Our Targets and Commitments

Driving improved sustainability performance across our businesses

The manufacturing businesses that we acquire often operate in the industries that are some of the most difficult to decarbonise. To effect meaningful change and improvement within our businesses during our ownership period, and to set the foundations that can enable our businesses to continue their trajectory even after our ownership period, we set a strong focus on sustainability improvement within each business that we acquire. Whilst under our ownership, we lead our businesses by example and enable fast and sustainable operational improvement supported by targeted investment. We provide them with the resources to monitor and report their sustainability performance, and enable them to benefit from the sharing of Group best practices to accelerate the pace of change within their organisations. Once our sustainability framework is embedded within our businesses, they are driven to achieve ambitious Group sustainability targets, in close alignment with the UN Sustainability Development Goals and the sustainability issues that are material to Melrose.

During 2021, we have engaged closely with our businesses to set our Group sustainability targets. Our targets aim to drive sustainable management of our businesses input resources, to improve the efficiency of their operations, and to minimise the impact of their outputs. Melrose seeks to achieve measurable and tangible improvements that deliver on our promise to improve our businesses’ longer-term financial and operational performance in a sustainable manner.

Each of our businesses are at a different stage of their respective strategic sustainability improvement journey, and at different points in their Melrose tenure. By the very nature of our ”Buy, Improve, Sell” strategy, our Group sustainability performance will fluctuate during our investment cycle as we acquire new businesses in need of improvement, and sell businesses that we have improved. These differences among our businesses, and the unique nature of our business model, have been assessed and considered in setting the parametres of Melrose Group sustainability targets as set out below.

Targets

 Fulfilled and being maintained   On track   Target not met   Monitoring

 

Environmental – Respect and protect the environment

Material Issue Melrose Action Melrose Group Performance Target Progress
Responsible sourcing

Source our global electricity from renewable source

  • Source 50% of our electricity from renewable sources by 2025 and 75% by 2030(1)
Waste Divert our waste from landfill
  • Divert 95% of our waste from landfill by 2025 and 100% by 2030(2)
Energy and consumption Reduce our global scope 1 and scope 2 emissions intensity
  • Reduce CO2e/£m revenue by 20% on average across the businesses by 2025(3)
  • Achieve net zero greenhouse gas emissions by 2050
 

Environmental – Continue to invest in and support our businesses as they develop products and services aligned with a net zero future

Material Issue Melrose Action Melrose Group Performance Target Progress
Innovation and R&D Increase expenditure on R&D relating to climate-related solutions that contribute to the decarbonisation of the sectors in which our businesses operate
  • Achieve 50% of total R&D expenditure on climaterelated R&D per year to contribute to the decarbonisation of the sectors in which our businesses operate by 2025, 75% by 2030 and 100% by 2040
Sustainable products 

Develop new products that contribute to the decarbonisation of the sectors in which our businesses operate

  • Achieve 50% of new products which contribute to the decarbonisation of the sectors in which our businesses operate by 2025, 75% by 2030 and 100% by 2040

Social – Promote diversity, prioritise and nurture the wellbeing and skills development of employees, and support the communities that we are part of

Material Issue Melrose Action Melrose Group Performance Target Progress
Health and safety Protect our employees from lost time accidents (LTAs) Achieve and maintain an average LTA frequency rate below 0.1

Commitments

Our focus on investing in our businesses to create a more sustainable future does not stop at setting sustainability performance targets. To support the achievement of our targets over the longer-term, and to capture the wider contributions and investments that Melrose makes towards promoting sustainable outcomes in a more holistic manner, Melrose is also focused on fulfilling the following commitments: 

Social – Promote diversity and prioritise and nurture the wellbeing and skills development of employees and the communities that they are part of 

Material Issue Melrose Commitment Progress
Talent and workforce Ensure that all permanent employees receive regular (annual) formal performance reviews by 2022 where permitted by local laws and employee representative bodies
Community Invest £10 million over five years through the Melrose Skills Fund
Diversity and Inclusion Achieve by 2021 and maintain a Board and Executive Committee comprising at least 33% female membership
Diversity and Inclusion

Maintain achievement of the Parker Review recommendations

 

 

 

Governance – Exercise robust governance, risk management and compliance

Material Issue Melrose Commitment Progress
Ethical Conduct and Compliance /
Business Model Resilience
All employees, suppliers and contractors must comply with our Code of Ethics, conducting business with integrity and in a responsible, ethical and sustainable manner

We look forward to providing an update on the Group’s progress towards achieving our targets and fulfilling our commitments within our 2022 Annual Report.

(1) Where renewable electricity is commercially and reasonably available in the relevant jurisdiction.
(2) Excluding hazardous waste, which is already disposed of correctly outside landfill.
(3) Target baselined on 2021 performance. Baseline was set in conjunction with the timeframe of the Group’s target setting process.