Electrocomponents plc, a global, multi-channel products and services supplier and parent of Allied Electronics & Automation, launched Nov. 4 its "For a better world" environmental, social and governance (ESG) action plan to support a more sustainable and inclusive world by 2030. The ESG action plan is integrated into the company’s Destination 2025 strategy, supporting its vision to be the first choice for stakeholders by creating profitable growth, and reflecting its ambition to lead the global industrial sector as a truly responsible, sustainable and inclusive business.
The plan has four main goals:
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Advance sustainability by developing sustainable operations and products and services that reduce environmental impacts and tackle climate change. Electrocomponents has committed to reach net-zero greenhouse gas emissions across its global operations by 2030 and across its wider value chain by 2050. It's also set science-based Scope 1, 2 and 3 emissions targets, and has committed to the Science Based Target initiative (SBTi).
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Champion education and innovation by building skills and fostering innovative solutions with 1.5 million young engineers and innovators. This includes engaging the company’s DesignSpark community to support the development of sustainable solutions that improve lives.
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Empower Electrocomponents' employees by enabling them to reach their full potential, and thrive in a safe, inclusive and dynamic culture. This includes working towards 40% of the company’s leaders being women and 25% being ethnically diverse.
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Do business responsibly by ensuring the highest ethical and environmental standards throughout the company's business and global value chain by introducing ESG objectives to be embedded in employee rewards, supplier objectives and a new sustainability-linked loan.
“Electrocomponents has been on a journey to establish and strengthen our ESG approach for a sustainable future. Today, we're proud to take the next steps and launch our 2030 ESG action plan: For a better world," says Lindsley Ruth, CEO of Electrocomponents. "This is an integral part of our Destination 2025 strategy and beyond, and we see the opportunity to leverage our global scale, product and service solutions and differentiated offer to grow stronger, advance sustainability and improve lives. We believe that having a strong ESG action plan is critical for us to become a truly great company.”
Built on a strong ESG foundation
Electrocomponents reports the goals in 2030 ESG action plan build on the progress it's already made. So far, the company's key achievements far include:
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Carbon, with a 62% cut in CO2 emissions from premises' energy use since 2014-15;
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Energy, with 67% of electricity used in 2020-21 coming from renewable sources;
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Waste, with 76% of it recycled in 2020-21; and
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Gender diversity, due to 44% female board members, including the chair.
These achievements were recognized externally as shown by high ESG ratings, including:
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Carbon Diclosure Project (CDP) 2020 score: A- leadership category
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EcoVadis rating: Gold
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Morgan Stanley Capital International (MSCI) rating: A
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Sustainalytics rankings: negligible risk (6.2), 10/13, 494 (all companies), 3/540 (sector)
Goals, governance and actions
To achieve its ESG goals, Electrocomponents has established an ESG leadership committee that consists of Ruth, four senior management team members, and the firm's VP of social responsibility and sustainability, Andrea Barrett. The company's board and senior management have full oversight of Electrocomponents' ESG approach and performance.
To achieve of each of its four primary ESD goals, Electrocomponents has identified specific 15 actions that it plans to accomplish by 2029-30 compared to a 2019-20 baseline.
Advance sustainability by developing sustainable operations, products and services to reduce environmental impacts and tackle climate change, and work with suppliers and customers towards a net-zero value chain by 2050:
- Be net-zero with a science-based target to reduce absolute emissions from operations by 75%;
- Make packaging more sustainable by reducing intensity by 30%, with 100% of packaging widely reusable, recyclable or compostable, and made with 50% recycled content;
- Reduce, reuse and recycle waste by reducing intensity by 50%, recycling more than 95%, and achieving zero waste to landfill in direct operations;
- Engage 65% of suppliers by spend to set science-based targets by 2025;
- Reduce transport emissions by 25% per tonne sold; and
- Develop innovative and sustainable product and service solutions for all customers.
Champion education and innovation by building skills and fostering innovative solutions that improve lives: - Reach 1 million young people with educational technologies, learning content and skills development to support future engineers and innovators;
- Support social impact partners to develop solutions that improve lives, including supporting the Washing Machine Project (thewashingmachineproject.org) to help 100,000 people in need; and
- Engage with 1.5 million engineers and innovators in creating socially responsible and sustainable solutions.
Empower employees by creating a safe, inclusive and dynamic culture in which people can thrive and grow: - Ensure that Electrocomponents' team is reflective of the customers suppliers, and communities it serves by working towards 40% of its leaders being women and 25% being ethnically diverse;
- Achieve and maintain an employee engagement score in the top 10% of high-performing companies;
- Aim for zero accidents with its people; and
- Inspire 50% of colleagues to volunteer to support their communities and build new skills.
Do business responsibly by taking action to ensure the highest ethical and environmental standards throughout Electrocomponents' business and global value chain: - Evaluate suppliers against its high ethical and environmental standards, and set ESG objectives for strategic suppliers; and
- Use ESG-related targets included in employee rewards program
