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Energy

Strategy Pillars

ENERGY

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Our processes rely on energy, mainly for kinetic and thermal purposes. Our use of energy causes emissions of greenhouse gases that contribute to climate change. Reducing emissions through more efficient use of energy and using less emitting sources of energy is crucial to combat climate change.
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Our Energy Profile

At Coats, we are committed to reducing our emissions in-line with the Paris Agreement aligned 1.5 pathway in order to play our part in minimising climate change risks. We are fully committed to delivery of a 46.2% absolute reduction in our Scope 1 and Scope 2 emissions by 2030, based on our 2019 emissions inventory, and our principle forward looking metric and targets for energy will therefore be directly linked to this. In pursuit of this commitment, our 2026 target for Scope 1 and Scope 2 emissions will be delivery of a 22% reduction based on our 2022 baseline.
We have committed that 70% of our energy will be renewable by 2030 and our roadmap for delivery of this target is primarily built on conversion of all of our electricity supplies to renewable sources, and to progressively convert our heat energy to electrical or other clean generation systems. Our strategy for energy transition rests on the principles of working with country level energy providers through new power purchase agreements (PPAs) to deliver additionality of renewable energy as a first priority, collaborating with existing renewable providers as a second option, and lastly, in the shorter term, compensating through purchase of Energy Attribute Certificates (EACs) to offset use of non-renewables. In 2022, we have increased the proportion of our electricity for which we have EAC coverage to 25%, with certificates either transferred directly from our supplier or purchased from the market.
Our PPAs will focus primarily on solar and wind power generation installations, both off and onsite. 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.
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We currently have on-site solar power generation installations in a number of our Indian, Vietnam and Bangladesh operations, with off-site wind power installations in India. We are in active discussions with energy providers in other markets, and are committed to expanding this approach in other locations through 2023.
In addition to transition to energy renewables, we will supplement our Carbon emissions reduction through further reductions in energy intensity, with further rollout of our ESG Utilities IoT metering program to more manufacturing units in 2023. Local manufacturing continuous improvement teams will continue to focus on new opportunities for energy intensity reduction. Having delivered a 10% reduction in energy intensity in 2022 on our 2018 baseline, we expect the rate of reduction of our energy intensity to decrease, however remain committed to delivery of a further 1% per annum through the 2023 to 2026 time horizon.
We continue to have one large manufacturing facility certified to the ISO 50001 international energy management systems standard and our policy is to align systems to this standard across other facilities, without pursuit of external certification unless there is a clear benefit to doing so.

Use of Smart Metering to Deliver Data Driven Insights and Actions on Energy

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pele-tang“As Engineering Manager of our Shenzhen manufacturing facility in South China, I have led the local ESG Utilities programme where we initiated real-time streaming of energy data into a cloud based platform. This has enabled us to much better understand energy usage patterns and identify previously hidden opportunities for delivery of energy efficiency improvements.

After our dyeing process, we dry the thread before processing into finished goods for sale to our customers. The drying process involves two stages; the first being water removal through a centrifugal extraction process, followed by a radiofrequency drying process where remaining water is driven off by targeting the vibrational wavelengths of remaining water molecules.

Using the streamed smart energy data from these two processes, we were able for the first time to review the entire drying process holistically, and the new transparency enabled our Six Sigma continuous improvement team to optimise the overall process through nominal energy increases in the centrifugal extraction process and significant reductions in the radio-frequency process, delivering a notable 15% end to end process energy reduction. The additional transparency that has come from increased granularity data has really helped us identify new areas of opportunity.”

Pele Tang
Engineering Manager, Shenzhen

Coats Energy Profile

In 2022 we consumed 8.20 kWhr per Kg energy versus 9.09 kWHr per Kg in our 2018 baseline period for all business activities over which the company has operational control. This equates to a 10% reduction, significantly exceeding the 7% reduction in energy intensity we committed to delivering in this period.
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Through 2022, as part of our global Cleaner and Lighter program, we further embedded our energy management platform with extended use of realtime smart energy meter data being streamed into our cloud based utilities management system. This new capability has enabled a far greater level of energy metering across operating units, giving heightened granularity and transparency of energy consumption at departmental, work centre and individual machine level and using data driven decision making has aided identification of new actionable insights to increase energy efficiency. Examples of improvement areas identified through this initiative were powering down of stand-by boilers, optimisation of frequency of air humidification systems in Spinning and Twisting operations, optimisation of compressed air and steam pressure and leak identification and remediation, campaigns to optimise asset utilisation in our thread bonding lines and optimisation of site level transformer loading. Across numerous facilities, we had active engagement from across the entire workforce with teams competing to identify and deliver energy reductions across production, dormitory and canteen facilities. Our Environmental and Climate Change Policies cover our energy and emissions aims and objectives.

