Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Employee Wellbeing
• Ethical Sourcing

Environmental Achievements

• Reduced carbon emissions per store by 22.8% (from 32 to 24.7 tonnes per annum)
• Recycled 53 tonnes of cardboard (-46% YoY), 45 tonnes of polythene (-35%), and 3.2 tonnes of nylon strapping (-80%)
• Recycled 84% of damaged tiles (32% increase YoY)
• Reduced store waste bin collections by 9,100
• Grove Park office refurbishment using 90% recycled materials, with annual energy savings of 46,800 kWh

Social Achievements

• Named a Top Five retailer for handling the Covid-19 crisis by Glassdoor and Retail Week
• 24 colleagues trained as Mental Health First Aiders, with 50 more in training
• Raised over £920,000 for Macmillan Cancer Support (target £1 million)
• Raised over £140,000 via the Pennies Digital Charity Box
• Sponsored 86 youth sports teams

Governance Achievements

• Full compliance with the 2018 UK Corporate Governance Code
• Strengthened MAR Compliance and Supplier Penetration procedures
• Robust assessment of the Company’s emerging and principal risks

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic impacting revenue and profit (estimated £16 million gross profit impact)
• Subdued commercial market due to Covid-19
• Uncertainty surrounding Brexit
• General economic and consumer confidence

Mitigation Strategies

• Strong cash management and cost reduction measures (£4 million annualised operating cost savings)
• Monetised £18.1 million of freehold assets through sale and leaseback
• Reduced capital expenditure
• Government support schemes (£10.7 million received)
• Contingency warehousing facilities to mitigate warehouse closure risk

Supply Chain Management

Supplier Audits: All suppliers complete a Social and Ethical Self-assessment; independent third-party auditing by Intertek where potential risks are identified

Responsible Procurement

• Topps Tiles Responsible Sourcing code

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Sequel Vibe tiles (98% recycled materials)

Awards & Recognition

• Excellence in Customer Microdonations Award (Macmillan Cancer Support)

Environmental Metrics

ESG Focus Areas

• Environmental Leadership

Environmental Achievements

• Launched new environmental goal of being carbon balanced by 2030
• Significant progress on LED lighting in stores, waste reduction, recycling tiles, and increased recycled content in tiles and other products.

Social Achievements

• 81% of colleagues responded to MyVoice staff survey (up 11 ppts from last year), with 80% positively engaged (up 6 ppts from last year).
• Ranked 12th in the annual Retail Week and Glassdoor survey of best retailers to work for in the UK.
• Emphasis on mental and physical wellbeing, including training for mental health first aiders, ‘Tea and Talk’ sessions, and a company-wide ‘March forward’ scheme.

Governance Achievements

• Established a new governance structure to support the carbon balanced goal, led by the CEO and involving a Sustainability Council and Audit Committee.

Climate Goals & Targets

Environmental Challenges

• Reduced consumer confidence
• Global supply chain challenges
• Cost inflation
• Shortages of labor, especially HGV drivers
• Trading restrictions due to Covid-19 lockdowns (impacting sales by over £20 million in Q2).

Mitigation Strategies

• Maintaining a higher level of inventory than historical averages
• Shifting supply chain focus to single picks for direct customer deliveries during lockdowns
• Focusing Commercial business on less impacted sectors during lockdowns
• Increased efforts to recruit drivers directly
• Emphasizing the strength of the overall employment offer to retain and attract employees
• Store consolidation to enhance profitability

Supply Chain Management

Responsible Procurement

• Work with carefully selected manufacturing partners
• Strategic supplier base accounts for c. 70% of purchases
• Reduced exposure to the Far East

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Everscape™ 2cm porcelain outdoor range
• Luxury vinyl tiles
• New products with high recycled content and antibacterial properties
• DEXTM tools range
• Criaterra zero-waste tile

