Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption by 60% at Rubis Terminal through LED lighting retrofit.
• Achieved annual maintenance savings of $50,000 and 500,000 kWh in electricity savings at OQ Chemicals Bishop, TX facility through LED lighting retrofit.
• Developed a fully recyclable fixture (in progress).

Social Achievements

• Established the Dialight Foundation in 2020, supporting communities through various initiatives.
• Zero year-to-date lost time work accidents in 2021.
• Donated $25,000 to the Women’s Earth Alliance for their COVID and Climate Relief Program in Tijuana, Mexico.

Governance Achievements

• Updated internal procedures for handling whistleblowing reports.
• Maintains a zero-tolerance policy on bribery and corruption.
• Adheres to strict corporate governance practices as a publicly traded company on the London Stock Exchange.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19.
• Reducing carbon footprint across the entire value chain (Scope 1, 2, and 3 emissions).

Mitigation Strategies

• Implementing a range of measures to support and ensure employee safety during the COVID-19 pandemic.
• Formalised commitment to being Net Zero by 2040 with the Science Based Targets initiative (SBTi).
• Established 5 core focus areas to anchor the net-zero plan: Design for Circularity, Responsibly Manage Use of Natural Resources, Localise Supply Chain, Move to Greener Logistics, and Rethink Energy Usage.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct requiring adherence to ethical standards and expectations, including human rights.

Climate-Related Risks & Opportunities

Physical Risks

• Weather and natural disaster events

Transition Risks

• Technology availability, consumer demand changes

Reporting Standards

Frameworks Used: ISO 14064, SASB, TCFD

Certifications: EN 15804 (for Vigilant Bulkhead)

Third-party Assurance: BSI Group

Sustainable Products & Innovation

• Redesigned Vigilant® High Output High Bay, All New ProSite Floodlight, Ultra-Efficient Vigilant® High Bay

Awards & Recognition

• Fariyal Khanbabi honored at the Manufacturing Institute’s STEP Ahead Awards Gala

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Inclusive communities & workforces
• Accountability and compliance

Environmental Achievements

• Helped customers reduce emissions by c. 20m tonnes
• Maintained Silver sustainability rating with EcoVadis, increasing percentile ranking to 79th
• Improved CDP ratings (Climate Change B and Water Security B-)
• Expanded EPD portfolio to cover 7 product families
• 100% Green Revenue as judged by FTSE Russell

Social Achievements

• Zero reportable incidents across all sites in 2021
• 10% reduction in near misses in 2021
• 50% of total workforce is female
• Dialight Foundation provided materials and support to children's orphanages and schools
• Partnership with Women's Earth Alliance

Governance Achievements

• Introduced sustainability targets as part of Executive variable remuneration in 2023
• First-time reporting under TCFD requirements
• Workforce Engagement Non-Executive Director visited Group sites to meet staff

Climate Goals & Targets

Environmental Challenges

• Climate-related disruption causing supply chain shortages
• Sufficient capacity to cope with significant surge in demand
• Changing weather patterns impacting logistics
• Extreme weather events causing one-off issues at operational sites
• Drought causing water shortages in high water stress areas (Mexican operations)

Mitigation Strategies

• Minimising the use of sole suppliers
• Introducing more commonality of parts in new products
• Working on site-wide efficiency improvements
• Exploring the use of internally generated renewable power
• Reducing water consumption by 5% per annum as a % of revenue (exceeded in 2021)

Supply Chain Management

Supplier Audits: Survey of top 30 suppliers (c. 70% of supply chain value)

Responsible Procurement

• Compliance with Dialight Code of Business Conduct
• Conflict minerals legislation
• REACH, RoHS, California Prop 65
• Anti-slavery and human trafficking legislation

Climate-Related Risks & Opportunities

Physical Risks

• Changing weather patterns impacting logistics
• Extreme weather events
• Drought

Transition Risks

• Product redesigns
• Supply chain disruptions
• Surge in demand

Opportunities

• Increased market adoption of LED
• Legislative changes banning older lighting technology
• Greater resource efficiency driving down product costs

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001

Third-party Assurance: Third-party verification for Scope 1, 2, and 3 emissions (excluding customer usage)

UN Sustainable Development Goals

• SDG 6 (Clean water and sanitation)
• SDG 7 (Affordable and clean energy)
• SDG 9 (Industry, innovation, and infrastructure)
• SDG 13 (Climate action)

Not disclosed

Sustainable Products & Innovation

• Most efficient heavy industrial high bay on the market

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Responsibility
• Social Responsibility
• Governance

Environmental Achievements

• Reduced Scope 1 & 2 emissions per US$m of revenue by 13%
• Reduced water intensity per US$m of revenue by 7%

Social Achievements

• Launched Dialight Foundation to support local communities
• Implemented safety initiatives resulting in a strong focus on safety

Governance Achievements

• Restructured the Board and senior leadership team
• Implemented a transformation plan to streamline the Group, reset cost and productivity, and accelerate growth in lighting

Climate Goals & Targets

Environmental Challenges

• Global supply chain issues
• Slowdown in revenue growth
• Underlying operating loss
• Breaches of banking covenants
• Legal claim with Sanmina

Mitigation Strategies

• Transformation plan focusing on streamlining, cost reduction, and growth acceleration
• Equity raise of US$12.0m
• Improved inventory management
• Extension of bank facility
• Retrospective covenant waivers from HSBC
• Divestment of non-core businesses

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Modern Slavery Policy
• Anti-bribery and anti-corruption policy

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters impacting manufacturing and supply chain

Transition Risks

• Regulatory pressure to reduce emissions and ban older lighting technologies

Opportunities

• Growth from replacing older lighting technologies with LED

Reporting Standards

Frameworks Used: ISO 14064, SASB

Certifications: FTSE Green Economy Mark

Third-party Assurance: Limited assurance

Sustainable Products & Innovation

• LED lighting products