Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Environment
• Business

Environmental Achievements

• Converted to LED technology early, resulting in LEDs accounting for essentially 100% of net sales.
• Increased the Group’s total energy consumption from renewable sources to 36% (from 31%).
• Reduced total CO2 emissions (Scope 1 and 2) to 7,452 tons (from 8,478 tons) and 4,961 tons (from 6,221 tons), respectively.

Social Achievements

• Increased number of employees to 4,465 (from 3,384).
• Completed the Bright Leaders international leadership programme for 73 managers.
• Launched a new Group-wide online training module on the Code of Conduct, with a focus on anti-corruption, completed by 97% of identified managers and employees.

Governance Achievements

• Implemented a new Group-wide online training module regarding the Code of Conduct, with particular focus on anti-corruption.
• 97% of identified managers and employees completed the online training.
• Initiated a joint HR-forum where senior HR managers meet two to three times per year to discuss strategic HR issues related to sustainability.

Climate Goals & Targets

Environmental Challenges

• Declining order intake and net sales for the second year running, primarily due to the maturation of the LED technology shift and slower-than-expected switch to LED luminaires in some markets.
• Tough market conditions in the Middle East, adverse currency effects, and tough market conditions in Turkey and South Africa.
• Geo-political situations affecting overall demand in the UK, Turkey, South Africa, China, the USA and Russia.

Mitigation Strategies

• Initiated a performance improvement programme in Q2, reducing fixed costs and resulting in over 180 employees leaving the business.
• Continued investments in product development and manufacturing to meet the next stage of development.
• Strategic alignment process to strengthen collaboration within the Group and identify new business opportunities.

Supply Chain Management

Supplier Audits: 180 new suppliers added in 2019, 57 evaluated based on environmental criteria.

Responsible Procurement

• Code of Conduct for suppliers
• Supplier Quality Assurance (SQA) service launched

Climate-Related Risks & Opportunities

Opportunities

• Realising business opportunities and energy savings brought about by LED technology and lighting control solutions.

Reporting Standards

Frameworks Used: GRI Standards; Core option

Third-party Assurance: PwC

UN Sustainable Development Goals

• Goal 7: Affordable and clean energy
• Goal 11: Sustainable cities and communities
• Goal 12: Responsible consumption and production
• Goal 13: Climate action

The Group has identified four UN SDGs where it has the most impact and greatest opportunity to make a positive contribution.

Awards & Recognition

• Whitecroft won two awards: Interior Luminaire of the Year at Lux and Supply Chain Partner of the Year.
• WE-EF received two awards: Focus Open 2019 Special Mention and The German Design Award Special 2019.
• iGuzzini received an award for outstanding Health & Safety practices.
• LED Linear received five awards: ICONIC AWARDS and Sapphire Awards.

Environmental Metrics

ESG Focus Areas

• People
• Environment
• Business

Environmental Achievements

• 33% of the Group’s total energy use in 2020 came from renewable sources.
• Launched Whitecroft Vitality, a circular economy platform with Cradle to Cradle certified luminaires.
• Reduced plastic packaging use by more than five tonnes at LTS/Germany.

Social Achievements

• iGuzzini won an award in Italy for its management of the Covid-19 situation.
• 65% of all Fagerhult Group’s employees engaged in some kind of development dialogue during 2020.
• Implemented a supplier code of conduct at Fagerhults Belysning, covering 93% of total purchases.

Governance Achievements

• Successfully launched a new business area structure (Collection, Premium, Professional, Infrastructure).
• Implemented a Group-wide online training module on the Code of Conduct, with a focus on anti-corruption.
• Completed the divestment of Lighting Innovations Africa.

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic negatively impacted revenues and earnings.
• Market challenges in South Africa led to the divestment of Lighting Innovations.
• Supply chain disruptions due to the pandemic.

Mitigation Strategies

• Implemented cost-saving measures exceeding 16%.
• Established Crisis Teams at Group and subsidiary levels.
• Increased remote working opportunities.
• Developed alternative sourcing strategies.

Supply Chain Management

Responsible Procurement

• Code of Conduct
• Supplier code of conduct
• Supplier assessments
• Supplier reviews
• Group Purchase Forum (GPF)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and connected lighting solutions.

Reporting Standards

Frameworks Used: GRI Standards; Core option

Certifications: Cradle to Cradle

Third-party Assurance: PwC (limited assurance)

UN Sustainable Development Goals

• Goal 7: Affordable and clean energy
• Goal 11: Sustainable cities and communities
• Goal 12: Responsible consumption and production
• Goal 13: Climate action

Modern lighting solutions are incredibly energy efficient; proper lighting in public places can make them more accessible and safer; circular lighting solutions; a new role, Chief Sustainability Officer, was added to the Group Management team.

