Environment

This extract from the Halma plc 2016 Annual Report & Accounts has not been updated since publication in June 2016.

 

We have an excellent long-term record and a clear strategy for addressing environmental issues that affect our businesses and for developing products that protect the environment and improve safety at work and in public places.

Our products

Many of our innovative products play a very positive role in monitoring and improving the environment. Halma brands lead the world in a number of technologies which help to minimise environmental damage. Our principal environmental technologies are water leakage detection and wireless monitoring, gas emissions monitoring, water and effluent analysis, UV water treatment and optical sensing. We promote the use of UV water sterilisation which eliminates the need to use dangerous chemicals, as well as making products that minimise the waste of clean water. Our commitment to the development of equipment for measuring and monitoring environmental changes and controlling the damaging impact of industrial activities is long term. We are the major world supplier in several of these areas.

Carbon footprint

The Group's policy on carbon is published on our website and has been distributed and explained to all Halma business units. A senior executive in each of our higher impact business units is responsible for implementing the carbon policy at local level. Our Finance Director, Kevin Thompson, has principal responsibility for coordinating and monitoring the policy.

Environmental Management System

We are committed to developing and implementing an EMS throughout the Group to measure, control and reduce our environmental impacts. We have developed performance indicators that assist local management in implementing the policy and ultimately developing an EMS. All Group companies are encouraged to undertake ISO 14001 accreditation, where warranted. The requirement to implement an EMS will be extended to the rest of the Group in the medium term.

Group companies are also encouraged to improve energy efficiency, to reduce waste and emissions and reduce the use of materials in order to minimise their environmental impact.

The Group has identified its key environmental impacts as emissions to air and water, water and energy consumption, and waste production. We established baseline data for these impacts in 2004/05 and set targets for reductions against the baseline on a rolling three year cycle. We support innovation and investment that drives environmental performance. For example, Fortress Interlocks have implemented an initiative to shred its cardboard waste packaging and use it as a bulk fill for shipments to customers in place of purchased expanding foam. Not only has this had a significant environmental impact, it has also delivered a commercial benefit. Similarly, sites such as Fortress Interlocks and our Group head office, have replaced halogen lighting with more efficient LED lighting.

Our impact

This extract from the Halma plc 2016 Annual Report & Accounts has not been updated since publication in June 2016.

The environmental effect of our operations is relatively low compared to manufacturers in other sectors. Our manufacturing model is decentralised, permitting our operations to be located close to their customers. Manufacturing operations are established across the world for this very reason rather than to save labour costs. The ethos of being close to our customers reflects the importance we place on the quality of our products and the service levels we provide to our customers. It also makes our operations more flexible and responsive to their markets and customers. With operations spread around the globe, our supplier base is understandably fragmented. Therefore, responsibility for vetting and managing suppliers is devolved to local management while meeting the Group’s ethical standards.

Energy consumption Kwh per £1000 sales

2012 2013 2014 2015 2016
Electricity 52.9 51.2 47.4 45.3 38.9
Gas 13.1 14.3 12.4 11.3 9.1
Oil 1.9 2.5 1.4 1.1 1.0
Total 67.8 68.1 61.2 57.7 49.0

Waste per £1000 sales

2012 2013 2014 2015 2016
Water usage 0.128 0.123 0.118 0.131 0.104
Solid waste 0.024 0.024 0.025 0.023 0.019
Liquid waste 0.024 0.024 0.025 0.029 0.025

The Group does not operate a fleet of distribution vehicles although we do own a number of company cars. To support the Group’s commitment to sustainability, we operate a cap on permissible CO2 emissions for all company vehicles, which is subject to regular review.

Transport statistics per £1000 sales

2012 2013 2014 2015 2016
Business travel, miles 11.2 10.6 10.1 10.0 9.2
Distribution costs, £ 13.1 14.0 14.3 15.2 14.1

From April 2010, we have worked with providers of energy efficiency and carbon reduction solutions to ensure compliance with the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) which is the UK’s mandatory energy saving scheme administered by the Environment Agency. We are in full compliance with the CRC requirements. All major UK sites have received an energy survey and set an action plan for improved energy usage. Halma has complied with the Energy Savings Opportunity Scheme (ESOS) regulations and submitted its compliance report to the Environment Agency in November 2015, ahead of the 5 December 2015 deadline. The observations made following site energy surveys were shared with local management and reviewed centrally at Group level.

We comply with the mandatory carbon reporting requirements which UK listed companies are subject to and have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013.

We have employed the Operation Control definition to outline our carbon footprint boundary; included within that boundary are Scope 1 and 2 emissions from manufacturing sites and offices which we own and operate. Excluded from our footprint boundary are emissions from manufacturing sites and offices which we do not own and control, and emissions considered non-material by the business. We have reported on emissions from Scope 1 and 2 emissions sources with some Scope 3 emissions sources included (business air travel for all years, and Well to Tank emissions for 2013/14, 2014/15 and 2015/16).

We have also used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and guidance provided by UK’s Department for Environment, Food & Rural Affairs (Defra) on voluntary and mandatory carbon reporting. Emission factors were used from UK Government’s GHG Conversion Factors for Company Reporting 2014 and 2015.

