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PATHWAY TO ZERO

We completed the initial phase of our work with Carbon Trust to create a baseline of our emissions in all scopes, to forecast emissions growth and to assess feasible 10-year targets for reduction in line with the Science Based Targets initiative (SBTi) 1.5°C scenario. This led to setting public commitments and targets, including supporting British Retail Consortium’s (BRC) Climate Action Roadmap to achieve net zero by 2040. In FY21 we have initially focused on setting our 10-year target and a plan to reduce Scope 1 and 2 emissions, as we have more robust data and the decisions are within our control. We have also built out a more robust model of our Scope 3 emissions. In September 2021 we set our 10-year targets for Scope 3 and SBTi approved our full value chain targets. In FY22, we will feed our climate change risk assessment results into the development of our wider climate change roadmap.

SCOPE 1 (DIRECT) EMISSIONS

Emissions from gas heating, air conditioning units and refrigerants, and owned and operated logistics (home delivery network, fitter vans and company cars).

While gas accounts for a smaller part of our energy usage than electricity we continue to reduce emissions by replacing gas heating and cooling systems with electric power, and gaining efficiencies by optimising heating times and controls. This forms part of our multi-year investment programme to remove gas heating where practically possible and, where feasible, harmful refrigerants. We have created an asset register of all refrigerant gas types by location and where we replace units, we will ensure that we install new units with new lower global warming potential (GWP) gases (such as R32). If it is not possible to remove gas entirely, we seek to decarbonise.

GHG reduction targets (rather than cost and functionality alone) are now firmly at the heart of store refit decisions. In FY21 we replaced gas installations when we refitted our Banbury store and removed the previous occupier’s gas at our Clydebank re-site; our new store in Gateshead is gas-free. We also approved a 10-year plan to decarbonise gas heating.

Home delivery network (HDN) fleet

We use telematic technology, alongside driver training, to make the best route choices, reduce idling time and improve driving habits. We maximise vehicle fill to optimise the number of deliveries and to lower fuel usage and carbon intensity. As a result of our increase in online sales, the volumes handled by our fleet have increased and this has led to an overall increase in our Scope 1 emissions, although our overall carbon intensity measure, which is linked to sales, has reduced. We have sought to mitigate our impact by maximising vehicle fill to reduce the number of deliveries. To meet our long-term Scope 1 targets, however, we are dependent on advances in vehicle technology and national electric vehicle charging infrastructure, and are working with our logistics partners and BRC industry working groups to support change and stay aware of developments in these areas.

Company car fleet

We are introducing a low-emission electric and hybrid company car fleet in FY22, aiming to phase out other vehicles by 2025, and developing a colleague communications plan to encourage take-up. In June 2021, we completed the installation of electric vehicle charging points at our Syston Support Centre. In FY21, company car fleet emissions reduced by 33%, helped by restricted travel during lockdowns.

SCOPE 2 (INDIRECT) EMISSIONS

Purchased electricity and reduction in electricity consumption; LED lighting.

The vast majority of our Scope 2 GHG emissions come from electricity consumption. Since 1 April 2019 we have switched to Renewable Energy Guarantees of Origin (REGO)-qualifying electricity sources for all sites where we purchase this directly and have committed to doing so (as a minimum) until 2030.

Although this reduces our Scope 2 emissions to zero, we continue to take action to reduce electricity consumption. LED lighting is standard in new installations, and is fitted at 99% of our sites. To raise internal awareness, we have implemented a sustainability induction training module for store-based colleagues, covering energy and waste. We also continue to minimise usage through our centralised building management systems (BMS). During the year we reduced our like-for-like electricity consumption versus FY19 by 15%; this performance was favourably impacted by Covid.

SCOPE 3 (SUPPLY CHAIN) EMISSIONS

Product (stock) suppliers, non-product (non-stock) and logistics suppliers

As is the case for most retailers, most of our carbon emissions are generated outside our operational control in Scope 3. The reduction of these emissions represents our greatest opportunity and toughest challenge. We have worked throughout the year with Carbon Trust and our suppliers to establish a more robust baseline model for our Scope 3 emissions, covering major non-stock purchases, outsourced logistics and a significant portion of our textiles supply route, which accounts for around 50% of our own brand sourcing volumes. This has shown us that over 80% of our Scope 3 emissions are attributed to the sourcing and manufacture of our products.

We will continue to work with suppliers to develop and verify this model, and to understand and implement the actions that need to be taken to reduce them.

Influencing customer and colleagues

We are introducing information, products and services (some of which are covered under ‘Circular Economy’), to support our customers and colleagues in reducing their own emissions and also support our commitment to net zero and to Textiles 2030.

Moving forward: focus on GHG emissions

  • Develop climate change roadmap to achieve new 10-year targets.
  • Refine and develop our climate change risk assessment in specific hotspot areas.
  • Refine Scope 3 emissions model and data collection.
  • Build carbon considerations into more business decision-making processes.

SECR REPORTING

In the tables below we set out the greenhouse gas emissions disclosures required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

Streamlined Energy and Carbon Reporting (SECR)

Summary MWh FY19 FY20 FY21
Purchase of energy 57 51 53
Vehicles on Company business 5 3 3
Vehicles in the Home Delivery Network 9 12 15
  71 66 71

Energy consumption has increased by 8% year-on-year, driven by the increased heating and ventilation necessary in stores, in response to adjustments made for Covid-19 safety. We are focused on improving energy efficiency through our building management systems (BMS) and exploring wider energy saving alternatives. Miles driven by the Home Delivery Network increased by 25% year-on-year (FY20: 26%) as a result in the growth of our home delivery sales. We aim to offset this through our focus on vehicle fill, and reducing the number of journeys made accordingly, alongside improved driver training.

Greenhouse gas (GHG) emissions (tCO2e)

  FY19 FY20 FY21
Direct emissions (Scope 1) 7,260 6,937 7,936
Indirect emissions from electricity (Scope 2) 11,002 8,757 7,866
Total GHG emissions 18,262 15,694 15,802
Turnover £m 1,100.4 1,057.9 1,336.2
GHG intensity per £1m turnover 16.6 14.8 11.8

The reduction in indirect emissions is a result of slightly reduced electricity usage and the reduction of UK grid electricity carbon intensity. Increased energy used within the Home Delivery Network as a result of the increase in miles driven has been offset by reduced energy usage within the company car fleet. Overall, the growth in turnover in FY21 has not driven an equivalent increase in emissions and our carbon intensity has reduced as a result.