Sustainable Products & Innovation

• Whitecroft Vitality products
• Energy-efficient LED diodes with flip-chip technology

Awards & Recognition

• iGuzzini award for Covid-19 management
• Whitecroft Make UK award for Energy and Sustainability

Environmental Metrics

ESG Focus Areas

• Responsible relations
• Responsible operations
• Circular solutions
• Knowledge leader

Environmental Achievements

• Committed to Science Based Targets initiative (SBTi) to reduce greenhouse gas emissions in line with the Paris Agreement's 1.5°C target and achieve net-zero emissions by 2045.
• 72% of total electricity consumption in 2022 came from renewable sources.
• Total direct and indirect emissions (scopes 1 and 2) in 2022 amounted to 14,413 tonnes, down 27 per cent compared with 2021.
• Launched Re:furbish (circular economy concept for upgrading and reusing existing solutions).
• Launched Discovery (product partly made of bio-based plastic with a low carbon footprint).

Social Achievements

• Continued work on Group culture, focusing on leadership development and collaboration.
• 70% of employees underwent a development dialogue with a manager.
• Increased average number of training hours per employee compared to the previous year.
• Three companies certified their occupational health and safety processes with ISO 45001.

Governance Achievements

• Developed a new sustainability agenda, “Positive Change for Better Living”.
• Adopted three new policies: human rights policy, policy on working conditions, and conflict minerals policy.
• Implemented a Group-wide online training module on the Code of Conduct, with a focus on anti-corruption.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions and inflationary pressures.
• Geopolitical turmoil in Europe.
• Russia's invasion of Ukraine.
• Semiconductor shortages impacting the accessibility of drivers.

Mitigation Strategies

• Focus on pricing activities to overcome supply chain cost pressures and good cost control.
• Decision to wind up sales organisation in Russia.
• Close cooperation with suppliers to secure supplies of drivers.
• Improved supply situation of electrical components during the second half of 2022.

Supply Chain Management

Supplier Audits: 344 suppliers evaluated using environmental criteria; 226 suppliers evaluated using social criteria in 2022

Responsible Procurement

• Code of Conduct for suppliers
• Supplier assessments
• Group Purchasing Forum for large-volume purchases

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Extreme heat
• Increased temperatures
• Water intrusion in production units
• Shortages of energy and renewable energy
• Extreme electricity prices

Transition Risks

• Regulatory changes

Opportunities

• Increased demand for green products and solutions
• Access to new markets
• New partnerships
• Focus on product development and innovation in lighting and smart solutions

Reporting Standards

Frameworks Used: GRI Standards 2021

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 11 (Sustainable cities and communities)
• SDG 12 (Responsible consumption and production)

The company's initiatives contribute to these goals through energy-efficient lighting solutions, circular economy practices, and sustainable design.

Sustainable Products & Innovation

• Discovery
• Selene 2
• Light Shed
• Crystal

Awards & Recognition

• Red Dot Design Award (Light Shed)

Environmental Metrics

ESG Focus Areas

• Climate change
• Circularity
• Responsible relations
• Responsible operations
• Knowledge leadership

Environmental Achievements

• Reduced GHG emissions by 24% since 2021
• 75% of total electricity consumption from renewable sources in 2023
• iGuzzini's factory in Recanati, Italy generated 55% of its energy on-site through solar panels, reducing CO2e emissions by 2,200 tonnes per year.

Social Achievements

• Launched Fagerhult Group Leadership Program
• Developed a strategy for diversity and inclusivity
• 72% of employees had development dialogues in 2023 (increase from previous year)
• Average training hours per employee in 2023 was 22 hours

Governance Achievements

• Implemented a joint Code of Conduct for business partners
• Science-based climate targets validated and approved by the Science Based Targets initiative (SBTi)

Climate Goals & Targets

Environmental Challenges

• Educating customers about the opportunities of smart lighting
• Managing diverse sustainability efforts across 12 different companies globally
• Preparing for new statutory requirements under the CSRD reporting standard
• Supply chain disruptions (mentioned in previous years, but impact lessened in 2023)

Mitigation Strategies

• Investing in communication and partnerships to promote smart lighting
• Developing a roadmap with prioritized activities to reach net-zero targets
• Investing in internal training and development to address skills gaps
• Implementing new structures and adapting the organization to meet the demand for smart lighting

Supply Chain Management

Supplier Audits: 359 suppliers evaluated using environmental criteria, 270 using social criteria in 2023

Responsible Procurement

• Code of Conduct for business partners
• Supplier evaluations and self-assessments
• Policies on human rights, labor conditions, and conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Extreme heat
• Water intrusion in production units
• Shortages of renewable energy

Transition Risks

• Changes in market patterns and product development
• Increased demand for green products

Opportunities

• Increased demand for smart solutions to reduce energy consumption
• Access to new markets and partnerships

Reporting Standards

Frameworks Used: GRI Standards 2021

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 50001 (at some facilities), Cradle to Cradle (for Eagle Lighting's OmniPOD product series)

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 11 (Sustainable cities and communities)
• SDG 12 (Responsible consumption and production)

The report details how initiatives contribute to these goals throughout the document.

Sustainable Products & Innovation

• Kvisten luminaire (77% recycled or renewable material)
• Light Shed Linen luminaire (made of linen)

Awards & Recognition

• Organic Response Smart Lighting Solution accredited by WiredScore Solution