Environmental Leadership

We recognise the role we play in promoting environmental protection and are committed to conducting our business in a safe and responsible manner, including protecting and minimising the impact of our operations on the environment. We are focused on reducing our environmental impact and aim to continuously improve our performance. In 2024, we developed a dedicated Environmental Policy which is available at: investors.eurocell. co.uk. Applying to all colleagues across part of the Group, the  Policy outlines our commitments towards reducing emissions, energy consumption, biodiversity and environmental issues, waste and resource use, water use, and the environmental impacts of our products.

The environmental management systems implemented at our extrusion plants, secondary operations (foiling) facility and door manufacturing plant are all accredited to ISO 14001:2015.

Where sites are not certified to ISO 14001, we continue to maintain an environmental management system and have daily inspections to ensure permit compliance. Overall, 50% of our main manufacturing sites are certified to ISO 14001. We are continuing to develop procedures and guidance for those sites not currently certified, so that they are compliant with the standards by the end of 2025 and ready to seek certification in 2026. No environmental fines or penalties have been recorded in 2024 or 2023.

Central to our sustainability strategy is reducing the carbon footprint of our business and the impact our operations have on climate change, including minimising waste and reducing energy consumption and greenhouse gas emissions across all of our operations. We have now submitted near-term and Net Zero targets to the Science Based Targets initiative (‘SBTi’) and developed a Net Zero Transition Plan, as set out in the ESG Leadership section.

We are also pleased to report the following operational initiatives undertaken this year to reduce our energy consumption and greenhouse gas emissions:

• Completed the installation of solar panels at our main extrusion facilities in August 2024, which as of the publication of this report have yielded nearly 250,000 kWh of electricity at our Clovernook site
• Increased the proportion of renewable electricity we procure, from 94% in 2023 to 95% in 2024. This has largely been through consolidation of activities onto sites with existing renewable electricity contracts in place
• Replaced the boilers at our main extrusion site, Clovernook
• Continued to work to install LED lighting across all sites, which is now c.80% progressed, with a planned completion date at the end of 2025
• Replaced 12 LPG trucks in our material handling fleet with nine electric vehicles.

Energy consumption and emissions data

We have continued to develop our end-to-end carbon footprint methodology, which includes a full emissions analysis for 2023 and 2024, as set out in the table below.

^{Notes to table:}

• ^{We operate only within the United Kingdom and so values are for UK operations only}
• ^{A mathematical error was identified in the non-renewable fuels consumption energy figure in FY23. This has been corrected in the energy table and had no impact on the FY23 emissions calculation.}

^{Notes to calculations:}

• ^{Emissions and energy data presented for 2023 and 2024 is based on management estimates}
• ^{To calculate our emissions and energy usage data, we have followed the 2019 UK Government environmental reporting guidance. We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition). The Greenhouse Gas Protocol standard covers the accounting and reporting of seven greenhouse gases covered by the Kyoto Protocol. We are reporting our Scope 3 emissions, with guidance from the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard and the GHG Protocol Technical Guidance for Calculating Scope 3 Emissions, as required}
• ^{We have reported on all of the material emission sources from within the operational boundaries of the Group, as required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 and under the UK’s Streamlined Energy and Carbon Reporting (‘SECR’) requirements}
• ^{The Group has defined its organisational boundary using an operational control approach. Our reporting of Scope 1 and 2 emissions and energy data covers 100% of our global operations. Furthermore, our reporting of Scope 3 emissions covers 100% of our upstream and downstream value chain}
• ^{The emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2024 (the Department for Environment, Food and Rural Affairs (‘DEFRA’) factors) have been used for all Scope 1 and 2 categories and the majority of Scope 3 categories. For spend-based calculations, the UK Environmentally-Extended Input-Output (‘EEIO’) model factors were used. For weight-based calculations, EcoInvent and Idemat factors were used}
• ^{In line with the Greenhouse Gas Protocol, we continue to review our reporting in light of any changes in business structure, calculation methodology and the accuracy or availability of data.}

Energy consumption and emissions performance

Our Scope 1 emissions were consistent year on year despite movements within the category. There was a significant decrease in gas consumption at our Penny Emma Way site. We were also able to obtain more granular data on our refrigerant assets. Together these drove a decrease in Scope 1 emissions. However, due to an error in categorisation of vehicles in the prior year our diesel emissions increased in 2024, offsetting the aforementioned decrease. This error did not exceed our restatement threshold and therefore no prior-year restatement has been made.

