Climate change

We recognise that climate change poses both risks and opportunities for our business. We have seen a growing mandate from our stakeholders for meaningful action on climate change and to tackle our greenhouse gas emissions. Recognising this, climate change is included within our “Macroeconomic, political and environmental” principal risk. As society transitions towards a net zero future, we are well positioned to make an increasing contribution to society’s climate objectives through our products and services.

Review of the year

Products & Services

Products & Services

Our low carbon product ranges (LED lighting, EV chargers and smart standby products) help customers to reduce their GHG emissions and transition towards a low-carbon future. We strive to develop more efficient products and better controls to improve energy efficiency.

Supply Chain

One of our strengths is the relationship we have with our suppliers. We recognise that we must work together to make more sustainable choices across product design, material choices and the manufacturing processes.

Research & Development

Our business is well placed to take advantage of the inevitable electrification of energy as we transition towards a low carbon economy. Opportunities for expansion into electric vehicle charging and other low carbon solutions such as smart home tech.

Operations

One of our first priorities is to reduce the emissions from our operations. By implementing efficiency improvements, we can reduce energy use, raw material use, waste and water use to limit our GHG emissions.

Achievements during 2023

  • £80m revenue generated from low carbon product categories, delivering significant progress against our low carbon product revenue target for 2025
  • Launch of three-phase high power EV charger in July for larger homes and commercial premises
  • DW Windsor awarded the “Sustainability Project of the Year” by the Highway Electrical Association (“HEA”) for the Wandsworth Bridge Project (page 26)
  • LED Lighting Projects revenue growth of 24% compared to last year
  • Working with one of our key customers and their Manufacture 2030 programme to reduce our GHG emissions
  • Transformation and integration of DW Windsor into Luceco Group model utilising China in-house manufacturing and 100% renewable electricity
  • Began working with suppliers in China to develop Environmental Product Declarations (“EPDs”) for two LED products
  • Specialist R&D functions in China and the UK employing 112 specialists with an expenditure of £4.1m in 2023 (£3.6m in 2022)
  • Development focus on residential and commercial EV charging solutions
  • DW Windsor launched a range of innovative solar- powered lighting solutions designed to support a variety of off-grid lighting applications ready for sale in 2024
  • Continued development of enhanced product information for lighting products across TM65, TM66 and EPDs in line with industry best practice
  • Sourced 100% renewable electricity for all Group operations in 2023, for the second consecutive year
  • Offsetting residual Scope 1 emissions for 2023
  • Investment into energy efficiency and automation projects within the China manufacturing facility
  • Investment in a new Euro 6 truck to improve the fuel efficiency of our Kingfisher delivery fleet
  • Continued focus on packaging and transitioning from plastic to cardboard
Products & Services

Products & Services

Our low carbon product ranges (LED lighting, EV chargers and smart standby products) help customers to reduce their GHG emissions and transition towards a low-carbon future. We strive to develop more efficient products and better controls to improve energy efficiency.

Achievements during 2023

  • £80m revenue generated from low carbon product categories, delivering significant progress against our low carbon product revenue target for 2025
  • Launch of three-phase high power EV charger in July for larger homes and commercial premises
  • DW Windsor awarded the “Sustainability Project of the Year” by the Highway Electrical Association (“HEA”) for the Wandsworth Bridge Project (page 26)
  • LED Lighting Projects revenue growth of 24% compared to last year

Supply Chain

One of our strengths is the relationship we have with our suppliers. We recognise that we must work together to make more sustainable choices across product design, material choices and the manufacturing processes.

Achievements during 2023

  • Working with one of our key customers and their Manufacture 2030 programme to reduce our GHG emissions
  • Transformation and integration of DW Windsor into Luceco Group model utilising China in-house manufacturing and 100% renewable electricity
  • Began working with suppliers in China to develop Environmental Product Declarations (“EPDs”) for two LED products

Research & Development

Our business is well placed to take advantage of the inevitable electrification of energy as we transition towards a low carbon economy. Opportunities for expansion into electric vehicle charging and other low carbon solutions such as smart home tech.

Achievements during 2023

  • Specialist R&D functions in China and the UK employing 112 specialists with an expenditure of £4.1m in 2023 (£3.6m in 2022)
  • Development focus on residential and commercial EV charging solutions
  • DW Windsor launched a range of innovative solar- powered lighting solutions designed to support a variety of off-grid lighting applications ready for sale in 2024
  • Continued development of enhanced product information for lighting products across TM65, TM66 and EPDs in line with industry best practice

Operations

One of our first priorities is to reduce the emissions from our operations. By implementing efficiency improvements, we can reduce energy use, raw material use, waste and water use to limit our GHG emissions.

Achievements during 2023

  • Sourced 100% renewable electricity for all Group operations in 2023, for the second consecutive year
  • Offsetting residual Scope 1 emissions for 2023
  • Investment into energy efficiency and automation projects within the China manufacturing facility
  • Investment in a new Euro 6 truck to improve the fuel efficiency of our Kingfisher delivery fleet
  • Continued focus on packaging and transitioning from plastic to cardboard

Targets and commitments

Luceco plc commits to reduce absolute Scope 3 GHG emissions from the use of sold products by 27.5% by 2031 from a 2021 base year.

Luceco plc commits to generating £100m revenue from low carbon product sales by 2025 from a 2021 base year.

Luceco plc commits to reduce absolute Scope 1 and Scope 2 GHG emissions by 46.2% by 2031 from a 2021 base year.

