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Internal
1Electrocomponents’ ESG approach April 2021
Internal
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Building on our strong track record:
An ESG leader in global industrial distribution, ambition to be
top tier across all sectors*
Strong track record in reducing our environmental impacts –
31% reduction in CO2 due to premises energy use since
2015**
Focus on education programmes to inspire future engineers
and innovative solutions to key global issues
Extensive support for customers, colleagues, suppliers and our
communities during COVID-19, embedded into BAU
Four impact pillars with 2025 targets and initiatives identified Environment
Customers and suppliers
People and health & safety
Community
Underpinned by strong governance, ethics and compliance
Aligned with our purpose and Destination 2025 strategy
ESG mission aligned with our purpose
ESG success factors being integrated into our five strategic
priorities, group targets and key initiatives
Building alignment with strategic investment plans
* See slide 18 for our leadership level performance in key ESG benchmarks ** Emissions updated to reflect changes in reporting methodology and emissions factors
Overview
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Buildi
Our ESG approach addresses our most material issues
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► Materiality assessment conducted in January 2020 to identify key ESG issues
► Customers, suppliers, our people, shareholders, regulators, media and NGOs engaged in the process
► 5 key material issue groupings identified:• Environment • Customers and suppliers• People • Community• Governance, ethics & compliance
► The materiality assessment combined with the UN’s Sustainable Development Goals guided the development of our ESG plan,
targets, KPIs and reporting
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Our ESG approach at a glance
Our purpose and ESG mission:
Making amazing happen by inspiring a more sustainable world through
education and innovative solutions that improve lives
Four strategic impact pillars:
Environment Customers and suppliers
People and health & safety
Community
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Underpinned by:
2025 targets and initiatives
Strong governance, ethics and compliance
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Environment Customers & suppliers People and health & safety
Community
Our focus Proactively limit our
environmental impacts to tackle
climate change and ensure our
business grows sustainably
Work with our suppliers to improve
the sustainability of our value
chain and deliver innovative and
sustainable solutions for our
customers
Build a safe, inclusive and
dynamic culture which enables
our people to bring their true self
to work and thrive
Enable education and innovation
that improve lives and inspires
future engineers
2025Targets
Be 50% more sustainable by
halving the intensity of our
emissions, packaging, waste
and water impacts*
Grow our customer NPS score
to 70
Further ESG targets in
development
Increase our female leader
population 2% year on year
from baseline of 26% in 2019
30% reduction in All Accident
rate*
Uplift our employee
engagement score to 77
Targets in development for:
new global charity
partnership, volunteering and
education programme
Key initiatives
Energy and carbon reduction
– direct operations and fleet
Packaging, waste & water
reduction
Transport & logistics
optimisation
Environmental management
systems & compliance
Low carbon product ranges
Product sustainability flags
End to end ethical &
sustainable value chain –
sourcing, production,
certifications, transport &
logistics, packaging, labour
standards & human rights
Health & safety
Diversity & inclusion
Employee engagement
Working practices, human
rights, fair pay
Education for engineers of the
future
Global partnership with
Engineers Without Borders and
new global charity partnership
Volunteering
Supporting 6 SDGS
Four strategic pillars
*2018 baseline
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Our focus Proactively limit our environmental impact to tackle climate change and ensure our business grows sustainably
2025 target Be 50% more sustainable by halving the intensity of our emissions, packaging, waste and water impacts from a 2018 baseline
Environment
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Current progress
31% reduction in in absolute emissions since 2015 (46% intensity
reduction)*
Electricity from renewable sources is 11% of total electricity use
Solar panels on new Bad Hersfeld DC – 750 kW capacity
Energy efficiency measures and LED lighting
EV charge points installed in US, UK, France, Germany and
Netherlands
Early TCFD supporter working towards full disclosure
Future focus
Global energy optimisation and decarbonisation strategy for
our 12 DCs, offices, RS Locals, company cars and vans
Transport & logistics optimisation to reduce complexity and
improve sustainability in the end-to-end supply chain e.g.
optimising transport legs and minimise air freight
TCFD compliance - conduct climate scenario analysis
* At constant exchange rates with emissions updated to reflect changes in reporting
methodology and emissions factors
Energy and CO2 emissions
Solar panels and demand side response for Bad Hersfeld
As part of the expansion of our Bad Hersfeld distribution centre in
Germany, we have installed a major solar energy system on the roof of
the new 9,000 m² building, which is due for completion in 2021. The 750
kW capacity photovoltaic solar panels convert solar radiation directly
into electricity, providing energy to the RS site and feeding surplus
power into the grid.
