Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Health and Safety
• Sustainability and the Environment

Environmental Achievements

• Reduced Scope 1 and 2 emissions per £m of revenue by 11%
• Improved climate-related risk assessment analysis in CDP reporting

Social Achievements

• Launched a new Code of Conduct with 99% completion rate of online training (excluding UK)
• Completed a two-year cycle of Employee Experience consultations
• Various local community initiatives across the Group (e.g., charity support, environmental cleanups)

Governance Achievements

• Implemented a new Code of Conduct with online training in 18 languages
• Completed a global anti-bribery audit covering eight markets
• Updated remuneration policy with increased focus on long-term incentives and alignment with shareholder interests

Climate Goals & Targets

Environmental Challenges

• Weaker markets and unexpected challenges, including political unrest in Hong Kong and Chile
• Adverse transactional currency impact (AUD/JPY)
• Market contraction in Singapore
• Continued political uncertainty in Hong Kong
• Weakness in the Australian market
• Competitor-driven margin pressure in Russia

Mitigation Strategies

• Firm actions to improve efficiency and performance
• Reshaping the Inchcape portfolio towards attractive Distribution businesses
• Disposal of selective Retail operations outside of core Distribution activities
• Focus on cost control
• Raising prices to offset currency headwinds
• Continued focus on Ignite initiatives

Supply Chain Management

Responsible Procurement

• Global procurement system tracking 50% of global spend (85% targeted by end of 2020)

Climate-Related Risks & Opportunities

Physical Risks

• More frequent weather events and natural catastrophes

Transition Risks

• Regulatory changes forcing OEMs to invest in lower emission vehicles
• Increased digitisation of the customer relationship

Opportunities

• Development of energy-efficient products
• Growth in new mobility solutions

Sustainable Products & Innovation

• Full electric and hybrid vehicle range marketed in the UK

Environmental Metrics

ESG Focus Areas

• Climate Change
• Workforce Engagement
• Corporate Governance
• Health & Safety
• Responsible Business
• Diversity & Inclusion

Environmental Achievements

• Approved science-based targets for scope 1 and 2 emissions; approved plan for reviewing scope 3 targets in 2022.
• Developed the 'Driving What Matters' plan with the Carbon Trust to establish climate-related risks and opportunities.

Social Achievements

• Held the first employee forum on culture, demonstrating high levels of openness and engagement.
• Implemented HSE risk management programs across all regions with solid improvement across all key performance indicators.
• Plan to hold more employee forums in 2022 to gather employee views on important topics.

Governance Achievements

• Reviewed the framework and activation plan for embedding responsible business into the Group.
• Reviewed the materiality matrix and stakeholder engagement process.
• Updated its terms of reference to ensure appropriate oversight of the Driving What Matters plan.
• Discussed its remit beyond the current terms of reference, the interplay with the Board and its other Committees, and how it can enhance the Board’s deliberations on ESG matters.

Climate Goals & Targets

Environmental Challenges

• Understanding the overall emissions landscape both downstream and upstream (Scope 3 emissions).
• Time zone differences impacting virtual workforce engagement across regions.

Mitigation Strategies

• Monitoring the scope 3 project to understand the overall emissions landscape.
• Utilizing virtual townhalls to reach a wider range of employees, while acknowledging time zone challenges.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Planet
• People
• Places
• Practices

Environmental Achievements

• Reduced Scope 1 and Scope 2 GHG emissions by 24%
• 50.3% of sites switched to renewable energy supply

Social Achievements

• Launched Inclusive Leadership Programme for senior leaders
• Launched and embedded Global Women into Leadership Programme
• Launched Lifeworks EAP Programme

Governance Achievements

• Refreshed employee Code of Conduct and retrained all employees
• Introduced a Supplier Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Misalignment between OEM and markets on BEVs
• Reduction in aftersales revenue for BEVs
• Carbon tax costs
• Transition to BEVs leads to pressure on distributor margins
• Physical risks – direct impact to property and inventories from extreme weather events

Mitigation Strategies

• Forming new partnerships with pure EV entrants
• Expanding aftersales services to include new BEV-specific services
• Implementing decarbonisation levers across Scope 1 and 2
• Providing a compelling offering to OEM partners (Distribution Excellence), capturing additional vehicle profit pools (Vehicle Lifecycle Services) and enabling expansion into new, margin-accretive markets through M&A
• Including physical risk assessments in consideration of organic and inorganic growth opportunities

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Misalignment between OEM and markets on BEVs
• Carbon tax costs
• Transition to BEVs leads to pressure on distributor margins

Opportunities

• Alignment between OEM and markets on EVs leads to market share increase
• Increase in aftersales revenue for BEVs

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001

Sustainable Products & Innovation

• Electric Vehicles

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Health & Safety
• Community Engagement

Environmental Achievements

• Reduced scope 1 and 2 greenhouse gas emissions by 31% against 2019 revised baseline.
• 32% of sites covered by renewable tariffs.

Social Achievements

• Increased women in senior leadership positions to 28% (from 22% in 2022).
• 88% of colleagues completed the 'Be Heard' colleague experience survey.
• 6,500+ colleagues enrolled in supporting Places initiatives locally; 40,000+ members of our communities positively impacted.

Governance Achievements

• Launched updated Code of Conduct, with 95% colleague completion rate.
• Launched Global Policy Statement Handbook summarizing global policies.

Climate Goals & Targets

Environmental Challenges

• Geopolitical uncertainties and economic challenges.
• EV transition risks (misalignment between partner supply and market demand).
• Margin pressure due to increased competition and macroeconomic factors.
• Supply chain disruptions.
• Physical risks from extreme weather events.

Mitigation Strategies

• Diversified geographic footprint and mobility partner portfolio.
• Developing partnerships with EV manufacturers (BYD, Geely, Great Wall Motors).
• Accelerate strategy (Distribution Excellence, Vehicle Lifecycle Services, M&A).
• Cost management initiatives.
• Business continuity planning and insurance.

Supply Chain Management

Responsible Procurement

• Sustainable procurement practices

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (flooding, wildfires, etc.)

Transition Risks

• EV transition (misalignment with partners), carbon taxes, margin pressure.

Opportunities

• New EV partnerships, new revenue streams, energy efficiency savings.

Reporting Standards

Frameworks Used: GRI, TCFD

Sustainable Products & Innovation

• Digital Parts Platform