Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Supply Chain Sustainability
• Employee Well-being
• Ethical Business Practices
• Human Rights

Environmental Achievements

• Achieved operational carbon neutrality in 2021 by offsetting Scope 1 and 2 emissions.
• Sourced renewable energy certificates covering 94% of total energy consumption.
• Quantified Scope 3 emissions for the first time (360,291 tCO2e).
• Estimated to have avoided 477,077 tCO2e from LED lighting products sold.

Social Achievements

• Introduced a stand-alone Flexible Working Policy and a Homeworking Policy.
• Employee satisfaction increased to 90.5% in 2021 (from 86.1% in 2020).
• Launched a learning and development platform with 5,280 modules completed.
• Established a "Luceco class" at a local university in Jiaxing, China.

Governance Achievements

• Updated “Matters Reserved for the Board” to include clear oversight of ESG matters.
• Linked executive compensation to the achievement of ESG objectives.
• Established a working group to support the CFO in developing the ESG strategy.
• Responded to the Carbon Disclosure Project (CDP) for the first time.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to extreme weather events and global constraints.
• Keeping pace with customer expectations on climate action.
• Increased stakeholder concern regarding ESG issues, particularly climate change.

Mitigation Strategies

• Holding buffer stock in UK warehouses.
• Close liaison with customers to understand their climate ambitions.
• Developing a climate change strategy with independent consultants.
• Proactive approach to emissions reductions (operational efficiency, renewable energy certificates, offsetting).

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct (covering legal requirements, ethical practices, human rights, environmental management).

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather events

Transition Risks

• Changing customer behaviour
• Increased stakeholder concern

Opportunities

• Shift in consumer preferences and access to new markets
• Use of more efficient production and distribution processes

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• LED lighting
• EV chargers
• Smart standby products
• Next generation high power EV charging products
• Next generation USB sockets with lower standby power

Environmental Metrics

ESG Focus Areas

• Creating a sustainable future
• Empowering people
• Working with integrity and transparency

Environmental Achievements

• Sourced 100% renewable electricity across all operations in 2022, bringing Scope 2 emissions to zero.
• Offset residual Scope 1 emissions for 2022.
• Total GHG emissions have fallen by 15% compared to 2021.
• Energy usage has decreased 22% relative to last year.
• All plastic packaging is recyclable with a minimum 30% recycled content.

Social Achievements

• Group-wide employee engagement survey conducted.
• Salary increases for 2023 greater than the wider market, with largest percentage increases given to lowest paid.
• 3,975 training modules completed by employees during the year.
• Improved maternity benefits and flexible working.

Governance Achievements

• Commitment to the Science Based Targets initiative (SBTi).
• Climate-related financial disclosures consistent with TCFD recommendations.
• Zero-tolerance policies in relation to behavior not aligning with values.
• No concerns reported regarding Anti-bribery and Corruption Policy.

Climate Goals & Targets

Environmental Challenges

• Changing customer behaviour (customers increasingly demanding climate action).
• Increased stakeholder concern or negative stakeholder feedback regarding ESG issues.
• Increased severity and frequency of extreme weather events.
• Increased cost of raw materials (e.g., copper).
• Impact of inflation on the cost of living.

Mitigation Strategies

• Close liaison with customers to understand their climate ambitions.
• Development of climate change strategy with independent consultants and setting a science-based emissions reduction target.
• Responding to the Carbon Disclosure Project (CDP) to increase transparency.
• Proactive approach to emissions reductions (investment in operational efficiency, renewable electricity, and offsetting).
• Buffer stock held in UK warehouses for supply chain disruption.
• Visibility of forward orders provided to suppliers.
• Production facility in China spread across multiple buildings.
• Ownership of product designs and production tooling.
• Business continuity plans and business interruption insurance.
• Salary increases to address inflation concerns.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct (covering legal requirements, ethical practices, human rights, and environmental management).

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Heat stress
• Precipitation
• Wildfire
• Extreme wind

Transition Risks

• Changing customer demands
• Increased stakeholder concern
• Increased pricing of GHG emissions
• Increased cost of raw materials

Opportunities

• Access to new markets (EV charging, battery storage, inverters, solar PV)
• Expansion of existing products and services (LED lighting, smart home tech, wiring accessories)

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• LED lighting
• EV chargers
• Smart standby products

Environmental Metrics

ESG Focus Areas

• Climate change
• Employee empowerment
• Ethical and transparent operations

Environmental Achievements

• Operations carbon neutral since 2021
• £80m revenue from low carbon products in 2023 (target of £100m by 2025)
• Received validation from the Science Based Targets initiative (SBTi) for emission reduction targets

Social Achievements

• Nearly 50 contractor CPD training events in 2023
• Sponsored eFIXX 30 under 30 awards for young electricians
• Employee satisfaction increased in 2023 compared to 2022 (88.7% fairly or very satisfied)

Governance Achievements

• Compliance with the 2018 UK Corporate Governance Code (with exceptions for Provisions 9 and 19)
• Board-level oversight of ESG matters
• Implementation of a climate change management strategy

Climate Goals & Targets

Environmental Challenges

• Adverse market conditions and macroeconomic uncertainty
• Post-pandemic destocking by customers
• Rising cost of living reducing discretionary consumer spending
• Currency exchange rate headwinds
• Increased wage costs

Mitigation Strategies

• Careful working capital inventory management
• Strategic capital allocation
• Resetting selling prices to offset input cost inflation
• Hedging arrangements to protect against foreign exchange movements
• Strong relationships with key customers
• Investment in key growth areas

Supply Chain Management

Supplier Audits: Supplier performance audits, site visits

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Wind risk
• Heat stress
• Precipitation risk
• Drought
• Wildfire

Transition Risks

• Changing customer behavior
• Increased stakeholder concern
• Increased pricing of GHG emissions
• Increased cost of raw materials

Opportunities

• Access to new markets (EV charging)
• Expansion of existing products and services

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

Third-party Assurance: KPMG LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Second generation EV chargers
• High-specification LED luminaire
• High-performance floodlight
• Solar-powered lighting solutions

Awards & Recognition

• DW Windsor won “Sustainability Project of the Year” award from the HEA