Carbon Footprinting Impacts in your Supply Chain

byDavid Morrell BSc MCIHT

Group Head of Sustainability

our business

Me

David Morrell is Group Head of Sustainability at Marshalls plc, a role that also includes the management of the Group Intellectual Property. After studying Civil and Structural Engineering he specialised in Highways and Transportation. After a period of working in the Highway department and Structural department of two Local Authorities he joined Marshalls. At Marshalls he has developed his career from Technical Support, Management Systems, Product Management, career from Technical Support, Management Systems, Product Management, New Product Development and took up his current post in 2008. David has written papers on the design of Sustainable Urban Drainage Pavements and sits on the British Standard Committee for Hard Landscaping Products and has twice been Chair of the technical committee of the industry council. David is the past chair of the Ethical Trading Initiative (ETI) Stone Working Group focusing on the delivery of better conditions for vulnerable worker in our supply chain. David represents the Company’s shareholding interests in an International Product Design House based in Germany. Outside of work David can be found on the moors walking his dogs, in the kitchen finessing his cooking skills or burning fuel on the race tracks of Europe.

Evidence ...!

Our Challenge

Our Challenge

• Marshalls – Who we are and what we do?– Sustainability Agenda– Philosophy of “Halt the Green Wash”

• Footprinting– Why, external and internal drivers– Business case– Detail at our Carbon Footprinting

Our Business ~ Overview

• Founded in 1885 by Solomon Marshall

• Public Limited Company

• Member of FTSE4Good

• £359m turnover Y2014 (17%)• £359m turnover Y2014 (17%)

• EBITDA of £38.5m Y2014 (28%)

• Profit before tax £22.4 Y2014 (72%)

• 2,055employees

• Head Offices in West Yorkshire

Data source: Marshalls plc Annual Report 2013Trading update march 2015

Group of Specialist Businesses

43 Operational sites, including 29 Quarries in Britain1 Sourcing / Export office in China 2 Operational sites in Europe

6 Brands and a Business Superbrand

Regionally locatedRegionally locatedtriangulating the UKFalkirk – Sittingbourne – Bleadon

Supplying concrete and natural stone paving and walling for commercial & domestic use togetherwith street furniture & drainage products

Data source: Marshalls plc Annual Report 2013

Business Aspects and Impact

Aspects and Impacts

Cement &

cementitious materials

Aggregate

Cor

pora

te Im

pactProduct Impact

Aggregate

Water

Additives&

Admixtures

Merchant Site

Cor

pora

te Im

pact

Energy

Supply Chain

Demand Chain

installation

maintenancePackaging

demolition

Overview

Customers / Markets

Investors

Government / Stakeholders

LegalLegal

Protect

EnhanceProduct Proposition

Certified Product Declaration

Compliance & Reporting

Balancing the agenda

Overview ~ state of the world

Public opinion

“I am concerned about what I can do personally to protect the environment”

% who agree or agree strongly, by gender, age and social grade

Source: nVision ResearchBase: 1,000 face-to-face respondents aged 16+, GB

Government Strategy

Carbon Agenda

Sustainability Agenda

Marshalls Business Model

Thinking

“Marshalls’ regards Corporate Responsibility as a journey in the course of which it aims to align its business values, purpose and strategy with the social, environmental and economic needs of our stakeholders, ng

Passion

Action

environmental and economic needs of our stakeholders, whilst embedding sustainable and ethical business policies and practices in everything we do.”

Sustainable Business Model

Management Systems

Greenwash

Innovation

Product Innovation Permeable Paving

Water ~ infrastructure

Water“… reduce water from mains and licensed

borehole to 0.05m3/t by 2015 …”

0.08780.0856

wat

er u

sed

per

prod

uctio

n to

nne

Main & licensed water used per tonne of production output

0.0587

0.053 0.053

0.067

0.055

0.063

0.052

0.043 0.041

0.048

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

m3

wat

er u

sed

per

prod

uctio

n to

nne

Waste“… reduce by 3% per annum …”

3.72%

3.07%

2.58%

site

(to

nnes

) as

% o

f pro

duct

ion

outp

ut

Waste taken off-site as a percentage of total produ ction output

2.58%

2.23%

1.97%

2.18%

2.35%

1.49%

1.65%

1.45%

1.78%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Was

te ta

ken

off-

site

(to

nnes

) as

% o

f pro

duct

ion

outp

ut

Ethics

Health and well being

Responsible Sourcing ~ BES6001

Responsible Sourcing ~ BES6001

Transparencywww.marshalls.co.uk/sustainability

Summary

Customer you can be confident that in selecting Marshalls Products and Services:-

