Spotlight | Decarbonising For Net Zero

At RS, we believe that driving climate action is not only the right thing to do for society and the environment, but also that supporting the low carbon transition is integral to our long-term commercial success.

The global industrial sector has a major role to play in providing sustainable product and service solutions to enable the world’s engineers, innovators and problem solvers to decarbonise society and low carbon industries to thrive. With our seat at the heart of the industrial supply chain, we are well-placed to support our 1.1 million customers through this transition.

We caught up with Andrea Barrett , our VP of Social Responsibility and Sustainability and Christian Horn , our Chief Product & Supply Chain Officer to discuss what net zero means to RS and what actions we’re taking across our global operations and in our value chain to accelerate climate action and deliver our decarbonisation plans.

What is RS’s net zero ambition and what have we achieved to date?

Andrea: In November 2021, we launched our 2030 ESG action plan – For a Better World, in which we laid out our ambition to be net zero in our direct operations by 2030 and in our wider value chain by 2050. This included setting Science Based Targets covering our Scope 1, 2 and 3 emissions, with a 75% reduction in direct emissions by 2030. By the end of 2022/23, we had reduced our Scope 1 and 2 emissions by 58% since our 2019/20 baseline and the intensity of our product transportation emissions by 28%, so we are making good progress. Our emissions reporting is externally verified by a third party, to provide further assurance of our progress. We have also set supporting targets for packaging, waste and suppliers to drive further environmental performance and climate action.

Christian: Beyond our own business we are committed to supporting our customers and suppliers on their journey to tackling climate change and achieving net zero by 2050. This includes offering an increasing range of sustainable product and service solutions to our customers, as well as committing to engage 67% of our suppliers by spend to set Science Based Targets by 2025. At the end of 2022/23, 25% had done so with the SBTi.

How are we delivering on our operational net zero commitments?

Andrea: Our first objective has been to go after the low-hanging fruit i.e. energy savings initiatives in our distribution centres (DCs) and offices that are relatively low cost and easy to implement. We have had great success across the Group in reducing our energy usage. We have implemented more automation, metering and controls, switched to low-energy lighting, set temperature limits and put in place environmental management dashboards, which have helped our sites to manage their environmental performance locally. Through these actions we have reduced the Group’s energy consumption by 12% and energy intensity by 20% in 2022/23 – so it’s a real success story. We also introduced a Group-wide energy management policy, which mandates the switch to renewable electricity tariffs – another really important action – and 92% of our Group electricity now comes from renewable sources.

Christian: This year we have focused on what we need to do over the next few years to decarbonise our buildings and achieve net zero by 2030. A ￡3.7 million investment has been approved for a net zero decarbonisation programme at our DC in Beauvais, France, which accounts for around 10% of the Group’s overall CO2e consumption. The proposal includes the replacement of gas boilers with air source heat pumps and the installation of solar panels on the roof of the building, as well as increasing automation and controls which will mean the DC is more efficient and provides a better service to customers. Alongside Beauvais, we will also begin work to decarbonise our DC in Nuneaton, UK in 2023/24.

We have already installed solar panels on the roof of our DC in Bad Hersfeld, Germany, which produce around 24% of the sites annual energy needs. We’ve modelled the impact of installing solar panels on the roofs of our five largest sites this year, which has proven to be a really viable option and will form a core part of our decarbonisation strategy.

It is clear from the resources and capital being applied that there is a real commitment across the organisation to achieving our net zero ambitions and creating highly automated, efficient and sustainable sites that will support our long-term growth trajectory.

How is RS driving net zero across the value chain?

Andrea: All businesses need to take action to decarbonise their wider supply chain – no one business can do this alone. We must work together with our partners up and down the value chain to reduce Scope 3 emissions and reach net zero by 2050.

At RS, we have enhanced our Scope 3 emissions reporting this year and had the data for two of our most material Scope 3 emissions categories: purchased goods and services (category 1) and upstream transportation and distribution (category 4) externally assured to provide an additional layer of validation. We have also focused our reduction actions on offering customers more sustainable products, optimising our supply chains to lower product transport emissions and engaging our suppliers to set SBTs. By increasing collaboration and engagement around Scope 3 emissions reductions, we believe that we have a much greater opportunity to drive meaningful change across the entire value chain. We also achieved an A (an improvement from A-) in our CDP supplier engagement score in 2023, demonstrating how we are implementing best practice in leading our suppliers to take climate action.

Christian: We have made great progress this year and I’m delighted that we have responded to our customers’ needs for more sustainable products through the launch of our Better World product range, which recognises products with at least one sustainability improvement that has been verified with a certification or eco-label.

We have also led some excellent engagement with our suppliers on decarbonising our global value chain. In February 2023, over 400 suppliers attended our EMEA supplier conference in Frankfurt, Germany, where we talked about the importance of prioritising ESG and sustainability action, as well as launching our ESG Supplier Handbook.

What challenges do you see ahead?

Andrea: I am confident that we are developing a robust and credible transition plan that will get us to 2030 and beyond but we know that we have a challenging task ahead. This year, we have had lots of opportunities to decarbonise our buildings through energy savings, heating controls and building optimisation, but as we move closer to 2030, we’ll need to embark on bigger retrofit and technology programme that includes installing solar panels and heat pumps. Each time we bring a new business into the Group we will be looking to benchmark their environmental data, establish robust systems and initiate a decarbonisation plan. This can be a real challenge for businesses in regions or countries where renewable energy or decarbonisation of infrastructure is in its infancy.

Looking beyond our sites to product transportation, availability of low carbon logistics technologies will be a key challenge and we will be prioritising partnerships with logistics carriers that are investing for a net zero future.

Christian: Some of our commitments do rely on action from our suppliers and we must be realistic that several of our suppliers are still at the very early stages of their ESG journeys. That is why it is so crucial that we have early engagement with our suppliers and support them as much as possible.

What is unique about RS and our ESG ambitions?

Andrea: With the world facing increasingly complex challenges, businesses can no longer simply rely on the latest technology to stay relevant: we must come together to solve real-world challenges. At RS, we have a deep desire to do the right thing and this stems from the very top of our organisation, from our Board and senior management team (SMT) right through to our 8,700+ employees. We are leading our industry by engaging our supply chain on the importance of climate action. By working with them, we can help our people to succeed, decarbonise our global supply chain and provide sustainable product and service solutions for customers. This is, I believe, our biggest differentiator that will deliver greater long-term value for our stakeholders and make amazing happen for a better world.

Christian: For me, it is about how we are placing ESG at the core of our purpose and strategy. We have a lot of opportunity to improve our end-to-end ways of working across the value chain to build long-lasting capabilities in our people and processes, in order to drive further value for our stakeholders. It will be our ability to deliver great ESG solutions for our customers that will enable us to achieve triple bottom line benefits for people, planet and profit.

Learn more about our 2030 ESG Action Plan - For A Better World - at: https://www.rsgroup.com/sustainability/