14 minute read
Environment 50
climate risks, reflects an emerging litigation risk for company directors in this context also.
Whilst an awareness of the changing legislative and regulatory requirements, and the increasing expectations on companies with regard to climate issues, and the decarbonisation of the economy in particular, is plainly important, there is a clear, positive, role for those responsible for leading companies to play. Campaigns such as the Better Business Act Campaign are actively seeking – with the support of a growing number of signatory companies – revisions to the wording (and scope) of the statutory duty for directors to “act in the way [the director] considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole”, to impose more stringent requirements than merely having to “have regard” to various factors.
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Earlier this year, the Institute of Directors published its policy paper entitled ‘The Green Incentive: how to put net zero at the heart of business planning’, arguing that in order for the UK Government’s target of reaching net zero by 2050, significant work needed to be done to incentivise businesses, and smaller businesses in particular, to take action to decarbonise the economy. The report made a number of specific recommendations which, whilst aimed at the UK Government, are instructive from the perspective of company directors also, in terms of developing (and likely forthcoming) requirements and expectations.
In particular, the IoD report suggested that, in line with the UK’s decarbonisation targets and with the global United Nations’ initiative to encourage small and medium businesses to commit to decarbonisation targets, a clear goal be defined with regard to all businesses achieving net zero in their operations. Secondly, the report called for incentives around net zero performance, including specifically potentially lower corporation tax rates for businesses that achieve net zero within a specified timeframe (or higher rates for other businesses), to be examined.
Relatedly, it recommended that a clear methodology – and clear requirements to report – be established for businesses’ carbon accounting, which could then be used to determine the appropriate corporation tax band for a given company. Finally, the report recommended a governmental assessment of the existing support frameworks for businesses looking to decarbonise.
Taken in the round, then, these developments provide a clear indication not only of the direction of travel, in terms of the more robust legislative and regulatory framework within which companies are operating, but also of the expectations of company directors, and the role they have to play, in terms of steering their companies towards more environmentally sustainable operations. Whilst ultimately there will be little choice other than to comply with increasing regulatory and stakeholder demands in this context, the evolving landscape also provides a potentially valuable opportunity for business leaders to develop best-in-class practices.
Environmental sustainability, and the activities and impact of companies in that context, continues to be a highly significant focal point for multiple stakeholders, both within and outside organisations.
JAMES WHITAKER
Partner & Co-Lead, Mayer Brown International LLP
mayerbrown.com/en
DRIVING SUSTAINABLE WATER USE IN MANUFACTURING
John Lindsay, CEO of Baker & Baker, one of Europe’s leading manufacturers of bakery products, discusses why monitoring and reducing water usage should be a key element of any business’s sustainability strategy, and considers how food and drink manufacturers can reduce their consumption.
With climate change widely reported to be the cause of this summer’s recordbreaking heatwave and subsequent droughts, it’s a stark reminder that the UK can’t take its water supply for granted. And, as scientists predict that scorching summers will become the norm, we must act now and tackle the pressing issue of water security head on. The 2030 Water Resources Group estimates that water demand will exceed current supply by 40% by 2030. Furthermore, with a report by the European Environment Agency (EEA) finding that around 30% of Europe’s population is affected by water stress during the average year, it’s time for businesses to examine their water consumption and how they can improve. Industrial and manufacturing companies are among the heaviest users of water throughout the supply chain to help source, make, pack, transport and stock goods, yet water is often overlooked by businesses trying to enhance their sustainability credentials. Sourcing, processing, treating and transporting water all has a direct impact on carbon emissions.
As a food manufacturer, we are acutely aware that industrial water consumption has an impact on the world’s water supply and our carbon footprint. Food production and consumption alone are responsible for around 30% of global carbon emissions (1), so reducing water usage has a positive impact on a business’s carbon footprint. After agriculture, food production is the second highest consuming industry of water (2) and, with global and local demand for water increasing, the food and drink sector has a crucial role to play in safeguarding and improving water security.
Moderation equals conservation
Water is essential to the food we eat, but how can we, as an industry, use water more efficiently to minimise the impact of water stress on people and the environment?
At Baker & Baker, we have been putting an increased focus on sustainable business practices and we’re proud to be among some of the UK’s top food and drink companies to officially support WRAP’s new Roadmap towards water security for food and drink supply. The ‘Water Roadmap’ seeks to improve the quality and availability of water, working towards a target of sourcing 50% of the UK’s fresh food from areas with sustainable water management. It delivers a practical framework to help food and drink businesses know what steps they can take to increase water efficiency in their operations and help preserve this precious resource. Providing a clear and logical route for improving water management, the new Water Roadmap directly addresses climate risk and water stewardship. It sets out the steps businesses must take individually and collectively to deliver this vision by progressing through the five stages of the WWF Water Stewardship ladder. Participating companies are encouraged to adapt their supply chains and incorporate a number of targets, including: monitoring water use in their operations and improving efficiency identifying water risk hotspots in their supply chain identifying suppliers operating in ‘high water stress’ areas and encouraging them to engage with local water stewardship initiatives The roadmap also highlights the milestones that businesses need to reach and how they report their progress to ensure that the intended results are achieved.
