THG - May 2024

Bold Sustainability Goals to Create a Better World

BOLD SUSTAINABILITY TO CREATE BETTER

SUSTAINABILITY GOALS CREATE A WORLD

Mark Jones, Chief Sustainability Officer at THG, on how the global ecommerce leader is making a positive impact in the realm of sustainability

Amid the growing rise of the ecommerce market globally, consumer habits and priorities are evolving rapidly. For today’s consumers, sustainability stands out as one of the most significant trends. Driven by heightened awareness around climate change, plastic waste and unethical labour practices, consumers are actively seeking out brands and retailers that prioritise environmental and social responsibility.

This shift in consumer mindset presents both challenges and opportunities for businesses looking to adapt and meet these changing expectations. On one hand, implementing sustainable practices throughout the supply chain and product lifecycle can be complex and costly.

On the other hand, brands that authentically embrace sustainability principles stand to gain a considerable competitive advantage. Numerous studies have shown that consumers, particularly younger demographics, are willing to pay more for products and services aligned with their environmental values.

According to figures from Statista, in the biggest urban areas worldwide, carbon emissions due to ecommerce logistics are forecast to hit around 25 million CO2 metric tonnes by 2030. To tackle these sustainability challenges, organisations must think differently, implementing sustainability initiatives across their supply chains.

Mark Jones Chief Sustainability Officer, THG

THG, a digital first consumer brands group, is tackling these issues head-on. With its portfolio of leading beauty, health, wellness and sports nutrition brands, THG operates three distinct businesses – THG Beauty, THG Nutrition and THG Ingenuity, each scaled from the UK to hold global leading positions in their respective sectors.

As THG’s Chief Sustainability Officer, Mark Jones oversees all of THG’s strategic and co-implementation across environmental and social aspects of the business. Joining the business in June 2023, the role represents an exciting opportunity to build THG’s sustainability strategy, THG x Planet Earth.

“We have set several specific targets. First, we aim to reduce our Scope 1 and Scope 2 emissions by 42% by 2030 based on the Science Based Targets initiative (SBTi),” he says. “Our long-term targets are to cut Scope 1 and 2 emissions by 97.7% and Scope 3 emissions by 90% by 2040 – 10 years ahead of the Paris Agreement timeline. These are bold goals, but we are willing to take on this challenge as it is crucial for us to contribute positively to society and the environment.”

THG: Making an impact and acting as a force for good Headquartered in Manchester, UK, the group comprises three distinct businesses. Firstly, in Nutrition, THG includes Myprotein, the world’s largest online sports nutrition brand, and it’s subsidiaries, such as Myvegan.

From a Beauty standpoint, THG has curated a diverse portfolio of skincare, haircare and cosmetics, blending its brand offerings with those of third-party suppliers. These products are sold through its online

“GETTING OUR ROADMAPS AND TARGETS ASSURED BY SBTI, WHO ARE DEDICATED AND ALIGN TO THE LATEST CLIMATE SCIENCE, INDICATES TO OTHERS OUT THERE HOW SERIOUS WE ARE”

MARK JONES CHIEF SUSTAINABILITY OFFICER, THG

retail platforms, including LOOKFANTASTIC, Cult Beauty and Dermstore.

Supporting these core functions is THG’s Ingenuity arm, which focuses on digital commerce. Here, THG provides comprehensive support to clients, ranging from website development to fulfilment, distribution and marketing services.

Across these business divisions, one thing remains constant. THG’s core mission is to make an impact through digital transformation, innovation and expertise. As Jones highlights, the key word here is ‘impact’.

“Within THG’s sustainability core purpose, our vision is to act as a force for good and to leave the world in a better place than we found it.”

MARK JONES

TITLE: CHIEF SUSTAINABILITY OFFICER

INDUSTRY: ECOMMERCE

LOCATION: UNITED KINGDOM

Mark Jones is Chief Sustainability Officer at THG and is responsible for building THG’s overall sustainability strategy and driving implementation across the business to tackle carbon, circular economy, ESG and social responsibility.

