Environment

The Group’s activities can be summarised as largely manufacturing and assembly operations, combined with office based research, product development and other commercial functions, where we receive materials and products from suppliers, assemble them into product and dispatch to customers and some on-road vehicle testing. Therefore, the Group’s main direct impact on the environment is limited to the consumption of heating and power and fuel or electricity for customer vehicles, while providing test services and developing and testing products.

We recognise the importance of monitoring, controlling and improving our environmental performance in order to meet our medium-term target of carbon neutrality in 2030. Enhanced monitoring of our environmental performance has resulted in an increase of annual emissions for the Group. This is most evident with our Scope 3 business travel emissions. This year we have collated more information to include all travel by air and land including the use of hire cars, train travel and hotel stays.

The Group remains committed to identifying and assessing environmental risks, such as packaging waste, arising from all operations. Waste management initiatives are encouraged and supported by the Group and materials are recycled where practicable. Local management teams are committed to good environmental management practices and are responsible for implementing the necessary initiatives to meet their local obligations. Each facility participates in recycling paper, plastic, cardboard and wood from pallets and continues to focus on reducing energy consumption through the efficient use of heating and lighting. The Group’s usage of water is minimal and predominantly relates to cleaning, bathrooms and staff refreshments.

This year the Group has built on the environmental reporting processes and procedures across its subsidiaries to provide a unified framework. The main tools used to track and monitor our environmental impact across our sites are our Environmental Management Systems. Both internal and external environmental audits have been completed at Anthony Best Dynamics Limited and AB Dynamics GmbH, resulting in a successful surveillance audit of our ISO 14001 accredited Environmental Management System. Over the next year we aim to implement this across all Group subsidiaries, standardising reporting and enabling us to set further environmental targets in FY 2024.

We have continued to build on the environmental reporting processes across all Group subsidiaries and application of the Environmental Management System where appropriate.

Our environmental reporting covers all entities over which the Group has financial control for the financial year ended 31 August 2023. Data for businesses acquired or disposed of during each reporting period is also included where available.

We are pleased with our environmental performance for the year and can confirm that we have not received nor paid any environmental fines or penalties either in the last twelve months or in the previous five years.

Reducing global greenhouse gas emissions to combat climate change is one of the biggest global challenges of our time. We aim to minimise our carbon footprint as the UK and the rest of the world transition to a low carbon economy. As the Group does not use its own logistics or freight, its primary direct energy usage and related CO2 emissions arise from its facilities and vehicles. As a business, we continue to assess our impact on the environment and try to mitigate or reduce the Group’s energy consumption wherever possible.

The Group’s emissions are broken down by Scope 1, Scope 2 and some Scope 3 emissions. For the second time in FY 2023, Scope 2 emissions associated with the Greenhouse Gas Protocol ‘market based’ method have also been calculated, in addition to ‘location based’ Scope 2 emissions.

In FY 2023, the Group’s total Scope 1, 2 and 3 emissions (market based) increased by 50% year on year on an absolute basis and 20% year on year on an intensity basis (per £m of revenue).

Our Scope 3 emissions include emissions from business travel and water supply and treatment. Compared with FY 2022, our FY 2023 Scope 3 emissions have increased significantly across the Group. The 140% increase can be attributed to a significant uplift in business travel since the relaxation of COVID-19 restrictions across the world. Our business travel data collection has also increased in scope since FY 2022 reporting, with data disclosure now including hotel stays and use of other modes of transportation, such as trains, that were not previously accounted for. In FY 2024 we will endeavour to improve the extent of our measurement of Scope 3 emissions further, in order to obtain a better understanding of our total emissions.

In FY 2023, our total energy consumption decreased by 1% year on year on an absolute basis. This was due to a decrease in mileage of vehicle testing, reported in Scope 1. There were increases in electricity usage and personal vehicles used for business purposes. In addition to the impact of the FY 2022 acquisitions, the increase in energy consumption in FY 2023 is also in part as a result of increased product manufacture and testing at our UK sites. Overall, the trend in our energy consumption data has generally followed our emissions data as our greenhouse gas emissions are mainly due to the use of energy at our sites.

AB Dynamics plc energy consumption and emissions

Notes:
Emissions for the Group are calculated using methodologies consistent with the Greenhouse Gas (GHG) Protocol: A Corporate Accounting and Reporting Standard. Source data (meter readings) has been used wherever possible; where this is not available this has been supplemented by billed data and an amount of estimated data.

For FY 2023, the UK government’s GHG Conversion Factors for Company Reporting 2023 (DEFRA factors) were used for fuels and UK electricity. Emissions factors provided by Carbon Footprint Ltd and US EPA were used for operations in other locations globally.

Scope 1 vehicle emissions include Group owned vehicles and those that are controlled by the Group for testing purposes.

The Scope 2 emissions associated with the Greenhouse Gas Protocol ‘market based’ method have been calculated again for FY 2023. In line with the Greenhouse Gas Protocol Guidance, this figure has been calculated using residual-mix emissions factors where available (Germany and UK). In our other operating regions where residual-mix emissions factors were unavailable, country-specific emissions factors have been used instead (as per the location based method) in line with the Greenhouse Gas Protocol Guidance. Where sites consume grid electricity backed by REGOs, this has been taken into consideration within the calculations.

FY 2023 business travel data is inclusive of private vehicles used for business purposes, train travel, air travel, car hire and hotel stays. Metering and monitoring improvements continue to be implemented to capture and improve the Company’s data stream.

Increase in 2022 figures due to inclusion of VadoTech data (previously not available for the 2022 Annual Report.

Water usage data across the Group continues to be collected this year so we are able to set a baseline and future targets to reduce water consumption can be identified and established across the business. Water is not widely used in the design, manufacturing or servicing of our products, however, we acknowledge that water is a scarce resource and careful management of water consumption is essential to minimise our impact on water availability and quality.

As part of our improved monitoring processes, FY 2023 has seen an increase in data reporting for water usage. A number of our subsidiary sites are based in shared or leased premises and water consumption is included in lease fees and water consumption data for our businesses is not available.