We recognise that climate change may have significant implications on the long-term successes of our businesses. We seek to set a positive example for our businesses to follow and we invest in and encourage them to improve their operations and market offerings in a direction that minimises their impact on climate change, and makes them less vulnerable to climate-related risks.
We are true believers in industry, and in the potential of industry, to help solve society’s most pressing needs. We buy high-quality but underperforming industrial businesses, with established positions in their markets. By investing heavily in research and development, we enable our businesses to develop and provide the innovative and cost-effective solutions that their customers need to help tackle underlying causes of climate change.
Efficiency in this area is a material concern for nearly all manufacturing industries, and our businesses are no exception. We therefore support and invest in them to accelerate their efforts to reduce their carbon footprint by, where economically appropriate, taking measures to improve their energy, water and material efficiency by seeking viable, lower-impact, and increasingly lower-cost, renewable energy sources. These actions not only make good long-term business sense, but also respond directly to the expectations set by governments, and the emerging realities of the markets in which our businesses operate.
We are already taking active steps to anticipate how climate change will affect our businesses, and to encourage firm progress from our businesses in respect of positive climate action. We will continue to strengthen our understanding of the specific climate-related risks our businesses face as we work to mitigate these risks.
Melrose sets a positive example, and enables and empowers its businesses to follow. Whilst the central Melrose carbon footprint is relatively limited, we nevertheless offset the emissions that we do generate. The Melrose corporate offices have attained the CarbonNeutral® company certification for 2019 and 2020 through a combination of internal energy efficiency initiatives and financing high-quality, high-impact emission reduction projects in accordance with The CarbonNeutral Protocol(1). The Melrose corporate office in the US has also achieved the HinesGo (Green Office) designation in recognition of its sustainability practices and energy efficiency performance, among other environmental and wellbeing criteria.
We believe that improving operational efficiency is one of two key factors that shape the long-term profitability and sustainability of our businesses, and enables their compliance with increasing environmental standards and regulation. The other key factor is cultivating the technical and innovation capabilities and foresight to provide effective solutions to the emerging ESG challenges that their customers face, including combatting climate change.
See page 59 of our ESG report for further details