Mark’s experience covers all sustainability matters within the operations and supply chain space, including circular economy, human rights and Scope 3 emissions from hardware and logistics suppliers.

“WE KNOW SUPPLIERS ARE GETTING FATIGUED WHEN IT COMES TO DATA. AS A RESULT, WHAT WE HAVE DONE IS LOOK AT SUSTAINABILITY FROM A MUCH MORE HOLISTIC VIEW”

MARK JONES

CHIEF SUSTAINABILITY OFFICER, THG

The company’s sustainability strategy, THG x Planet Earth, is built around three pillars: protecting climate and nature, strengthening supply chain and circularity and empowering people and communities.

“Those three pillars help define what our sustainability strategy looks like,” Jones says. “Within those pillars, we have several goals and smart targets that help drive the business from the top down and bottom-up to implement sustainability as a whole.”

Since Jones joined THG in June 2023, he has overseen several key achievements. In September 2023, a significant milestone was reached when THG’s net zero greenhouse gas targets received approval from SBTi.

“Getting our roadmaps and targets assured by SBTi, who are dedicated and align to the latest climate science, indicates

to others out there how serious we are when it comes to tackling net-zero and decarbonising across our full value chain.”

Another noteworthy achievement in THG’s sustainability journey is the ongoing innovation it inspires. Last year the company was honoured by the Environmental Finance Awards for its circular economy programme, which focused on repurposing excess Myprotein stock that would otherwise have been unsuitable for sale.

“We’ve worked with a third party group which has taken this material – which would have gone to landfill – and found an innovative way to upcycle the material into animal feed. In total, we have converted 156 tonnes into animal feed and fish feed, and then even taken the cardboard and plastics out of those products and further recycled those materials.”

Key to enabling initiatives like this is fostering a culture where teams are engaged when it comes to sustainability.

“There are a lot of folks at THG who are naturally very engaged and invested in the sustainability space. I think what’s helped us is creating an environment that allows our people to showcase what they’re doing from that end.”

THG Partnership in Action (PACT) tackling Scope 3 complexities

Undoubtedly, Scope 3 presents the most demanding challenges within the realm of sustainability. With 97% of THG’s total carbon footprint coming from Scope 3, it was imperative to identify how THG could make the most substantial impact on sustainability across its operations.

In response to this challenge, THG has instituted the Partnership in Action (PACT) initiative programme, with three primary objectives.

Firstly, the programme aims to establish specific supplier targets, clarifying the rationale behind data collection and its subsequent application in measurement. Secondly, it seeks to streamline data collection processes for suppliers, simplifying their involvement in THG’s sustainability efforts. Thirdly, it focuses on resource provision.

“THG is unique compared to other groups, especially when engaging with suppliers. Not only are we a customer, but we also provide services. When engaging suppliers, we look to create valuable resources for them, such as documents and training materials to help collect information.”

In addition to these resources, THG offers services like THG Eco – its external sustainability consultancy arm – which provides a range of services including lifecycle assessments, greenhouse gas inventories and support for initiatives like science-based targets.

“Right now, I think sustainability is being kept in a little black box by not sharing information widely, but for us at THG, the notion is how we use our scale for good. This goes back to our mission of making an impact, and having that ripple effect across to other organisations and other stakeholders by sharing lessons learnt with everyone.”

As Jones highlights, PACT extends beyond carbon considerations, recognising supplier fatigue with data collection.

“We know suppliers are getting fatigued when it comes to data. As a result, we have looked at sustainability from a much more holistic view. We are looking at not only collecting data

from a carbon or an energy perspective, but from a perspective of circularity, social responsibility and human rights, and looking to work with our suppliers rather than work against them.

“That’s what PACT is all about, collaboration and partnership. The key to success for sustainability and Scope 3 is not only how you collaborate internally, but then how you create that partnership externally with suppliers and other stakeholders to be part of that same journey.”