Providing products in a responsible mannerDelivering customer service value availability / delivery / invoicingManagement Systems 9001 / 14001 / 18001 / PAS99Understand and manage our ‘up-stream’ supply chainUnderstand and manage our ‘up-stream’ supply chainImplementing Resource Efficiency

Using less: fossil fuel / water / waste / virgin mineralVisible Felt Leadership approach to reducing Health & SafetyInvestment in training for employees inc Investors in PeopleSourcing ethicallyIndependent audit from the likes of BRE / Achilles / Carbon Trust

IMAGINE BETTER

Energy and CarbonEnergy and Carbon

Energy & Carbon ~ Drivers

Energy Prices 2006-2011

4

6

8

10

12

Energy price increases (2006-2011):• Electricity price increase +35%• Natural gas price increase +22%• Diesel price increase +44%• Gas oil price increase +76%• LPG price increase +79%

0

2

Jan-

06Fe

b-06

Mar

-06

Apr-0

6M

ay-0

6Ju

n-06

Jul-0

6Au

g-06

Sep-

06O

ct-0

6N

ov-0

6De

c-06

Jan-

07Fe

b-07

Mar

-07

Apr-0

7M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

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ct-0

7N

ov-0

7De

c-07

Jan-

08Fe

b-08

Mar

-08

Apr-0

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ay-0

8Ju

n-08

Jul-0

8Au

g-08

Sep-

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ct-0

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c-08

Jan-

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b-09

Mar

-09

Apr-0

9M

ay-0

9Ju

n-09

Jul-0

9Au

g-09

Sep-

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ct-0

9N

ov-0

9De

c-09

Jan-

10Fe

b-10

Mar

-10

Apr-1

0M

ay-1

0Ju

n-10

Jul-1

0Au

g-10

Sep-

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ct-1

0N

ov-1

0De

c-10

Jan-

11Fe

b-11

Mar

-11

Apr-1

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ay-1

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Sep-

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ct-1

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c-11

20% renewables by 202034% reduction in carbon emissions by 202050% reduction in carbon emissions by 202580% reduction in carbon emissions by 2050

Energy & Carbon ~ Targets

Energy & Carbon ~ CO2 impact by fuel

Diesel Electricity Gas Oil LPG Natural Gas Petrol

Energy & Carbon ~ Plan

Monitor measure Measure to reduce &Identify future savings

5-10%

Energy Efficiency Maximise energy into product

20-30%

Do things differently 20-30%

= 70%!!!

Use less

Production innovation Do things differently to reduce emissions

20-30%

Zero growth

Unsustainable Business model

Renewable energy production

Produce sustainable

energy

Sustainable Business model

= ?%

Produce energy

Structure

Management Team ~ multi-disciplined, which drives the vision, strategy and policy

Project Groups ~ deliver on specific issuesFinanceBest PracticeBest PracticeMobile plantCultureInformation systemsRenewablesCommunication

Energy Champions / Coordinators ~ support activity at site level against agreed energy action plans

Engagement

25.6

21.3 20.518.7

16.2

14.0 16.850.0

60.0

70.0

80.0

k C

O2

e T

on

ne

s

Absolute CO2e emission from UK operation

Energy & Carbon“… to reduce absolute CO2e in line with UK Government (34% by 2020 and 80% by 2050

…)”

25.423.4 23.1

24.322.1

19.9

16.0

22.122.3 22.6 21.0

21.4

20.1

20.2

0.0

10.0

20.0

30.0

40.0

2008 2009 2010 2011 2012 2013 2014

k C

O2

e T

on

ne

s

Scope 1 non transport Scope 1 transport Scope 2

Carbon FootprintingCarbon Footprinting

Carbon Footprinting

“What”“Why”“How”

“When”“When”“Who”

And for completeness “Where”

Carbon Footprinting ~ What & Why?

Phase 1Phase 2

Scope / Values / Collateral / Understand impact / B RE Green Guide / EPDs / datasets / competitive advanta ge /

Sales Collateral

Carbon Footprinting ~ How, When & Who?Carbon Footprinting ~ How, When & Who?

Phase 1 Phase 2

Initial Assessment / ERP / SKU / Families / Product ion v Accountants / Modelling / Internal v External

Carbon Footprinting ~ Impacts

Carbon Footprinting ~ summary

• Early adopter• User rather than a practitioner• Standard• Verified data• Verified data• All rather than some• Business rather than product• Data ~ ERP / supply chain• Communicate

Foot-printing In Details

Driving Lower Impact Products

“Collectively we can make a difference ...”

Thank you

David MorrellGroup Head of Sustainability

Marshalls plcdavid.morrell@marshalls.co.uk