Using Less Energy

In 2021 we used 8.3 kWh/kilo, which is 6.9 % lower than our 2018 baseline. Our 2022 target is to reduce overall energy intensity by 7% compared to our 2018 baseline. This means that we have nearly achieved our 2022 target a year early.

A lot of the progress we have made has come directly as a result of the reductions we have made in water use. Dyeing is our most energy intensive process both for electrical energy to power the process but also for heat energy in the form of steam, and reducing the amount of water we use impacts especially on the heat energy requirements. We have also had a major drive on energy efficiency in our biggest spinning mills, which are substantial users of electrical energy. Through a broad range of actions we have achieved significant reductions in these units.

In addition, we have initiated a pilot programme for extensive metering and dynamic energy management, under our ESG Utilities project. We have installed hundreds of energy, and gas meters in addition to humidity and temperature sensors (on top of the previously mentioned water meters), the purpose of which is to monitor and measure relative and absolute energy use against production runs for individual departments (e.g. spinning, dyehouse, twisting) as well as for individual assets. This will allow us to use data driven decision making to target energy efficiency opportunities across our key sites, and will be extended during 2022.

The work stemming from the ESG Utilities programme will contribute towards aligning our energy management systems to ISO 50001, the international standard for Energy Management Systems. Our current policy is to align our systems but only get certification where there is a clear benefit to doing so. At the moment we have one large unit that is certified.

Transitioning to Cleaner and More Renewable Energy

Of the total energy we consume in our operations, 42% comes from fuels that we burn on our sites. We stopped using any coal in our operations in 2019. Currently 82% of our fuel used is natural gas with the rest split equally between oil and biomass. Our strategy is to promote natural gas over oil, and seek to move to biomass where feasible.

2021 Global Energy Split

The other 58% of the energy we use is mainly electricity purchased from external providers and a small amount of purchased steam. Our strategy is to accelerate the shift to certified renewable electricity. Some of our sites have already mobilised forms of on-site renewable energy generation, mainly in the form of solar panels and normally through long term power purchase agreements (PPAs) with reliable developers and operators. Due to the intensity of electricity used at a typical Coats plant, onsite rooftop solar sources can only generate a small percentage of the electricity demands. Therefore we need to expand our supply of off-site renewable sources.

We use every opportunity where we are renewing a supply contract or there are changes in the local regulations to seek renewable options. Our preferred approach is through PPAs that provide additionality of supply through the construction of new capacity. If we cannot achieve that then we will seek to source from existing renewable capacity, and if that is not possible then we will explore the market for Energy Attribute Certificates (EACs). Each country is managing its journey to renewable electricity in a different way and we can only approach this by deep engagement in each country. In total, currently, 7% of our electrical energy purchase are from certified renewable sources.

Reducing our Emissions

As detailed earlier in this report (see pages 13-17), Coats is committed to absolute reductions in emissions, in line with the Business Ambition for 1.5°C pathway and to achieve Net Zero by 2050 set out under our Science Based Targets.

As a result of increased industrial activity during 2021, subsequent to pandemic disruptions in 2020, our absolute emissions have increased in 2021, an outcome we expected to see as our production volumes recovered post-pandemic. We have nevertheless reduced our absolute emissions by 7% against our 2019 baseline notwithstanding a 5% increase in production volumes, so our relative emissions have reduced by 12%. This has been achieved almost entirely by the reductions in energy intensity noted above rather than by any transition to renewable energy at this stage. While this rate of absolute emissions reduction is slightly less than our target rate to meet our SBT commitment, we are confident that the progress we will make in renewable energy transition will recover this deficit in coming years. The full detail of emissions both absolute and relative is shown below on a market based view. Full details of both location and market based emissions by greenhouse gas are shown in the performance table at the end of this report.

The Energy Basics Programme

A global team was compiled for the launch of a Energy Basics Programme, an initiative carried out as part of our company-wide ‘Cleaner and Lighter’ project. The programme was developed to reassess the fundamental ways in which we consume energy and to identify further areas of opportunity for implementing best practice for the measurement and management of energy consumption across all Coats manufacturing sites. Steam, compressed air and electricity management were the three key areas identified for development.

Our initial focus has been on steam trap management, and optimising the efficiency of our steam processes to reduce overall consumption. We have engaged with a third party to conduct a comprehensive thermal assessment at one of our sites to better understand opportunities for steam savings. Our view is to use the results of these findings as a benchmark for other Coats manufacturing sites, moving forward.

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