As we head towards a carbon-free future, meeting ambitious Environmental Social Governance (ESG) goals present opportunities for businesses to adapt their processes as part of their managed journey to net zero. Having a realistic water management strategy in place is an important first step for manufacturers that are committed to improving their sustainability and curtailing environmental impact. And, of course, reducing water is not just better for the environment - it can help to drive down operating costs and save money too.
Manufacturers need to start accessing and using water in new ways and there are many realistic measures that they can introduce to improve their water management.
Taking action on water
It’s estimated that 3 billion litres of water are lost to leaks every day across England and Wales, so leak detection should be a key element of any business’s water strategy. By monitoring water usage, firms will be able to spot and address leaks more quickly, reducing wastage.
Similarly, investing in water-efficient technologies, such as timers and controls to automate water usage, can reduce water consumption and waste. Recycling water by using modern ‘grey’ water systems also helps reduce usage.
Baker & Baker’s strategy is to reduce water use and increase re-use where possible. Under our roadmap commitments, we will be developing water reduction targets for each of our four UK plants early next year, aiming for incremental improvements year-onyear. These targets will be published so that we can transparently demonstrate our progress.
Although small improvements will be possible via eliminating leaks or other efficiencies, we will also be considering projects such as reducing water usage during equipment clean-downs without compromising on food safety and regulatory requirements.
We also use the WWF Water Risk Filter – a comprehensive resource that helps businesses to identify water risk hotspots globally. It’s invaluable for businesses with international supply chains that source raw materials from countries or regions suffering from water stress or pollution.
The Environment Agency has warned that 3,400 million more litres of water could be needed every day by 2050 if we don’t take action to address our water security. Water management must be embedded into the sustainability strategy of any business to help protect our water resources, restore biodiversity and achieve Net Zero goals.
JOHN LINDSAY
CEO, Baker & Baker
bakerandbaker.eu
About Baker & Baker
Baker & Baker, wholly owned by Rhône Capital, is one of Europe’s leading suppliers of Bakery Products. Operating across 12 sites in seven countries the business is headquartered at its UK site on the Wirral in the North West of England. More details at wrap.org.uk and bakerandbaker.eu.
1. Source: WRAP, UK Food System GHG Emissions report 2. Source: ResearchGate, water consuming sectors in the UK
The Greener Manufacturing Show Returns to Koelnmesse, Cologne, Germany with Cutting-Edge Innovations to Accelerate your Transition Towards a More Sustainable Future on 9-10 November 2022
The must-attend event to see sustainable manufacturing solutions, The Greener Manufacturing Show Europe, co-located with Plastic Waste Free World Expo and Conference, returns to Koelnmesse, Cologne, Germany, for its second year on 9-10 November. Pioneering industry exhibitors will showcase the latest tech to help you reduce emissions and improve sustainability across your value chain. Alongside the exhibition, the conference will host 130+ renowned industry speakers. In 2022 more than 3,000 high-quality visitors and key industry brands will be attending, including Circularise, Lenzing, Siemens, Trinseo, Valmet, UN Industrial Development Organization (UNIDO), Prevent Waste Alliance, and event sponsors Mondi. Launched in 2021, the trade fair and conference attracted just under 2,000 in-person attendees, despite Covid-19 restrictions. It was apparent that companies from many sectors have begun placing sustainability at the top of their agenda. Mike Robinson, the CEO of the company that organises the event Trans-Global Events, said: “When we created the event concept, we could clearly see that there was a very urgent need for manufacturing industries to find new sustainable and environmental solutions.
“The desire to develop more sustainable products is a global shift, where many are adopting new technologies and strategies to help reduce the negative effects of industry on the environment.”
The Greener Manufacturing Show is co-located with Plastic Waste Free World Conference & Expo and purchasing a single conference pass gives you access to both events. “The first edition Plastic Waste Free World Conference & Expo launched in 2019 with the goal of helping manufacturing companies find new solutions to help tackle the global plastic waste crisis – whether this is through new materials, eco-design, consumer engagement strategies, or innovative end-of-life solutions.
“The Greener Manufacturing Show released during the Covid-19 pandemic, and with just under 2,000 in-person attendees in 2021, it showed that companies from many different sectors are placing sustainability at the very top of their agenda,” said Robinson. The conference streams will cover different sectors and a wide range of topics, including: Sustainability In Manufacturing Retail, Consumer Goods & Packaging Fashion & Textiles
Sustainable Materials
Not only does the event allow businesses to attract a growing number of sustainability-conscious customers, but it also provides exhibitors with opportunities to expand into various markets.