The Group’s environmental performance will continue to be reported both in our Annual Report and Accounts and on our website.

Greenhouse Gas Emissions (GHG) Reporting
We continue to work with our consultants to better monitor our environmental performance and future external reporting requirements.

GHG Emissions data for the period 29 March 2015 to 2 April 2016

2015/16
CO2 emissions
global tonnes
2014/2015
CO2 emissions
global tonnes
Scope 1: Combustion of fuel and operation of facilities 3,955 4,348
Scope 2: Electricity, heat, steam and cooling purchased for own use 15,083 16,247
Scope 3: Business air travel, WTT (Well to Tank) 13,883 14,022
Total gross emissions 32,921 34,617
Intensity measure of tonnes of CO2e gross emissions per £m revenue 40.8 47.7

CO2e emissions reduction

Performance

26%

reduction over 3 years to 2016

Target

10%

reduction over 3 years to 2016

We are committed to reducing our carbon footprint. The Group set a target of reducing its total carbon emissions relative to revenues by 10% over the three years from March 2010, which was met in March 2013. The same target was set for the three year period to March 2016 and has been significantly exceeded. The Board are pleased with the carbon emissions reduction across all three categories of emissions and on a tonne per £m of revenue basis. For the three year period to March 2019, the Board has agreed a targeted reduction of total carbon emissions relative to revenues by a further 10%, further demonstrating our commitment in this area.

CO2e emissions (tonnes/£m of revenue)

CO2e reduction 2016 graph

A senior executive in each of our higher impact business units is responsible for implementing the carbon policy at local level. Our Finance Director, Kevin Thompson, has principal responsibility for coordinating and monitoring the policy.

* Due to changes in Defra reporting guidance, the 2013/14 figures onward have been calculated to include Well to Tank (WTT) emissions and Radiative Forcing on air travel. It is not required to restate years prior to 2013/14 due to the methodological changes.

**The figures for 2013/14 onwards have also been calculated on the same basis as prior years (excluding Well to Tank (WTT) emissions and Radiative Forcing on air travel) to allow for a direct comparison over the longer time scale.

Carbon policy

Board statement of commitment

The use of energy is essential in the production of Group products; products which are valuable in preserving life, health and the environment. We recognise that our activities have both favourable and unfavourable environmental effects, especially on the global atmosphere. Therefore, this policy is designed to reduce our carbon impact by continually improving our business efficiency in terms of the products we offer, our production methods and the wider office environment. It is also consistent with our core vision and values:

Vision

Our vision is to protect life and improve the quality of life for people worldwide.

Core values

  • Achievement
  • Innovation
  • Empowerment
  • Customer satisfaction

The Board fully recognises that sound carbon management is vital to the continued success of our business and that of our customers and stakeholders. As such it must be fully integrated into our business so that it is an every day part of what we all do. This approach will deliver many benefits and the Board commits to ensuring that it is implemented, maintained and reported against.

Kevin Thompson is the Board member responsible for environmental issues.

Objectives

Our policy objectives are to:

  • Reduce our total carbon emissions by 10% relative to revenues over three years to March 2016; these will be measured in tonnes of CO2 emissions per £million of revenue*
  • Promote energy efficiency and awareness throughout the Group
  • Identify and implement opportunities for re-use and recycling
  • Continue to develop products that have lower carbon impacts
  • Continue to offer products that give our customers the opportunity to reduce or eliminate their own environmental impact

The latter three will be included in our carbon measurement statistics in the medium-term.

Achieving our objectives

To ensure that we meet our stated objectives we have developed a Carbon Strategy for the business. At the operating company level Action Plans will be developed and maintained. These provide a detailed schedule of actions and improvements that are designed to achieve the policy objectives.

Policy review

The Group's policy on carbon has been distributed and explained to all Halma business units. This policy will be reviewed at least every 12 months and revised as directed by the Board.

A senior executive in each of our higher-impact business units is responsible for implementing the carbon policy at local level. The Finance Director, Kevin Thompson, has principal responsibility for coordinating and monitoring the policy.

* Note: Due to the changes introduced in Defra’s 2013 conversion factors and the categories of reporting, there is a reduction in our emissions due to the disaggregation of Scope 1 and 2 emissions. There is no like-for-like comparison. We have stepped up our activities internationally to comply with the new mandatory carbon reporting requirements which UK public listed companies are subject to under the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulation 2008 as amended in August 2013. We have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations for the reporting period 31 March 2013 to 29 March 2014. We have employed the Operation Control definition to outline our carbon footprint boundary, included within that boundary are Scope 1 and 2 emissions from manufacturing sites and offices which we own and operate. Excluded from our footprint boundary are emissions from manufacturing sites and offices which we do not own and control, and emissions considered non-material by the business. We have reported on emissions from Scope 1 and 2 emissions sources with some Scope 3 emissions sources included (emissions for Scope 3 have been calculated from business air travel only). Refrigerant gases were taken into account this year as an improvement to our carbon emissions reporting processes. We have also used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and guidance provided by UK’s Department for Environment, Food & Rural Affairs (Defra) on voluntary and mandatory carbon reporting. Emission factors were used from UK Government’s GHG Conversion Factors for Company Reporting 2013.