Environment

We are fully committed to meeting our environmental responsibilities and limiting the impact of our operations in a way that is both practically and economically feasible. Our environmental policy, endorsed by the Board, covers material issues including energy consumption, carbon emissions, supply chain and operational waste. We conduct activities to address each of these areas and our progress this year is presented below.

We have established a formalised enterprise risk management process that operates at business unit and Group level and includes climate change as a risk category. At asset (store) level, climate change risks are identified as part of business contingency / continuity processes – with the identified risks mainly relating to extreme weather events.

Energy Management

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We recognise that the operation of our retail stores is one of our major environmental impacts and have set ourselves an ambitious energy and CO2 reduction target to help mitigate this.

 

UK Energy Consumption Reduction target

Dixons Carphone has an agreed target of reducing its UK energy consumption by 30% by 2020, and corresponding CO2 emissions by 35%.

(Measured from a 2013/14 baseline, the year prior to the merger between Dixons Retail and Carphone Warehouse) 

As part of our long-term review we are considering what our longer term targets will be and whether to adopt a science-based target. To ensure we meet our reduction target by 2020, Dixons Carphone has a structured energy management programme within the UK & Ireland that provides an overarching framework of activities and projects to manage and reduce our consumption while maximising our efficiency.

The energy consumption and corresponding CO2 emissions of our business have reduced year on year. For the UK & Ireland portfolio in isolation, we have achieved a reduction in electricity usage of 1.7% on a like-for-like basis and 10.3% on an absolute basis.

Dixons Carphone – UK&I Consumption 2015-16 v’s 2016-17 (kWh)
Utility  2016/17  2015/16  Change 
Electricity 168,599,606 187,930,892 (10.3%)
Gas 29,882,655 36,724,101 (18.6%)
Combined 198,482,261 224,654,993 (11.7%)

At Group level, overall energy consumption has decreased by 9.1%, electricity consumption has decreased by 8% and natural gas by 17.8%. The UK is the largest kWh contributor to both these reductions.

 

Total company-wide kWh energy consumption is as follows:

Dixons Carphone – Group Energy Consumption (kWh)
Utility  2016/17  2015/16  Change 
Electricity 279,189,910 303,551,007 (8.0%)
Gas 30,185,347 36,725,630 (17.8%)
Fuel Oil for heating purposes 46,555 217,368 13.4%
Total 309,621,812 340,494,005 (9.1%)

 

To continue to drive down consumption we embrace the opportunities of improving our efficiency through property development, disposals, acquisitions, our own internal energy efficiency programme and, where financially viable, utilising products, equipment and suppliers with the least environmental impact.

In 2015/16 we combined the energy management reporting platform and processes of the legacy Dixons Retail and Carphone Warehouse businesses which has delivered great results for Dixons Carphone through 2016/17. This helps us manage our energy consumption through the collection and analysis of half-hourly data at individual site level and ensures optimum efficiency with minimal wastage. Through 2016/17 this work has helped mitigate consumption by approximately 1,834 MWh.

In the UK, part of our programme to drive down energy consumption in our stores includes the use of energy dashboards at site level. Both our legacy Dixons Retail and Carphone Warehouse retail sites now have access to energy dashboards as a visual display of their consumption profiles. Financial incentives are offered to business unit, facility and energy managers for meeting their energy consumption budgets or targets.

Dixons Carphone remains an active member of the Retail Energy Forum and the British Retail Consortium engaging on areas such as enhanced capital allowances for energy-efficient technologies and the Government’s Electricity Demand Reduction (‘EDR’) scheme.

 

Capital Expenditure Projects

As with previous years, Dixons Carphone has invested significant sums in projects to ultimately reduce our energy consumption and improve our efficiency. LED lighting again features heavily in our 2016/17 energy efficiency programme which has seen c. £2 million invested in this technology. This year we have converted 42 large stores to LED lighting alongside a selection of large car parks and Building 2 (750,000 sq ft) of our National Distribution Centre in Newark.

 

Solar Photovoltaic Schemes

Following last year’s successful installation of two Solar PV schemes at Coventry and Southampton, our largest roof-mounted installation to date was completed in June 2017. A 1 MWp solar scheme (over 3,600 panels) will generate approx. 940,000 kWh of electricity for our Newark National Distribution Centre, reducing the site’s CO2 emissions by over 500 tonnes per annum.

 

Water

We have merged our water bureau services with energy throughout the UK & Ireland to increase reporting capabilities and facilitate activities surrounding the water market deregulation.

 

Carbon Emissions

This section provides the emission data and supporting information required by The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, Part 7: Disclosures Concerning Greenhouse Gas Emissions.

This report covers the international operations of the Group, including the UK & Ireland, Northern and Southern Europe. Operational control has been used to determine organisational boundary. All scope one and two emissions are included except where noted.

Our 2016/17 scope 1 and 2 emissions data has been independently assured to ISO 14064-3 standards.

Overall Group emissions and emissions per sq ft have decreased by over 15%.

