Associated British Foods plc – Annual report – 17 September 2022
Industry: food and drink, retail
We are cutting carbon emissions in our operations, making them more energy-efficient, and using resources such as water in more circular ways to reduce the impact of serving our customers.
We are focused on what really matters:
- focusing on climate change; and
- making finite resources go further.
Focusing on climate change
Climate change poses a material risk to our businesses and their supply chains.
We support policies that align with the goals of the Paris Climate Agreement.
Our businesses are committed to cutting Scope 1 and Scope 2 GHG emissions from their operations. In addition, they are currently calculating their Scope 3 emissions, focusing initially on their supply chains. Primark has completed this process and now reports its full supply chain Scope 3 emissions.
We do not set a groupwide climate-related target; instead, our businesses set targets that are appropriate to their operations and supply chains. A number of them have now announced their emissions reduction plans, including targets and dates:
- AB Sugar is targeting a 30% reduction in Scope 1 and Scope 2 emissions by 2030, against a 2018 baseline;
- UK Grocery division is targeting a 50% reduction across all three Scopes by 2030, against a 2015 baseline – in line with the Courtauld Commitment;
- Primark is targeting a 50% absolute reduction across all three Scopes by 2030 against a 2018 baseline; and
- Twinings aims to make all of its tea and herbal infusions carbon neutral by 2030.
In addition, both Primark and AB Sugar have committed to set science-based targets through the Science Based Targets Initiative (SBTi). Collectively, achieving these targets would result in a 32% reduction in our Scope 1 and 2 emissions by 2030, against a 2018 baseline, and a 37% reduction since the adoption of the Paris Agreement.
Based on our track record and plans up to 2030, we are confident that we are well-placed to make significant progress beyond 2030 and up to 2050. However, achieving net zero across ABF will also depend on a number of factors that are beyond our control – for example, the availability of renewable energy and the decarbonisation of vehicle fleets and processing equipment.
We cannot solve all the problems that reaching net zero presents on our own; but we can continue our emissions reductions plans and use our expertise and influence to help shape wider solutions. Last year we set out our approach to TCFD and our corresponding action plan. This year the Group has complied with the requirements of Listing Rule 9.8.6R by including climate-related financial disclosures consistent with the TCFD recommendations and the 11 recommended disclosures, published in 2017 by the TCFD, including the supplemental guidance for all sectors. These are set out on pages 83 to 93 of this Annual Report.
Further information is also available in our 2022 Responsibility Report and our Climate Change ESG Insights 2022.
We publish further detail on our climate-related governance and risk management through CDP’s report at www.cdp.net.
Our Scope 1 and 2 emissions (location-based) decreased by 2% from 3.16 million tonnes CO2e last year to 3.11 million tonnes CO2e Δ this year.
Reducing our energy use
As energy generation is our primary source of GHG emissions in our own operations, our businesses are working hard to improve their energy efficiency on a continuous basis, as well as through investment projects. In addition, the price volatility of the energy we purchase means that rigorous energy management is a key operational focus.
In 2022, our total energy use was 21,046 GWh Δ, a 4% decrease on 2021. Our sugar businesses consumed 81% of the Group’s total, or 17,110 GWh Δ.
In 2022, we exported 929 GWh of energy, which is a 2% increase compared with last year. Several of our businesses generate energy on-site using renewable sources of fuel and when this is surplus to their needs, they export it to the national grid or other organisations.
For over 10 years we have reported the energy use and, GHG emissions of our Group and, more recently, of our businesses. In compliance with UK reporting requirements, we have provided in the table on the previous page our UK energy and GHG emissions data. The principal energy efficiency measures to reduce our carbon emissions include the introduction of energy monitoring systems; conversions to LED lighting; and upgrades to production machinery such as compressors and boilers to improve efficiencies.
Of the total energy we used this year, 54%Δ or 11,300 GWh, came from renewable sources. This equates to a 5% decrease on 2021.
These are predominantly biomass fuels from by-products generated as part of the production process within our agricultural businesses. There is a high degree of energy self-sufficiency, within AB Sugar in particular. Crop fibre from sugar cane, known as bagasse, accounts for the vast majority of biomass use in ABF.
Several businesses also use by-products as feedstock for anaerobic digestion facilities to produce biomethane, which is then used in combined heat and power plants.
For more examples of energy efficiency actions, see our 2022 Responsibility Report and more detailed performance data included in our Climate Change ESG Insights 2022.
Δ EY has provided limited independent assurance over this metric. See the ABF Responsibility Report 2022, page 56, for EY’s assurance statement.
Climate-related Financial Disclosures (TCFD) (page 83)