Climate Change Data

Castelnau Group Limited

Climate Impact & Sustainability Data (2020, 2021)

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:15,763 tCO2e/year (2020)
Scope 1 Emissions:15,710 tCO2e/year (2020)
Scope 2 Emissions:53 tCO2e/year (2020)
Renewable Energy Share:100% (electricity)
Total Energy Consumption:94,175 MWh/year (2020)
Carbon Intensity:5.3 tCO2e per FTE employee (2020)

ESG Focus Areas

  • Social
  • Environmental
  • Governance

Environmental Achievements

  • 1% reduction in carbon emissions during the period.
  • 99.98% of waste diverted from landfill (reaching 100% in 2021)
  • 100% of electricity supplied from renewable sources in England, Wales, and Scotland
  • 98% of coffins produced using Forest Stewardship Council certified timber

Social Achievements

  • Launched Stay Well campaign promoting wellbeing and positive mental health.
  • Implemented significant changes to working practices and provided enhanced PPE to ensure safety.
  • Developed Timeless Funeral offering to adapt to COVID-19 restrictions.
  • 24% reduction in reportable accidents since 2009.
  • Established Dignity Employee Forum for two-way communication between employees, management, and the Board.
  • New three-year partnership with Teenage Cancer Trust.

Governance Achievements

  • Addressed additional requirements arising from Section 172 of the Companies Act 2006 and the 2018 UK Corporate Governance Code.
  • Engaged openly and collaboratively with the CMA throughout its market investigation.
  • Working with the FCA to prepare for regulation of the funeral plan market.

Climate Goals & Targets

Medium-term Goals:
  • Grow Funeral Market Share significantly to 20% by 2025 (Project 20:20).
Short-term Goals:
  • Complete root and branch review (Q2 2021).

Environmental Challenges

  • COVID-19 pandemic impacting operations, staff, and resourcing.
  • CMA market investigation.
  • Ongoing regulatory considerations.
  • Shortcomings exposed by the root and branch review.
  • Increased price competition in the funeral market.
  • Changes in consumer preferences.
  • Increased demand for direct cremations.
  • Potential for nationwide adverse publicity.
  • Significant movements in the death rate.
  • Demographic shifts in population.
  • Cyber risk.
  • Financial covenant under the Secured Notes.
Mitigation Strategies
  • Cost control and price structure adjustments.
  • Open and constructive dialogue with CMA and FCA.
  • Root and branch review to improve efficiency and competitiveness.
  • Investment in digital capabilities and enhanced reporting.
  • Development of Simplicity Cremations brand.
  • Strong reputational management.
  • Adaptation to evolving client needs.
  • Investment in technology and security controls.
  • Internal restructure of trading assets to increase covenant headroom.
  • Business continuity and pandemic plans.
  • Use of agency staff and staff redeployment.
  • Provision of PPE and operational guidance.
  • Contingency plans for operations and central offices.
  • Employee Assistance Programme.

Supply Chain Management

Supplier Audits: Three-yearly cycle for factories supplying Dignity Manufacturing.

Responsible Procurement
  • Purchasing via reputable agents.
  • Ethical audits of factories.
  • E-Learning Module addressing the Modern Slavery Act.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Section 172 of the Companies Act 2006, 2018 UK Corporate Governance Code

Awards & Recognition

  • Feefo Platinum Trusted Service Award (Simplicity and Dignity)

Reporting Period: 2021

Environmental Metrics

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Governance Achievements

  • Implemented a framework for corporate governance appropriate for an investment company, complying with the principles of the UK Corporate Governance Code and the GFSC Code.
  • Established a Management Engagement Committee to review the terms of appointment of the Investment Manager and other service providers.

Climate Goals & Targets

Long-term Goals:
  • Compound shareholder's capital at high rates of return.

Environmental Challenges

  • Underperformance relative to the FTSE All-Share Index, mainly due to Dignity and Hornby's performance.
  • Supply chain problems experienced by Cambium Group's suppliers.
  • Volatility in Dignity's share price due to strategic changes.
  • Russia's invasion of Ukraine and its impact on the global economy.
Mitigation Strategies
  • Implementing a strategy to invert Dignity, empower customer focus, and create a confederation of local businesses.
  • Embedding a learning culture within Dignity.
  • Applying Castelnau's toolkit and techniques to portfolio companies.
  • Monitoring the ongoing impacts of the COVID-19 pandemic and assessing measures in place by key service providers to ensure business continuity.
  • The Investment Manager is in constant communication with the Directors of each investment and has mitigants in place for each investment.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: AIC Code, UK Corporate Governance Code, GFSC Code

Third-party Assurance: Grant Thornton Limited