Our Energy Basics program was extended in 2022 with best practice webinars delivered to provide training to relevant staff across all geographic locations, and this was supplemented with revised Standard Operating Procedures and support documentation to aid local manufacturing teams with enhanced knowledge and understanding of energy preservation opportunities.
Combining learnings from our ESG Utilities smart metering program and our Energy Basics program, we developed the “lift and shift” concept where insights, actions and resulting energy efficiency improvements in one manufacturing location were transferred to other manufacturing locations, achieving wider short term benefits without the need for extensive metering in the recipient sites.
As outlined in our Water Pillar, the further considerable reductions delivered in water intensity in 2022 have contributed to significant energy reductions; with dyeing being our most energy intensive process both for electrical energy to power the process but also for heat energy in the form of steam. Reductions in amount of water we use impacts positively through reduced heat energy requirements.

Energy: 22% reduction in Scopes 1&2 CO2e emissions

Indicator
 Unit 2022* 2021 restated1 2021 2020 restated1 2020 2019 restated1 2019 2018 restated1 2018
Total energy used in operations
 Million kWh 692 792 801 661 670 826 831 858 865
Energy intensity
 kWh/kg produced 8.2 8.5 8.6 8.9 9.1 9.1 9.4 9.1 9.3
Energy intensity movement compared to 2018
 % movement -10% -7% -7% -3% -2% 0% 1%
Non-renewable electricity used
 % 25% 28% 32% 29% 32% 28% 34% 27% 32%
Natural gas used
 % 33% 34% 31% 33% 30% 32% 28% 33% 29%
Oil used
 % 3% 4% 4% 4% 4% 5% 4% 5% 5%
Coal used
 % 0% 0% 0% 0% 0% 0% 0% 0% 0%
Renewable energy used
 % 38% 34% 34% 34% 33% 35% 34% 34% 34%
% Electricity covered by renewable certificates
 % 25% 7% 7% 8% 6% 7% 5% 5% 3%
Total carbon footprint,
Scopes 1, 2 & 3²
 Thousand tonnes CO2e 985.2 1,157.0 900.7 1,123.1 303
Scopes 1 & 2 footprint2
 Thousand tonnes CO2e 207.6 246.8 253.4 212.8 217.2 269.2 273.8 303.3
Scope 1 emissions footprint³
 Thousand tonnes CO2e 50.0 58.2 62.7 48.7 51.3 62.26 64.6 67.1
Scope 1 CO2 emissions
 Tonnes CO2 48,585 56,925 60,106 46935 49,743 60789 63,153
Scope 1 CH4 emissions
 Tonnes CH4 66.7 78.5 82.8 63.68 67.2 80.7 83.7
Scope 1 N2O emissions
 Tonnes N2O 52.7 56.6 58.4 45.86 47.3 75.2 76.6
Scope 1 HFCs emissions
 Tonnes HFCs 1,159.8 1,174.8 2,476.8 1470 1,494.5 1317 1,339.2
Scope 1 PFCs emissions
 Tonnes PFCs 0 0 0.0 0 0.0 0 0.0
Scope 1 SF6 emissions
 Tonnes SF6 0 0 0.0 0 0.0 0 0.0
Scope 1 NF3 emissions
 Tonnes NF3 0 0 0.0 0 0.0 0 0.0
Scope 2 emissions footprint (location based)⁴
 Thousand tonnes CO2e 195.8 213.9 216.1 184.3 186.2 232.9 235.3 236.2
Scope 2 CO2 emissions
 Tonnes CO2 194,754 212,741 214,905 183,278 185,116 231,625 233,974
Scope 2 CH4 emissions
 Tonnes CH4 216 232 234 214 216 275 277
Scope 2 N2O emissions
 Tonnes N2O 815 944 948 829 833 1,043 1,047
Scope 2 emissions footprint (market based)⁵
 Thousand tonnes CO2e 157.6 188.6 190.7 164.1 165.9 206.9 209.2
Scope 2 CO2 emissions
 Tonnes CO2 156,004 186,503 188,666 162,323 164,160 204,510 206,858
Scope 2 CH4 emissions
 Tonnes CH4 114.6 126.6 128.7 128.1 129.9 153.8 155.8
Scope 2 N2O emissions
 Tonnes N2O 671.6 585.2 589.3 526.3 529.8 622.7 626.8
Out-of-scope biofuels, Scope 2 CO2 emissions
 Tonnes CO2 19,900.0 32,789.0 32,789.0 26,960.0 26,960.0 38,163.0 38,163.0
% scope 2 emissions covered by renewable certificates
 % 25% 8% 7% 6% 6% 5% 5% 4%
Emissions volume intensity (location based)
 CO2e kg/kg production 2.9 2.9 2.7 3.1 3.1 3.3 3.0 3.1
Emissions value intensity (location based)
 CO2e tonnes/$m sales 154 188 176 209 202 223 185 192
Scope 3 emissions footprint⁶
 Thousand tonnes CO2e 777.6 891.3 671.0 849.2
Scope 3 CO2 emissions
 Tonnes CO2 641,210 738,782 579,979 722,740
Scope 3 CH4 emissions
 Tonnes CH4 7,589 7,106 4,419 6,748
Scope 3 N2O emissions
 Tonnes N2O 26,128 31,994 23,590 30,525

1Due to the sale of our Brazilian and Argentinian businesses in 2022 all years from 2018 to 2022 have been restated to exclude these businesses.