Awards & Recognition

• The Tile Association’s 2021 award for Excellence in National Retail
• ‘The Mastermind’ award at the Adobe Experience Maker Awards
• B2C Ecommerce Website of the Year at the UK Digital Growth Awards
• Global DIY, Home, Furniture and Interior Design eCommerce Website of the Year at the Global eCommerce Awards 2021
• Best Use of Search B2C award at the European Search Awards
• Best Wholesale & Trade eCommerce and Best B2B eCommerce site at the Ecommerce Awards 2021

Environmental Metrics

ESG Focus Areas

• Carbon neutrality

Environmental Achievements

• 40% reduction in Scope I and II emissions YoY due to switching to renewable energy; Commercial business carbon balanced –400 tonnes of carbon offset for FY22

Social Achievements

• Overall customer satisfaction rate of 90%; Colleague engagement strong at 80% (UK average 68%); Turnover at 16.8% (4.4% down YoY) for store managers in Topps Tiles; 65% of promotions into management positions filled internally

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• FY22 global supply chain disruption due to energy costs, clay and transport; challenging employment market

Mitigation Strategies

• Focus on recruitment & retention; the ‘Topps deal’; resilience and stock availability key strengths

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Carbon Neutrality
• Circularity
• Diversity and Inclusion
• Mental Health

Environmental Achievements

• Installed solar panels on head office and main distribution centre, reducing electricity usage by approximately 70% and saving approximately 340,000 kWh of electricity per annum.
• Parkside (Commercial business) is already carbon neutral.

Social Achievements

• Vacancy rates fell across the first half and overall staff turnover is now 34.0% (H1 2022: 37.8%).
• Staff turnover across Topps Tiles store managers has fallen substantially.
• 64 mental health first aiders were trained or reaccredited, including colleagues from Pro Tiler Tools, and line manager training on mental health has been rolled out.
• Raised over £150k in support of Alzheimer’s Society.
• Topps Tiles customer overall satisfaction score increased by 1.7 percentage points to 91.3%.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Adverse exchange rate movements and the impact of inflation on operating expenses.
• High levels of inflationary costs (approximately 5% operating cost inflation, across utilities costs, employment costs, property costs and other expenses).
• Measuring scope 3 emissions due to the complexity of the global supply chain.
• Delays in projects from key clients in the commercial market (Parkside).

Mitigation Strategies

• Offsetting some inflationary costs through a smaller store estate and efficiency programmes.
• Selecting a partner to help measure scope 3 emissions.
• Launching a business improvement plan for Parkside.
• Reducing gas usage in the business in the second half.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Environmental Leadership

Environmental Achievements

• Goal of being carbon neutral across Scope 1 and 2 emissions by 2030
• Trial of HVO fuel as a diesel replacement
• Examination of additional store efficiency measures focused on reducing emissions from heating
• On track to achieve a second successive year of more than 10% reduction in tile waste
• PrincipleTM awarded Wall Tile of the Year at the Tile Association Awards (uses 90%+ recycled content)

Social Achievements

• Substantial reduction in employee turnover (26.3% in H1 2024 vs 34.0% in H1 2023)
• 58% of promotions into management positions made internally during the first half
• Diversity, equity and inclusion programme ‘One Topps’ launched, with focus on female and ethnicity listening groups
• Further improvements in Topps Tiles customer satisfaction, up 1.2 ppts to 92.5%

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• H1 trading challenging, sales down 5.8% year-on-year
• Market c. 20% down on pre-covid levels
• Weak RMI market
• Lower footfall in Topps Tiles stores
• Political tensions in the Red Sea (potential increased cost of goods or lower product availability)

Mitigation Strategies

• Updated growth strategy, revenue goal and financial targets launched (Mission 365)
• New goal to grow Group sales to £365 million in the medium term, with 8-10% adjusted profit before tax margins
• Development of a significantly upgraded digital offer for Topps Tiles trade customers
• New, coordinated growth strategy for B2B markets
• Continued momentum in high-growth online pure-play businesses
• Cost savings through lower variable pay and other measures
• Strengthening liquidity over recent years

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Maintaining close relationships with strategic supplier base (67% of purchases from this group in H1 2024)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• PrincipleTM tile range

Awards & Recognition

• PrincipleTM awarded Wall Tile of the Year at the Tile Association Awards