Sustainability Project of the Year

DW Windsor won the “Sustainability Project of the Year” award presented by the Highway Electrical Association (“HEA”). The award was presented in recognition of our role in the refurbishment of Wandsworth Bridge in London, conducted in partnership with VolkerLaser and Richmond and Wandsworth Councils.

Our role in the project was the challenging restoration of the heritage lanterns and columns to their original condition. Our aim was to retain as many of the original lanterns and columns as possible, while replacing or repairing elements that are no longer fit for purpose. We were able to restore around 95% of the original elements with only minor repairs required.

The lighting element was upgraded to energy-efficient LEDs to achieve energy savings of approximately 65%. The quality of the illumination was a consideration to ensure pedestrian and road safety with a minimum road lighting standard of ME3. The lighting also needed to minimise light spill onto the river and surrounding areas to avoid disrupting both people and nocturnal animals.

This project demonstrates our commitment to sustainability and how we can embrace the principles of the circular economy. Through refurbishment, we can keep existing lighting equipment in use for longer, reducing raw material use and landfill waste, as well as helping to lower carbon emissions.

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Metrics and targets

Scope 1+2 target (tCO2e)

Scope 3 target (tCO2e)

Low carbon product revenue £m

Sustainability objectives:

Our progress against our sustainability objectives for 2023 are outlined below, along with our next steps for 2024.

Engage with key customers to better understand their climate ambitions and to communicate our strategy.

We are continuing to proactively engage with our customers who are committed to reducing their climate impact, most notably among our Retail and Hybrid customers with science-based targets or net zero commitments. In collaboration with a key Retail customer, efforts are underway through the Manufacture 2030 programme to reduce our greenhouse gas emissions and enhance product sustainability. Furthermore, the demand for insights into our carbon management strategies has started to gather momentum with some of our professional wholesalers.

In the Professional Projects sector, sustainability criteria are increasingly integral to the lighting project specifications and the tendering process, with rising requests for detailed data on product carbon footprint and circularity via TM65 and TM66 calculations. In response, we have completed TM65 and TM66 assessments for specific product lines and the more detailed Environmental Product Declarations (“EPDs”) are being developed as we anticipate demand for these more detailed assessments could increase.

Undertake detailed energy audits of UK operations as part of the Energy Savings Opportunity Scheme (“ESOS”).

We are on track to deliver ESOS compliance and undertake detailed energy audits in line with the extended deadline of 5 June 2024 (previously 5 December 2023). The scheme administrators, the Environment Agency, have moved to strengthen the requirements of ESOS, including the development of an implementation plan following the completion of the current phase. We will use the energy-saving recommendations from the audits to help deliver progress against our Scope 1 and 2 target.

Develop a research and development roadmap over the short, medium and long term that will help us deliver our Scope 3 science-based target.

We will continue to drive innovation to meet customer needs, designing more efficient and functional products. These efforts will play an important role in delivering our Scope 3 science-based target. Over the short and medium term, we will continue to focus on improving the efficiency of our LED lighting products and reducing the standby power and losses of EV chargers, wiring accessories and cable reels. The integration or pairing of our products with greater controls and smart functionality can reduce the amount of time our products are in use, helping to cut both costs and emissions. Over the long term, our attention will turn towards integrating a higher degree of circularity into our products, to ultimately lower the embodied emissions.

Begin work to develop a set of product design criteria that help to improve the sustainability of our products.

As part of our drive to enhancing the sustainability of our products we are initially focusing on LED lighting, as this is where we are seeing the most interest from our customers. The first step towards improving the sustainability of our products is to understand the embodied carbon within. We are increasing our use of TM65 calculations to provide customers, particularly from the Professional Projects segment, with an understanding of the embodied carbon within our internal LED lighting product ranges. This helps our customers make more informed choices as they have a better understanding of the whole-life carbon impact of our products, and we can use this information to make more informed choices within product development. We are also working to develop EPDs, which are a more detailed form of TM65 calculation, for two internal LED lighting products to develop our capabilities in this area.

Across external lighting products, the focus from customers has been on the circularity of products and the use of the TM66 Circular Economy Assessment Method which assesses circularity across product design, manufacturing, materials and service delivery. This assessment provides the depth of detail required to create products that are aligned with a circular economy and the TM66 methodology forms part of our design brief.

Next steps

The actions that we have taken to embed the TCFD recommendations within our business have helped build climate resilience into our business strategy. We will continue our efforts to develop our approach as regulatory requirements evolve and the challenges of climate change become more pronounced. As we look towards 2024, we have set the following sustainability objectives:

  • Begin the process of aligning our annual reporting with the new IFRS S2 Climate‑related Disclosures Standard and the development of a detailed transition plan to meet our targets
  • Start the development of a detailed transition plan to meet our science-based targets
  • Seek third-party independent verification of our Scope 1 and 2 emissions and work towards more accurate calculations for Scope 3 categories such as purchased goods and services, and transportation and distribution
  • Development of TM65 lifecycle carbon footprint assessments for all new Luceco project luminaries by the end of 2024

Product innovations to reduce GHG emissions

  • Launched second generation 7kW and new higher-powered 22kW EV charger.
  • High-specification LED luminaire designed for “Super Shed” distribution centres. Optimised for high level and racking applications, reducing the overall number of luminaires required to deliver a comparable lighting level.
  • High-performance, energy efficient and lightweight floodlight delivering 120lm/w with integrated motion sensor.
  • Solar-powered lighting solutions designed to support a variety of off-grid external lighting applications.
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