The Plastic Waste Free World Conference & Expo that took place in Atlanta in June gave Sirane Group, one of the exhibitors, the chance to expand into the US market. Sirane Group’s NPD Lead Rachel McKenna wrote: “Atlanta has provided us with a great opportunity to share our technologies with the market.
“In the USA, we have recently partnered with PrintPack; they are supplying commercial reels of EarthFilm, offering in-house printing for customers. As of August 2022, Sirane will be opening a pouch conversion facility in Grand Prairie, Dallas, Texas.” The Greener Manufacturing Show and Plastic Waste Free World will also help businesses comply with sustainability policies being developed worldwide as governments aim to reduce their environmental impact. The EU will in the near future enforce new regulations across several industries.
Soon, construction products will be required to be greener and safer.
Reporting and tagging information across the value chain will become essential in adhering to sustainability standards. EU member states will be obligated to pay a levy of €0.80/kg of non-recycled packaging waste. Fashion companies will need to rethink textile designs to increase the life span of garments and to make them easier to recycle. Make sure to take advantage of the numerous opportunities, solutions and innovations available at the Greener Manufacturing Show Europe co-located with Plastic Waste Free World to succeed in a fast-transitioning world focused on sustainability. For more information visit:
www.greener-manufacturing.com www.plasticfree-world.com
EUROPE
KIMBERLY-CLARK: SUSTAINABILITY IS OUR FUTURE
Kimberly-Clark’s ambitious sustainability strategy won’t be derailed by current global upheaval, as Oriol Margo, sustainability transformation leader (EMEA), explains to Karen Southern.
We’re living in unprecedented times. The rulebook for industry ‘norms’ has been ripped up as economic turmoil continues. So does sustainability still have value in the current climate?
The answer is a firm ‘yes’, according to Oriol. Kimberly-Clark, he says, remains focused on the bigger picture when it comes to sustainability, with plans to halve direct (Scope 1 and 2) emissions by 2030. Plans are also underway to cut indirect (Scope 3) emissions by 20% within the same timeframe.
The US multinational produces a vast amount of consumer products (toilet rolls, wipes, nappies, sanitary products) that are global household names … think Huggies, Kleenex, Andrex. With a customer base representing a staggering quarter of the global population – or two billion people – using its products every day, it follows that the company’s manufacturing processes and consumer habits have been historically environmentally intensive. “We get asked about the value of sustainability a lot, and of course it’s a difficult situation,” Oriol explains. “We are tackling many inflationary pressures in energy and materials, and ideally wouldn’t want to pass these costs on to our consumers.
“Kimberly-Clark prefers to focus on the long-term outlook, not short-term challenges. Our strategies, targets and ambitions haven’t changed. We are here to deliver what customers want, and they tell us they still want sustainable choices.”
Oriol concedes, however, there is a clear gap between intent and outcome in consumer behaviour. “It takes only a few seconds to choose a product, and sustainability is not always the top choice for purchasing.
“Even before this crisis, the majority of consumers weren’t prepared to pay more for sustainability. This was already a challenge for us, so we decided to concentrate on innovation in new energy sources and materials which will help us maintain and improve performance and affordability.
“Our teams are used to adapting to change, you know, it’s not a problem for them. They remain totally committed to reducing our environmental footprint to its smallest possible size.”
Three mill employees with Kleenex at Barrow. Oriol points out that Kimberly-Clark has long championed good environmental husbandry, “but the challenge now is to deliver grassroots ‘greener’ solutions quicker than ever.”
Energy and climate concerns are naturally high on the company agenda, and Kimberly-Clark is using the UK as an incubator market for testing and piloting some of its latest net zero strategies, which include bumping up hydrogen and biomethane production. “The regulatory framework is moving fast here, and we have a good track record of partnering with government agencies,” Oriol explains. “Investment to decarbonise gas and electricity is intensive, running into billions of pounds, and we’re not in the business of energy generation, so another of our strategies is partnering. We act as an anchor for long-term commitments that enable such investment.
“We’ve partnered with Octopus Energy on a new Scottish wind farm (a Kimberly-Clark EMEA first) to make almost 80% of our UK electrical power renewable. Octopus has invested £75m in this project, and we are in it for the long run. From here, we will use similar investment models for hydrogen and other innovations. Materials is a different challenge, but basically we are building a model to evaluate a proper return on sustainability – not just monetary but non-monetary returns as well. “Our teams are also working on an internal mechanism for an holistic assessment of these returns, which will really support our decisionmaking.” Elsewhere, a biomass boiler – again an EMEA company first – has been installed at a Spanish manufacturing facility to reduce gas consumption emissions by 40%, with biomass mostly sourced from waste forest residues within 100km.
Kimberly-Clark is also channelling formidable resources into plastic product and packaging alternatives, including biodegradable, recycled