Net-ZeroLong-term aim
Environment
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Waste and recyclingCurrent progress
33% reduction in waste
intensity since 2015*
79% of our waste is
recycled with many key
sites sending no waste to
landfill
Future focus
Reduce waste, increase
recycling and
packaging re-use and
limit single-use plastic.
Zero waste to landfill at
sites where it is possible
Packaging, waste and recycling
Automated packaging machines We’ve introduced automated packaging systems at our DCs in
Nuneaton, UK and in the Americas and Germany (due online in 2021).
We’re optimising packaging size and weight, introducing sustainable
materials and increasing use of recyclable packaging.
Packaging Current progress
15% reduction in packaging
intensity since 2015*
3 DCs using automated
packaging machines
Optimising packaging
weight and volume
Packaging made from
recycled materials in UK
Future focus
Optimise packaging size and
weight for each product /
order
100% recycled packaging for
all products sold
Implement automated
packaging machines
globally
Environment
* At constant exchange rates with reports updated to reflect changes in reporting methodology. Waste reports for one major site updated to use supplier data
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Environment
Current progress
Certified Emissions Management and Reduction Scheme (CEMARS) Greenhouse Gas Data Verification standard, ISO 14064-1 UK holders
11 of our 12 global DCs (either owned or leased) have environmental management systems in place - four certified to ISO 14001
39 further sites, including the RS Local trade counters, are certified to ISO 14001 or have internal environmental management systems
By revenue, over 52% of our operations are covered by ISO 14001
Future focus
Further extend coverage of ISO 14001 across Electrocomponents operations
Environmental management system for Hong Kong DC
Environmental management systems
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Our focus Work with our suppliers to improve the sustainability of our value chain and deliver innovative and sustainable solutions for our customers
2025 target Grow our customer net promoter score (NPS) to 70. Further ESG targets in development
RS Monition helps reduce customers’ energy losses, carbon emissions and costs
RS Monition’s energy loss survey combines thermography and
ultrasonic air-leak technologies to identify and quantify energy
losses in customer operations. Combined with onsite repair, it
reduces costs, wasted energy and carbon emissions.
We’re working with GSK to conduct energy loss audits at over 55
of its sites in 25 countries, which has reduced emissions and costs.
CustomersCurrent progress
Expanding sustainable product range e.g. RS Monition (IoT, energy, carbon
& water testing equipment), variable speed drives, high-efficiency motors,
low-energy lighting and leading automation solutions
Improving sustainability attributes of products, external accreditations and
profiling to customers – RS PRO key focus
Future focus
Expand sustainable product range and profile online, through innovation
labs in our DCs and DesignSpark
Rollout smart factory solutions through RS Monition and IESA
Work with suppliers to improve product sustainability attributes,
certifications and profiling to customers
Customers and suppliers
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Customers and suppliers
SuppliersCurrent progress
Expanding DCs in US and Germany to support local sourcing,
delivery and storage closer to customers, reducing delivery miles
and environmental impacts whilst also improving resiliency
Transport and logistics optimisation – e.g. migrating air to sea and
road freight
Ongoing work with our suppliers to meet the highest ethical and
legal standards and continuously improve. We take a risk based
approach to auditing supplier performance in the areas of human
rights, corruption, legal compliance and product standards.
Future focus
Collaborate with suppliers to improve end to end sustainability of
value chain – sourcing, production, sustainability certification,
transport & logistics, packaging & waste
Longer term Net-Zero aim across the whole value chain
Collaborate with suppliers to develop and showcase sustainable
products, services and solutions to customers using our DCs as
innovation labs
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People and health & safety
Our focus Build a safe, inclusive and dynamic culture which enables our people to bring their true self to work and thrive
Our 2025 targets• Increase our female leader population 2% year on year from a
baseline of 26% in 2019• 30% reduction in All Accident rate* • Uplift our employee engagement score to 77
12*from a 2018 baseline
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People and health & safety
Current progress
Executive sponsored D&I strategy focusing on wellbeing, gender, race
and LGBTQ+
Four inclusion networks – race, gender, LGBTQ+ and wellbeing which
align to the global D&I strategy. Each host inclusion & wellbeing events, campaigns and training throughout the year
Engagement score increased to 72 in 2020
Building future skills: apprenticeship programme, Future Shapers talent
development programme, Learning Academies in digital and data
All Accident rate at 0.69 / 200k hours – down 22% in year
Future focus
Continued focus on inclusion, wellbeing and mental and physical
health emerging from COVID-19
Train 300 leaders in mental health awareness
Set long-term gender and racial diversity ambitions
Continued focus on safety and avoiding near-miss accidents
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Our focus Enable education and innovation that improves lives and inspires future engineers.
