Wolseley Annual Report 2009
Environment
We will run efficient operations that minimise waste and reduce our contribution to climate change. We will promote sustainable development.
The Group has a responsibility to manage the impact of its operations on the environment so that any harm is minimised and positive contribution is maximised. Opportunities to reduce our carbon impact, our use of natural resources and to reduce waste and recycle more materials exist in all our operations and at every stage of our products’ life cycle, from the sourcing of materials through their transportation and to their ultimate use and disposal. The increasing cost of energy, water consumption and the disposal of waste add a clear commercial imperative for measuring and understanding our performance in these areas. More information on each of these issues can be found in the sections below.
A priority for the second year of our CR programme will be to identify the best improvement opportunities for each of our businesses. In Wolseley UK, this will be part of our coordinated response to the requirements of the CRC. This process will contribute to the development of a set of Group-wide sustainability objectives to improve our environmental performance and operational efficiency.
In certain markets, there is increasing demand for sustainable products. To remain competitive, it is important that we understand our customers’ needs and are responsive to change as the industry, markets and legislation develop. Wolseley UK’s Sustainable Building Center, located next to its headquarters in Leamington Spa, was opened in 2008. In its first year, it has attracted interest from existing and new customers such as architects, homebuilders, property developers and facilities managers and has provided an innovative means of showcasing the variety and quality of Wolseley’s sustainable product offering (see www. wolseleysbc.co.uk for more information). A similar facility operates at Wasco in the Netherlands. Brossette in France has also introduced “Cap Energie”, this year, a project which includes, among other things, an initiative to further develop our renewables product capabilities. More information can be found in the Cap Energie case study.
Environmental performance
This is the third year in which the Group has reported on its environmental performance. The Group has developed an improved data collection tool this year to evaluate the data reported in the sections below. These enhancements have helped us to understand the accuracy and completeness of the data collected by our businesses and will be used to improve our data analysis and reporting in next year’s report. This year’s data has been reviewed for completeness and quality and analysed by an independent third party.
With the geographically dispersed and decentralised nature of our operations, although the integrity of data gathered has improved significantly, complete and reliable data in all categories has been difficult to obtain from all locations. The scale of the Group’s operations has changed significantly over the past year as a result of the global economic environment and the consequential effect on our businesses’ markets. In addition, the Company sold Stock Building Supply in May 2009, retaining a minority shareholding in a joint venture with The Gores Group (please see Discontinued operations for more detail); environmental data relating to that business is not included in this report. These events have had a commensurate effect on the Group’s environmental impact.
For these reasons, including the overall improvement in the quality of data produced since last year, it is not useful to provide a direct comparison with the Group’s environmental performance in previous years, nor does it provide a useful indication of future trends. However, our historical reported environmental performance can be found online at www.wolseley.com/corporate-responsibility.aspx. We expect to improve the scope and integrity of the data that we collect to present a basis for year-on-year comparisons in future reports.
Greenhouse gas emissions
The vast majority of the Group’s greenhouse gas emissions derive from electricity use at our facilities (46 per cent) and the transportation of our goods (29 per cent). In addition to the increasing costs associated with energy consumption, our markets are likely to experience increasing legislative measures in the future aimed at reducing the climate change impact from commercial operations. To help us to reduce our emissions, our businesses have developed various measures, including environmental management systems, resource efficiency plans, fleet management systems and fleet backhauling programmes. More information on these activities can be found online at www.wolseley.com/corporate-responsibility.aspx.
Emissions of greenhouse gases have been reported in accordance with the Greenhouse Gas Protocol (“GHG Protocol”), which was developed jointly by the World Business Council for Sustainable Development and the World Resources Institute. The standard differentiates between emissions for which businesses are directly responsible (“Scope 1 emissions”) and indirect emissions from the generation of supplied electricity and supplied heat (eg district heating) (“Scope 2 emissions”). Certain other indirect emissions (“Scope 3 emissions”) do not form part of the core carbon footprint as defined by the GHG Protocol. However, given the nature of our operations and the degree of control we exercise over certain activities, we do believe that it is appropriate to report on the emissions from third-party provided transportation as well as from our employees’ business travel. These Scope 3 emissions, together with our Scope 1 and Scope 2 emissions, are included in the data reported below.
| Source | FY 2009 Emissions (tCO2e)1 |
|---|---|
| Electricity use | 393,930 |
| Fuel use: operations | 118,2702 |
| Fuel use: transportation of goods | 246,518 |
| Business travel: vehicles | 87,647 |
| Business travel: air and rail | 8,189 |
| Refrigerant leakage | 1,594 |
| Total3 | 856,148 |
| Emissions per £m of revenue | 59.3 |
1 Greenhouse gas emissions are reported as tonnes of CO2 equivalent (abbreviated as tCO2e), based on the Global Warming Potential (“GWP”) of each of the “basket of six” greenhouse gases, as defined by the Kyoto Protocol. The GWP of CO2 is 1 (1 tonne CO2 = 1 tonne CO2e). For other greenhouse gases in the “basket of six”, including refrigerants, the GWP is relative to CO2 over a 100-year time horizon (eg one tonne of the refrigerant R407C is equivalent to 1,526 tonnes of CO2 in terms of the potential climate change impact).