Location-based Scope 2 emissions fell 4% to 10.6 ktCO2 e, and market-based Scope 2 emissions fell by 69% to 0.4 ktCO2 e, both were driven by the reduction in electricity consumption at our Eurocell Recycling North (‘ERN’) site as our Phase 2 operations were moved to our other recycling plant. As ERN is our only site without renewable electricity being procured, this significantly reduced market-based emissions.

In combination, location-based Scope 1 and 2 emissions of 20.2 ktCO2 e was down 2% compared to 2023 and market-based Scope 1 and 2 emissions of 10.0 ktCO2 e was down 8% compared to 2023.

We have calculated our Scope 3 emissions for 2024 to be 173.3 ktCO2 e, compared to 177.3 ktCO2 e in 2023, a decrease of 2%. This mainly reflects lower emissions from Purchased Goods and Services, down 4.1 ktCO2 e, driven by a slight reduction in spend.

The reduction in Fuel and Energy-related Activities was caused by the respective fall in Scope 1 and market-based Scope 2 emissions, and the fall in End-of-life Treatment of Sold Products was caused by a reduction in the emissions factor for recycling, as a result of a previous year error by DEFRA, which they have addressed this year.

We successfully conducted an employee commuting survey this year and therefore was able to use actual data, which could be extrapolated for the emissions calculation. This resulted in an increase from last year. We also obtained energy use data from a larger number of fabricators to calculate processing emissions, meaning our calculation had greater precision.

Reflecting these factors, total emissions (Scope 1, 2 and 3) were down 2% compared to 2023 for location-based, and 3% for market-based. However, due to a slight decrease in revenue, the intensity figures stayed reasonably consistent year on year.

Total energy consumption of 92,016 MWh in 2024 was a slight decrease on the prior year of 2%, which reflects consistent production volumes year on year.

Our main use of water is in the cooling process for extrusion, but it is also used to wash scrap PVC, remove impurities in our recycling operations and for employee welfare.

We have a closed loop water recycling system in extrusion, and water supply bills are scrutinised for abnormalities that would indicate a leak, following which the water provider would be contacted for repair.

The system significantly reduces the environmental impact of our processes, by conserving local water resources and reducing the amount of contaminated or unfiltered water entering back into the local environment. Minimising consumption and therefore reducing disposal costs also has a financial benefit to our business.

We use only potable water, supplied directly by the water provider, which is suitable for drinking. We do not abstract any ground or surface water. None of our sites are located in high flood-risk areas and all sites are provided with adequate welfare facilities, in accordance with governing legislation.

Water usage was identified as a key issue for our stakeholders in our ESG materiality assessment. Over the last few years, we have strengthened our material recovery, including improved water circularity. We will continue the work to improve our water usage data collection, and thereafter to define targets to increase water efficiency in our operations. This is dependent on investment and process changes to improve our existing closed-water loop cooling systems.

Our business and operations result in waste and we are committed to controlling, recovering and reusing waste wherever possible. We promote the efficient use of resources and materials that are used in our facilities to help reduce waste. We have a sustainable procurement policy and we actively seek to source sustainable products from suppliers that are made from recycled material where possible.

During 2024, we continued our work towards zero waste to landfill aspiration. In 2024, our waste recycled proportion fell to 69% (2023: 76%) despite the waste being diverted from landfill, it was not being recycled. Third-party collectors of our waste are responsible for where the waste goes and we will continue engaging with them to ensure the disposal method is used.

We have a target to increase waste recycled by 2% per annum by the end of 2025 vs our 2020 baseline (resulting in 88% by 2025), and 1% per annum thereafter (resulting in 93% by 2030). We have also committed to a maximum of 5% of waste to landfill by the end of 2025 and 1% by 2030.

To support delivery of these targets, we have a new waste management plan, focused on improving the processing of by-products from our recycling process (metal, rubber, wood). At third-party sites, which act as collection and delivery hubs for old windows which have been replaced, we are implementing processes that allow for cleaner waste streams. We will also continue to develop partnerships with waste services providers, to optimise end-to-end material recovery.

Packaging accounts for c.5% of the waste we generate. We aim to reduce this by using thinner materials and packaging with more recycled content, both for our own products and in the delivery of raw material to our sites.

We do not use significant amounts of hazardous materials. In our extrusion business, we do not use phthalates, cadmium or lead-based stabilisers. In our recycling operation we monitor the cadmium and lead contamination levels within feedstock, to ensure compliance with governing legislation.

Very small quantities of other hazardous materials are currently used as additives within our product mix, but these are rendered non-bioavailable when encapsulated by the polymer structure. In addition, we have a specific requirement within our new product introduction process to reduce any use of hazardous materials. For example, we are investigating replacing the solvent-based glue used in our foiling process with a water-based alternative.