Environmental Leadership

We 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 recognise that our operations result in emissions and waste and, as such, we have a designated Safety, Health & Environment (SHE) policy, which covers all sites, outlining key environmental measures as follows:

• Prevent pollution and protect the environment by minimising waste and emissions and finding ways to reuse, reclaim and recycle materials and use sustainably sourced materials where possible
• Investigate environmental incidents to extract key learnings and prevent recurrence
• Ensure senior management regularly reviews performance against agreed targets
• Promote environmental awareness amongst all of our employees and provide the necessary training and information to safeguard our employees and minimise the impact of our activities on the environment
• Commit to control, recover, and reuse PVC waste where possible
• Conduct our operations in compliance with all relevant environmental legislation linked to our business
• Maintain emergency procedures in areas where significant health, safety or environmental hazards may exist
• Assess our environmental objectives, policies and procedures regularly to ensure that we are meeting the required standards and continually improving.

The environmental management systems implemented at our two main extrusion plants, secondary operations (foiling) facility, door manufacturing facility and northern recycling plant are all accredited to ISO 14001:2015, which represents 63% of our operations sites. All accreditations were successfully maintained in 2023. No environmental fines or penalties have been recorded in 2023 or 2022.

Central to our sustainability strategy is reducing the carbon footprint of our business and the impact our operations have on climate change. This includes reducing energy consumption and greenhouse gas emissions across all of our operations and minimising waste.

We have made good progress in recent years. The natural replacement cycle of our extrusion fleet leads to the substitution of old machines with newer lines that are more efficient and use less energy. Other examples of more recent initiatives include projects which have reduced idle, standby and shutdown times and improved temperature optimisation on our extrusion lines and chillers.

In addition, incandescent and fluorescent lighting has been swapped to LEDs at most of our operational sites and new, more efficient, air conditioning units have been installed across most of our estate, driving significant energy savings.

Energy consumption and emissions data

In addition to our Scope 1 and 2 emissions, we have now developed our end-to-end carbon footprint methodology, which includes for the first time a full Scope 3 analysis for 2022 and 2023 as set out in the table.

^{Notes to table:}

• ^{We operate only within the United Kingdom and so values are for UK operations only}
• ^{2022 has been re-stated to reflect the change in the reporting period.}

^{Notes to calculations:}

• ^{Emissions and energy data presented for 2022 and 2023 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 for the first time this year, 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 2023 (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. As a result, we have restated 2022 emissions data to reflect a change in the reporting period from 1 October to 30 September to 1 January to 31 December to align to Eurocell’s financial reporting period.}

Energy consumption and emissions performance

Our Scope 1 emissions reduced by 7% in 2023 to 9.6 ktCO2 e, primarily reflecting lower levels of sales and production, and therefore distribution and transport activity in the business in 2023 compared to 2022. However, despite lower electricity consumption, location-based Scope 2 emissions increased by 5% to 11.0 ktCO2 e, driven by an increase in the year-on-year emissions factor for UK electricity. Together therefore, Scope 1 and 2 emissions of 20.6 ktCO2 e were down 1% compared to 2022.

Market-based Scope 1 and 2 emissions of 10.9 ktCO2 e were down 31% compared to 2022, which reflects an increase in our purchases of renewable electricity from 72% in 2022 to 94% in 2023.

We have calculated our Scope 3 emissions for 2023 to be 177.3 ktCO2 e, compared to 194.9 ktCO2 e in 2022, a decrease of 9%. This mainly reflects lower emissions from purchased goods and services, down 11.4 ktCO2 e, or 7%.

More than 80% of our Scope 3 emissions are from purchased goods and services, including virgin PVC resin. This reduction is also driven by lower levels of production in our primary extrusion operations in 2023 compared to 2022.

Reflecting these factors, total location-based emissions (Scope 1, 2 and 3) of 197.9 ktCO2 e were down 8% compared to 2022, with the corresponding emissions intensity ratio of 543 tCO2 e per £1m sales down 4%. Market-based emissions of 188.2 ktCO2 e were down 11% compared to 2022, with the corresponding emissions intensity ratio of 516 tCO2 e per £1m sales down 7%.

Total energy consumption in 2023 of 91,604 MWh was down 4% compared to 2022, with renewable consumption up 27% and non-renewable down 25%. On a net basis, this primarily reflects lower production volumes in 2023 compared to 2022.

Energy consumption and emissions targets

As set out in the TCFD Report on pages 50 to 61, we have committed to a Net Zero target for 2045 and during 2024 will be developing a pathway, aligned to the SBTi framework for our operational emissions, to support us in achieving that aim. The pathway will provide ambitious near-term targets, including updated objectives for energy use and emissions in line with our overall Net Zero goal. We will submit our targets to the SBTi for verification in 2024 and publish a Transition Plan once our targets have been approved.

Key components of our transition plan will be moving away from fossil fuel usage and sourcing/generating renewable energy. In the near term, our key initiatives designed to reduce emissions include:

• Increase our purchases of renewable electricity (94% in 2023)
• Complete the project to install solar panels at our main extrusion plant, which will produce an estimated 0.8 MWh of renewable energy per annum
• Continue to upgrade our material handling fleet to electric alternatives
• Explore the option of switching company vehicles to electric and continue to instal charging points at our branches and operational facilities
• Investigate non-diesel options for our light commercial fleet and engage with our third-party logistics provider to examine ways to reduce the environmental impact of our distribution operation
• Training operational staff in methods to improve operational efficiency and reduce emissions
• Ongoing replacement of PVC extruder fleet with modern, more efficient plant and equipment.

In addition, we are working with suppliers to better understand and improve Scope 3 emissions. Critical to our Net Zero transition plan will be finding viable alternatives to allow a reduction in the use of virgin PVC resin. This will most likely come from increasing the use of recycled PVC in our primary manufacturing operations, plus finding another viable low carbon alternative e.g. bio-attributable PVC resin.

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

We have a closed loop water recycling system in extrusion, where the water is filtered, purified, and neutralised to maintain its quality. 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.

Our Chief Operating Officer has overall responsibility and oversight of the SHE policy, which encompasses water-related matters. The management team of each operational site has direct responsibility for ensuring our SHE policy is followed.

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. Our Executive Committee has overall responsibility and oversight for waste management. 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 2023, we continued our work towards a zero to landfill aspiration. In 2023 76% of our waste was recycled (2022: 82%), the fall in waste recycled reflects a change in process from our main third-party supplier part way through the year, which we will review in 2024. We have a target to increase waste recycled by 2% per annum by 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 2025 and 1% by 2030.

To support delivery of these targets, we have a new waste management plan for 2024, 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.