2 Includes supplied heat (district heating).
3 Based on a combination of actual and estimated data.
During the coming year, we will further evaluate the activities that contribute to our greenhouse gas emissions, with a view to reducing those emissions. In next year’s report, we will publish targets for the reduction of our emissions in future years.
Waste management
The Group’s businesses generate non-hazardous waste and, to a lesser extent, hazardous waste. Although definitions vary from country-to-country, hazardous waste may include items such as batteries and electronic equipment; non-hazardous waste typically includes materials such as paper, plastic and metal.
Wolseley aims to measure and minimise the waste generated by its business activities. As well as reducing our environmental impact, reducing the waste we produce in our operations also has the beneficial effect of lowering waste removal costs. Our Group waste performance can be seen in the table below.
| Final waste destination | FY 2009 Hazardous waste (tonnes) | FY 2009 Non- hazardous waste (tonnes) |
|---|---|---|
| Incinerated | 1,283 | 6,599 |
| Landfilled | 250 | 85,003 |
| Recycled | 77 | 22,617 |
| Total1 | 1,610 | 114,219 |
| Waste per £m of revenue | 0.1 | 7.9 |
1 Based on a combination of actual and estimated data.
An example of how one Wolseley business is addressing waste management is described in the case study War on waste.
Water use
We have continued to measure water consumption throughout the Group during the year to enable the appropriate goals to be set for greater water efficiency. The majority of our water consumption derives from normal operational and sanitary water use. The Group’s water is almost exclusively supplied by local utility providers.
| FY 2009 (cubic metres) |
|
|---|---|
| Total water consumption1 |
984,102 |
| Average water consumption per employee |
19.4 |
1 Based on a combination of actual and estimated data.
Cap Energie
The Cap Energie project is transforming Brossette, ensuring that the business is able to seize the huge opportunities presented by the shift towards new energy sources for heating.
The French marketplace for heating products is changing, driven by shifting consumer demands and financial incentives from the French government. Analysts are now forecasting that more than 80 per cent of heating systems sold in five years’ time will be powered by new energy sources.
Following a review of this new business environment, Brossette has implemented a wide-ranging project known as Cap Energie, which translates roughly as “moving forward with energy”.
The main purpose of Cap Energie is to reinforce Brossette’s position as one of the key suppliers in the wholesale heating sector while also increasing its profitability. Brossette has traditionally been focused on oil and gas heating. The Cap Energie project aims to move the business rapidly to satisfy new demands; primarily for ground source heat pumps, which make use of renewable energy stored in the ground to provide one of the most energy-efficient ways of heating buildings. Brossette is also concentrating more on solar energy products and other alternatives that are not based on fossil fuels.
There are ten projects in all, five focusing on sales and five on support activities, all to be phased in over a three-year period. Four members of the Brossette management committee are part of a team of ten managers responsible for leading the project. To date, over 300 employees have been trained to provide the specialised knowledge and service needed to ensure that our customers are able to benefit fully from this new offering. Construction of a new training facility in Lyon has been completed and will open in the near future. Four new-format point of sale facilities are already open and a new showroom concept has been developed to showcase Cap Energie products.
Back office operations have also been improved to support these changes. A new distribution centre opened in the east of France at the end of January 2009 and IT systems improvements are currently being evaluated.
War on waste
Wolseley UK is making huge progress in its efforts to minimise its impact on the environment and its waste management programme makes a valuable contribution. The Company has increased its recycling levels by 10 per cent in the past year and now recycles 50 per cent of its waste. Recycling levels at Wolseley UK three years ago were approximately 5 per cent.
The Company carries out a waste analysis periodically, to gain a better understanding of the waste management practices on Wolseley sites. Initial analysis showed that many of the Company’s waste bins were being collected when not completely full. Waste disposal by contractors is charged on a per collection basis, rather than by weight of waste collected; by rationalising its waste services, Wolseley UK reduced scheduled collections by waste contractors by approximately 50 per cent, thereby reducing its waste collection charges. A more recent analysis has demonstrated opportunities to further reduce waste disposal volumes and costs.
The waste analysis also revealed that much of Wolseley UK’s waste was made up of recyclable material. The Company has introduced a backhauling programme whereby its branches return their clear plastic, cardboard and wood pallets back to Wolseley UK distribution centres, utilising free space on its commercial fleet once branch deliveries have been off-loaded.
Plastic and cardboard waste, although lightweight, is bulky and takes up space in branch waste bins. Reducing waste in this way allows for more efficient use of the waste bins, increases recycling rates and reduces the frequency of collections required by waste contractors. Where branches are not serviced by a distribution centre, they can backhaul recyclable material via a neighbouring branch, or on-site recycling services are installed.
At Wolseley UK’s head office, waste bills have been reduced as a result of a new recycling scheme, raising awareness of the types of material that can be recycled and improving access to recycling bins. Waste costs have dropped from £30,000 per annum in 2007 to £6,000 in 2009. Recycling levels at the head office have risen from approximately 10 per cent in 2006 to around 80 per cent this year. The target is to achieve zero waste to landfill from the site. Four worm farms have been constructed at the head office to reduce the volume of waste food at the site. The worms transform waste food into fertiliser and rich soil that will be used to improve green spaces around the building.