*2022 Data – All data excludes Brazil/Argentina, except emissions data, H&S data and economic value data.

2Total carbon footprint includes Scope 3 from 2019 and include market based Scope 2 from 2019. Prior years only include scopes 1 & 2 and location based for Scope 2. The boundary methodology for our emissions is based on financial control for all companies that are consolidated in the company financial statements and equity share for 2 joint venture operations.

3Scope 1 methodology – Fuel consumption data is collected from all units monthly, based on metred or invoiced consumption coverted into kWh. This is converted into emissions using DEFRA gross calorific value conversion factors published each year. This is then consolidated as per the boundary methodology.

4Scope 2 Location based methodology. Electricity or steam purchase volumes are collected from all units monthly in kWh. For location based calculations, all electricity kWhs are converted using IEA country level conversion factors for the year in question, and purchased steam or heating is converted using DEFRA conversion factors for the year in question. Data is then consolidated using the boundary methodology explained in note 2.

5Scope 2 Market based methodology. Electricity or steam purchase volumes are collected from all units monthly in kWh. For market based calculations, electricity kWhs that are covered by energy attribute certificates directly from suppliers or purchased on official markets are removed and the remainder are converted using supplier level conversion factors, if available or IEA country level conversion factors for the year in question. Purchased steam or heating is converted using DEFRA conversion factors for the year in question except for biogenic steam volumes where the CO₂ component of the emissions is removed and reported separately. Data is then consolidated using the boundary methodology explained in note 2.

6Scope 3 methodology. Scope 3 emissions are calculated annually using multiple sources for data (base activity data comes from internal data sources and conversion factors are generated from various sources, including suppliers, life cycle assessment data providers and industry data sources). The most critical data, covering primary raw materials, is largely sourced from suppliers. Each Scope 3 category is calculated with the best available set of data sources, and is consistent over the 3 reported years in this table.

For more information on our historical performance, please download Performance Summary Data

Energy: 22% reduction in Scopes 1&2 CO2e emissions

Indicator
 Unit 2017 2016 2015 2014
Total energy used in operations
 Million kWh 823 829 833 858
Energy intensity
 kWh/kg produced 11.5 11.9 12.2 13.2
Non-renewable electricity used
 % 29% 30% 32% 31%
Natural gas used
 % 34% 35% 33% 33%
Oil used
 % 7% 6% 6% 11%
Coal used
 % 0% 0% 0% 0%
Renewable energy used
 % 30% 29% 29% 25%
Total carbon footprint,
Scopes 1, 2 & 3²
 Thousand tonnes CO2e 311 319 305 322
Scopes 1 & 2 footprint2
 Thousand tonnes CO2e 310.6 318.5 305.4 321.9
Scope 1 emissions footprint³
 Thousand tonnes CO2e 71.8 70.9 67.8 81.5
Scope 2 CO2 emissions
 Tonnes CO2 238.8 247.6 237.6 240.4
Emissions volume intensity (location based)
 CO2e kg/kg production 4.3 4.6 4.5 4.9
Emissions value intensity (location based)
 CO2e tonnes/$m sales 206 219 208 210

1Due to the sale of our Brazilian and Argentinian businesses in 2022 all years from 2018 to 2022 have been restated to exclude these businesses.

*2022 Data – All data excludes Brazil/Argentina, except emissions data, H&S data and economic value data.

2Total carbon footprint includes Scope 3 from 2019 and include market based Scope 2 from 2019. Prior years only include scopes 1 & 2 and location based for Scope 2. The boundary methodology for our emissions is based on financial control for all companies that are consolidated in the company financial statements and equity share for 2 joint venture operations.

3Scope 1 methodology – Fuel consumption data is collected from all units monthly, based on metred or invoiced consumption coverted into kWh. This is converted into emissions using DEFRA gross calorific value conversion factors published each year. This is then consolidated as per the boundary methodology.

4Scope 2 Location based methodology. Electricity or steam purchase volumes are collected from all units monthly in kWh. For location based calculations, all electricity kWhs are converted using IEA country level conversion factors for the year in question, and purchased steam or heating is converted using DEFRA conversion factors for the year in question. Data is then consolidated using the boundary methodology explained in note 2.

For more information on our historical performance, please download Performance Summary Data

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