Enhancing

circularity in THG’s operations

From a circularity perspective, Jones identifies three key aspects to consider. The first is product design – ensuring products are designed from the outset for circularity and a circular lifecycle. Second is the manufacturing process itself and how it can be made more circular and sustainable,

PROTECTING CLIMATE AND NATURE

THG has committed to setting sciencebased targets in line with a 1.5°C future by the end of 2040, aligning with the UK Government’s target for net zero greenhouse gas emissions by 2050, and the Paris Climate Agreement to limit the global temperature increase to 1.5 °C.

In the meantime, THG has taken immediate climate action by procuring renewable electricity and investing into on-site solar panels across its sites to help reduce operational carbon emissions.

Sustainability is such an enjoyable topic because it’s that combination of solving problems and creativity.

and third is implementing robust end-of-life customer take-back programmes to recover products after use and feed them back into the circular economy.

“At THG, we have several initiatives covering the key aspects of circularity. On the manufacturing side, we launched our zero waste to landfill programme last year. We are also working towards achieving the third-party TRUE certification, which focuses on diverting materials from landfill and, crucially, finding innovative solutions to prevent waste generation in the first place.”

These programmes support the THG x Planet Earth targets to achieve zero waste to landfill by 2030 across all of the company’s operational sites and supplier facilities. By eliminating landfill waste throughout its entire operations and supply chain, THG aims to enhance circularity in the manufacturing process.

In addition to finding innovative ways to divert materials from landfill and convert them into fish feed and agricultural feed products, THG has several examples of innovative thinking.

The team at THG Studios – one of the biggest creative studios in Europe – practices circularity through partnerships. “They work with the Manchester-based charity Mustard Tree on repurposing used furniture from across our group. Rather than sending office furniture and equipment to landfill after use, we donate these materials to Mustard Tree.

“This circularity initiative allows donated furniture and materials to be reused and repurposed by the charity for other applications,” Jones adds. “By giving a second life to these items instead of disposing of them, we are furthering circularity principles and preventing unnecessary waste from going to landfill.”

“WITHIN

THG’S SUSTAINABILITY CORE PURPOSE, OUR VISION IS TO ACT AS A FORCE FOR GOOD AND IN LEAVING THE WORLD IN A BETTER PLACE THAN WE FOUND IT”

MARK JONES CHIEF SUSTAINABILITY OFFICER, THG

Lastly, from a beauty perspective, THG has programmes such as RecycleMe aimed at promoting circularity. “Through RecycleMe, we enable customers to send us their hard-to-recycle plastic beauty packaging. We then collaborate with key brand partners to recycle and repurpose those plastic materials into new products.”

Rather than having the hard-to-recycle plastics go to landfill or incineration after use, this take-back programme allows THG to capture these materials and feed them back into circular supply cycles as recycled content. “By finding innovative ways to transform these materials, we can extract maximum value before finally recovering them into new products and applications.”

Developing THG x Planet Earth and focusing on biodiversity

As Jones describes, THG is prioritising several key areas when it comes to sustainability. Firstly, it aims to expand its PACT programme to more suppliers,

fostering stronger partnerships across various groups while closely monitoring the progress of these initiatives. Given that THG’s sustainability programme is relatively young, at just over two years old, Jones explains that the company is committed to further developing both the programme itself and the data supporting it.

“As we continue to get closer to regulatory dates like the Corporate Sustainability Reporting Directive (CSRD), we will be looking at how we collate all that data and information to be ready for that reporting period.”

As new sustainability initiatives and new regulations emerge, Jones also predicts that there will be a significant focus on biodiversity and nature, especially within its nutrition brands which use commodities such as cacao, whey and soy.

“How we tackle opportunities such as regenerative agriculture to things around deforestation-free products is going to be a really important aspect for us, and the same for our beauty brands as well.

“There is a lot for us to be working on over the next 12 to 18 months. It definitely won’t be a quiet period, to say the least, but it’s a really exciting opportunity,” he concludes.

“Sustainability is such an enjoyable topic because it’s that combination of solving problems and creativity. There are always new challenges coming through. No one day is the same as the other, but trying to work with your team, trying to work with the group across THG to come up with solutions is a nice challenge.”