01 IMPROVE SELL
Respect and protect the environment
- Align with recognised frameworks such as SASB, the TCFD and CDP to increase transparency of actions as a core driver for change.
Taskforce on Climate-related Financial Disclosures (“TCFD”)
In complying with the requirements of the new Listing Rule on climate-related disclosures, we have included disclosures against all the key areas recommended by the TCFD. This is our first report following the recommendations of the TCFD and covers our approach as at 31 December 2021. We recognise that we will need to build on the efforts started in 2021 and are committed to continuously improving our approach.
In the table in the Annex to the 2021 Sustainability Report on pages 54 to 55, we summarise our disclosures against each of the TCFD recommendations and we cross-refer to
where the disclosures are in our 2021 Annual Report.
Notable examples of climate-related initiatives and activities in 2020 include:
GKN Aerospace’s decision to move to full ‘green’ electricity use generated through renewable energy in the Netherlands, with an estimated saving of 12,200 metric tonnes of CO2 annually from 2021. In addition, the Trollhättan site in Sweden, which consumes over 50 gigawatt hours (GWh) of electricity annually and is GKN Aerospace’s largest site in Europe, began purchasing renewable energy from its local hydropower plant. • Approximately 45,000 square metres of efficient LED lighting being installed at certain GKN Aerospace facilities in the US and Mexico, saving approximately 800,000 kWh per year in 2020. • Continued promotion by GKN Aerospace (since 2017) of electric vehicle transportation for its employees. It has installed 26 dual point and 17 single point electric vehicle charging stations across eight of its facilities and shares five stations at a multi-tenant location for a total vehicle charging capacity of 74 vehicles per hour. Sustainability Report Continued • GKN Automotive’s European sites continue to drive energy efficiencies and cost savings with ongoing projects relating to LED lighting installation, improved building insulation, and investment in energy-efficient equipment including air conditioning and heating systems. Notable examples in 2020 include the installation of a roof top solar system at the Pune, India site with anticipated annual energy savings of 1,000,000 kWh, and at the Köping, Sweden site, where 100% of heating is now provided by district heating which is generated from industrial waste heat, waste incineration and biofuels. • Investment in energy-efficient equipment by GKN Powder Metallurgy, with a strong focus given to replacing old and less efficient equipment with LED lighting, compressed air generators, motors and motor convertors. • Nortek Global HVAC provides a bus system for employees to use to and from work at their sites in Mexico. This has eliminated more than 700 vehicle trips per day and their associated emissions. In addition to the business-specific examples, the Group as a whole spent £304,579(1) on LED lighting retrofits in 2020.
Sustainability Accounting Standards Board (“SASB”) reporting for 2021
This is our first year reporting against the SASB reporting standards. By reporting in line with the SASB standards we are providing our investors and other stakeholders with comparable, consistent, and reliable data on financially material sustainability factors, which directly impact our long-term enterprise value.
Climate scenario analysis in 2021
The Group is exposed to climate risks and opportunities through our individual businesses. We are aware that the effects of climate change on specific sectors and businesses are highly variable. In 2021, we engaged with external consultants, Ernst & Young, to carry out our first climate scenario analysis to qualitatively assess the likelihood and impacts of climate change related risks on our Group(1).
The climate scenarios that were used for the assessment were:
Lower carbon scenario (RCP 2.6)
Very stringent decarbonisation pathways through policy and technology shifts. In this scenario, emissions start declining immediately and reach zero by 2100. It is likely to keep warming below 2ºC, resulting in lower expected physical climate risks.
Higher carbon scenario (RCP 6.0)
Some emissions mitigation. Emissions rise to 2080 and fall. Warming is likely to exceed 2ºC degrees, resulting in higher expected physical climate impacts.
The analysis focused on a selection of climate-related risk categories across physical and transition risk areas. Given the nature of the analysis and the sectors that our businesses operate within, we identified key areas of material risk exposure that are in various stages of mitigation across the businesses. We have provided an overview (available to download below) of the Group’s physical and transition climate risk exposure and responses.
(1) Ergotron was excluded from the analysis due to low materiality. Its revenue weighting for the Group was 3% based on H1 2021 data.
Melrose Skills Fund
Melrose Skills Fund
The Melrose Skills Fund was launched in 2019 to provide the financing to develop the capabilities required to build the UK’s industrial base, and is utilised by our GKN Aerospace, GKN Automotive and Brush.
With a commitment to invest £10 million over five years through the creation of STEM programmes, apprenticeships and degrees to invest in manufacturing hubs, digital skills, and employee development, Melrose is helping to equip the UK with the future skills it needs to grow its industrial skillset.
Simon Peckham, Chief Executive