhouse Gas Data Verification standard, ISO 14064-1 UK holders
11 of our 12 global DCs (either owned or leased) have environmental
management systems in place - four certified to ISO 14001
39 further sites, including the RS Local trade counters, are certified to
ISO 14001 or have internal environmental management systems
By revenue, over 52% of our operations are covered by ISO 14001
Future focus
Further extend coverage of ISO 14001 across Electrocomponents
operations
Environmental management system for Hong Kong DC
9
Internal
Customers and suppliers
Our focus Customers
Work with our suppliers to improve the sustainability of
our value chain and deliver innovative and sustainable Current progress
solutions for our customers Expanding sustainable product range e.g. RS Monition (IoT, energy, carbon
2025 target & water testing equipment), variable speed drives, high-efficiency motors,
low-energy lighting and leading automation solutions
Grow our customer net promoter score (NPS) to 70.
Further ESG targets in development Improving sustainability attributes of products, external accreditations and
profiling to customers – RS PRO key focus
Future focus
Expand sustainable product range and profile online, through innovation
labs in our DCs and DesignSpark
Rollout smart factory solutions through RS Monition and IESA
Work with suppliers to improve product sustainability attributes,
certifications and profiling to customers
RS Monition helps reduce customers’ energy losses, carbon
emissions and costs
RS Monition’s energy loss survey combines thermography and
ultrasonic air-leak technologies to identify and quantify energy
losses in customer operations. Combined with onsite repair, it
reduces costs, wasted energy and carbon emissions.
10 We’re working with GSK to conduct energy loss audits at over 55
of its sites in 25 countries, which has reduced emissions and costs.Internal
Customers and suppliers
Suppliers
Current progress
Expanding DCs in US and Germany to support local sourcing,
delivery and storage closer to customers, reducing delivery miles
and environmental impacts whilst also improving resiliency
Transport and logistics optimisation – e.g. migrating air to sea and
road freight
Ongoing work with our suppliers to meet the highest ethical and
legal standards and continuously improve. We take a risk based
approach to auditing supplier performance in the areas of human
rights, corruption, legal compliance and product standards.
Future focus
Collaborate with suppliers to improve end to end sustainability of
value chain – sourcing, production, sustainability certification,
transport & logistics, packaging & waste
Longer term Net-Zero aim across the whole value chain
Collaborate with suppliers to develop and showcase sustainable
products, services and solutions to customers using our DCs as
innovation labs
11Internal
People and health & safety
Our focus
Build a safe, inclusive and dynamic culture which enables our
people to bring their true self to work and thrive
Our 2025 targets
• Increase our female leader population 2% year on year from a
baseline of 26% in 2019
• 30% reduction in All Accident rate*
• Uplift our employee engagement score to 77
12
*from a 2018 baselineInternal
People and health & safety
Current progress
Executive sponsored D&I strategy focusing on wellbeing, gender, race
and LGBTQ+
Four inclusion networks – race, gender, LGBTQ+ and wellbeing which
align to the global D&I strategy. Each host inclusion & wellbeing events,
campaigns and training throughout the year
Engagement score increased to 72 in 2020
Building future skills: apprenticeship programme, Future Shapers talent
development programme, Learning Academies in digital and data
All Accident rate at 0.69 / 200k hours – down 22% in year
Future focus
Continued focus on inclusion, wellbeing and mental and physical
health emerging from COVID-19
Train 300 leaders in mental health awareness
Set long-term gender and racial diversity ambitions
Continued focus on safety and avoiding near-miss accidents
13Internal
Community
Our focus Current progress
Enable education and innovation that improves lives
Global partnership with Engineers Without Borders - 7k students
and inspires future engineers.
involved in engineering design challenges that address key global
Our 2025 targets issues aligned to the UN SDGs
Targets in development covering global charity
Our mobile innovation centres, Titan II & MAX, showcase the latest
partnership, volunteering and education programme engineering technologies and inspire future engineers. They travel
around Europe each welcoming around 30k visitors from schools,
customers and suppliers (on pause during COVID-19 pandemic)
STEM educational resources and skills training from primary to university,
including lesson plans, EdTech products, employability skills and home
projects during COVID-19
Awards, events & competitions – RS STEMFEST; Sponsorship of young
engineer competitions in Germany & UK (BrightSparks); Maker Fairies
events
Empowering young female engineering talent through STEM initiatives
such as Girls Go Tech in Hong Kong to sponsorship of the IET’s Young
Woman Engineer of the Year
All colleagues have two paid volunteering days – includes 220 RS STEM
Ambassadors
14Internal
Community
Future focus
Establish and deliver our global partnerships with Engineers Without
Borders
Continue our STEM and Grass Roots initiatives and educational
solutions (EdTech and OKdo kits) to support, develop and inspire
primary school to higher education students to become future
engineers and technologists
Supporting our markets to increase their involvement and amplify the
Titan II & MAX trucks – inspiring innovation, education reach and impact of our STEM and Grass Roots programmes globally
and future engineers
Our two mobile innovation centres feature the latest
technologies such as our DesignSpark platform, Raspberry Pi,
3D printing, robotics, IoT, thermal imaging – as well as virtual
reality (VR) and augmented reality (AR) technology to bring
innovation to life.
Titan II tours North Europe and MAX Central Europe. Each
year they welcome around 30k visitors aboard from schools
and universities, as well as our customers and suppliers.
They offer interactive experiences demonstrating the latest
technology and inspiring the next generation of STEM talent
to pursue a career in engineering.
Titan and Max are on pause during the COVID-19 pandemic.
15Internal
Our ESG approach in action during COVID-19
Major focus on our people’s Continuing to deliver a seamless Keeping critical industries running
safety and wellbeing first class service to our customers
16 3D printing of visors for frontline staff Supporting ventilator production Kits for Kids – home educationInternal
Approach underpinned by strong governance, ethics and compliance
Governance Ethics and compliance
Current progress Current progress
Board and Senior Management Team We have a suite of policies and procedures in place
oversight of ESG to maintain the highest ethical standards, covering;
Codes of conduct for employees and suppliers
Global ESG Delivery Group established
Supplier ethical trading policy and declarations
Future focus Business ethics and human rights
Establish ESG Leadership Committee
Anti bribery, corruption and competitive
behaviour
Privacy, data and cyber security
Future focus
Policy library and data centre in ESG section of
website
17 Link to our ethics & compliance policy libraryInternal
ESG benchmarks and standards
Our ESG reporting is informed by best practice standards and we perform strongly in external benchmarks:
Frameworks and standards ESG external benchmarks
CDP Climate Change leadership score of A-
Sustainalytics rating: 8th/13,410 (all companies), 2nd in
sector
MSCI rating: A
EcoVadis Gold rating
FTSE4Good Index score: 3.2/5
18Internal
Our ESG approach is delivered across our global network
Our nine brands and 7,000+ people put our purpose and ESG mission into
action globally, having a positive impact across 32 countries
19Internal
Our future focus
We are on an exciting journey to evolve and strengthen our ESG approach to continuously
improve the value we deliver for our stakeholders. Over the next year we will focus on:
Community
Environment Customers and People Community
suppliers
Advance our actions Work with our suppliers to Build a diverse, Launch our exciting new
to run clean and green evolve the sustainability engaged and dynamic global charity partnership
business operations of our whole value chain, team, fully reflective of which utilises innovative
and develop our long- and develop innovative the customers and engineering to improve
term plan to be net and sustainable products, communities we serve, thousands of lives
zero services and solutions for and continue to globally, as well as
our customers develop a culture which enabling education that
enables our people to inspires the next
thrive generation of engineers
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