Our 2025 targetsTargets in development covering global charity partnership, volunteering and education programme
Current progress
Global partnership with Engineers Without Borders - 7k students
involved in engineering design challenges that address key global
issues aligned to the UN SDGs
Our mobile innovation centres, Titan II & MAX, showcase the latest
engineering technologies and inspire future engineers. They travel
around Europe each welcoming around 30k visitors from schools,
customers and suppliers (on pause during COVID-19 pandemic)
STEM educational resources and skills training from primary to university,
including lesson plans, EdTech products, employability skills and home
projects during COVID-19
Awards, events & competitions – RS STEMFEST; Sponsorship of young
engineer competitions in Germany & UK (BrightSparks); Maker Fairies
events
Empowering young female engineering talent through STEM initiatives
such as Girls Go Tech in Hong Kong to sponsorship of the IET’s Young
Woman Engineer of the Year
All colleagues have two paid volunteering days – includes 220 RS STEM
Ambassadors
Community
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Future focus
Establish and deliver our global partnerships with Engineers Without
Borders
Continue our STEM and Grass Roots initiatives and educational
solutions (EdTech and OKdo kits) to support, develop and inspire
primary school to higher education students to become future
engineers and technologists
Supporting our markets to increase their involvement and amplify the
reach and impact of our STEM and Grass Roots programmes globally
Community
Titan II & MAX trucks – inspiring innovation, education and future engineers
Our two mobile innovation centres feature the latest
technologies such as our DesignSpark platform, Raspberry Pi,
3D printing, robotics, IoT, thermal imaging – as well as virtual
reality (VR) and augmented reality (AR) technology to bring
innovation to life.
Titan II tours North Europe and MAX Central Europe. Each
year they welcome around 30k visitors aboard from schools
and universities, as well as our customers and suppliers.
They offer interactive experiences demonstrating the latest
technology and inspiring the next generation of STEM talent
to pursue a career in engineering.
Titan and Max are on pause during the COVID-19 pandemic.
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Our ESG approach in action during COVID-19
Keeping critical industries running
Supporting ventilator production Kits for Kids – home education 3D printing of visors for frontline staff
Continuing to deliver a seamless
first class service to our customers
Major focus on our people’s
safety and wellbeing
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Ethics and compliance
Current progress
We have a suite of policies and procedures in place
to maintain the highest ethical standards, covering;
Codes of conduct for employees and suppliers
Supplier ethical trading policy and declarations
Business ethics and human rights
Anti bribery, corruption and competitive
behaviour
Privacy, data and cyber security
Future focus
Policy library and data centre in ESG section of
website
Governance
Current progress
Board and Senior Management Team
oversight of ESG
Global ESG Delivery Group established
Future focus
Establish ESG Leadership Committee
Approach underpinned by strong governance, ethics and compliance
Link to our ethics & compliance policy library
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Frameworks and standards
Our ESG reporting is informed by best practice standards and we perform strongly in external benchmarks:
ESG external benchmarks
CDP Climate Change leadership score of A-
Sustainalytics rating: 8th/13,410 (all companies), 2nd in
sector
MSCI rating: A
EcoVadis Gold rating
FTSE4Good Index score: 3.2/5
ESG benchmarks and standards
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Our ESG approach is delivered across our global network
Our nine brands and 7,000+ people put our purpose and ESG mission into
action globally, having a positive impact across 32 countries
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Our future focus
We are on an exciting journey to evolve and strengthen our ESG approach to continuously improve the value we deliver for our stakeholders. Over the next year we will focus on:
Environment
Advance our actions to run clean and green
business operations and develop our long-
term plan to be net zero
Customers and
suppliers Work with our suppliers to evolve the sustainability
of our whole value chain, and develop innovative
and sustainable products, services and solutions for
our customers
People
Build a diverse, engaged and dynamic team, fully reflective of
the customers and communities we serve,
and continue to develop a culture which enables our people to
thrive
Community
Launch our exciting new global charity partnership which utilises innovative engineering to improve
thousands of lives globally, as well as
enabling education that inspires the next
generation of engineers
Community