The GHG emissions for the Dixons Carphone business are:

Ref    Category Tonnes of
CO2e
    emitted
2016/17
Increase/
(decrease)
Tonnes of
CO2e
emitted
2015/16
Tonnes of
CO2e
emitted
2014/15
A Emissions from combustion of fuel(1) 21,698 5% 20,614 19,760
B Emissions from the operation of any facility(2) 2,399 (14%) 2,797 3,661
C Emissions from purchase of electricity(3),(4) 88,496 (19%) 109,534 127,607
  Total: 112,593 (15%) 132,945 151,028

 

Intensity measures
The emissions per unit area of occupied space are as follows:

Division  Tonnes of CO2e
emitted per
1,000 sq ft
of floor area(5)
2016/17 
Tonnes of CO2e
emitted per
1,000 sq ft
of floor area
2015/16 
Tonnes of CO2e
emitted per
1,000 sq ft
of floor area
2014/15
Dixons Retail  4.81  5.76  5.73
Carphone Warehouse  11.27  13.75  17.41
Total  5.33  6.36  n/a

 
Notes
(1) ‘Emissions from combustion of fuel’ includes a proportion of private cars being used for business travel, which would be classified as Scope 3. It is not practical to exclude this data from the company’s expense records so in keeping with the previous years it has been included to provide a conservative view of emissions. For a proportion of our company cars, we have moved from using claimed business mileage to fuel card purchases (litres of fuel) this year. This is more accurate but has led to a small increase in overall emissions.
(2) Refrigerant data processing methodology and exclusions:
 a. Where refrigerant top-ups are reported, we assume this covers all leakage across the area of the estate under that contractor’s responsibility, so have not estimated leakage from other units where no top-ups were carried out.
 b. Refrigerant data from the Wednesbury Carphone Warehouse site is not included as the data was not available for 2015/16 and 2016/17 (although this is estimated to be significantly less than 1% of total emissions for the Group).
 c. Refrigerant top-ups across the Nordics has been estimated for 2016/17 based on the top-ups reported in 2015/16 as the data was unavailable.
 d. In previous years, some refrigerant charges for new installations were reported as leakage which has been amended for 2016/17 onwards. This accounts for most of the reduction compared to 2015/16.
(3) The electricity consumption figure includes Scope 2 generation emissions but not Scope 3 transmission and distribution losses.
(4) Electricity and gas usage is based on supplier bills. Manual gap filling was conducted for April 2017 in the UK & Ireland for smaller electricity supplies, using an average of the consumption year to date. This is because this report was due before some electricity bills had been provided by the suppliers.
(5) Overall floor area of the Dixons Carphone business is estimated to be 21,111,540 sq ft. This is split between the Dixons Retail business which is estimated to be 19,390,570 sq ft and the overall floor area of the Carphone Warehouse business which is estimated to be 1,720,970 sq ft. Carphone Warehouse floor space now includes back of house areas, contributing to the increase in this division’s floor area of approximately 135,000 sq ft since 2015/16
The calculations use the methodology set out in Defra’s updated greenhouse gas reporting guidance, Environmental Reporting Guidelines (ref. PB 13944), issued in June 2013 and is being independently assured.

Supply Chain

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At Dixons Carphone, we work hard to understand and manage our impact in our supply chain and customer use of products. We have a strong focus on ensuring our products are sourced ethically and are taking action to address the risk of modern slavery in our supply chain.

We also see our supply chain as an opportunity to help consumers reduce their environmental footprint, offering energy-saving products such as Hive and Nest.

 

Ethical sourcing

We have an Ethical Sourcing Policy which reflects our commitment to acting ethically and with integrity in all our business relationships. Our Ethical Sourcing Policy is based on the Social Accountability 8000 standard, FTSE4Good criteria and takes into account the Modern Slavery Act. We also work closely with organisations such as SEDEX and the British Retail Consortium to ensure our policies and procedures remain relevant.

Our Original Equipment Manufacturer (‘OEM’) in Hong Kong sources many product types that are sold under our own or licensed brand names. This part of our operation is well established and has been actively engaging in ethical auditing / risk assessment for many years. We require our OEM suppliers to comply with our strict trading terms and operational procedures, and to implement and enforce effective systems and controls to meet our minimum standards in respect of Health and Safety, wages, working hours, equal opportunities, freedom of association, collective bargaining and disciplinary procedures. It is against our terms of operation to employ any forced or child labour.

 

We monitor adherence to our policies by auditing our suppliers prior to selection and on an ongoing basis. Where working practice failures have been identified, we work with suppliers to help them improve their working practices. Where this is not possible or no improvements are made, they will not be approved as a supplier, or will be delisted. During the year under review, 15 of the 25 suppliers classified as red failed to make improvements and therefore the Group did not approve them to supply our branded products or they were delisted.

The results of ethical supply chain audits carried out during the period under review are detailed below:

Performance indicators 2016/17          
  Green Amber  Red  Total 

Delisted/
not
approved

Audit status 33 99  25 157 15

Waste and recycling

We strive to deliver continuous improvements to our recycling and sustainability programme. All recyclables from our stores are backhauled to our national recycling facility at Newark. Across our estate, our 16 customer service centre depots have standardised equipment to deliver consistent grades of cardboard, plastic and expanded polystyrene to our recyclers in order to ensure we utilise the transport to a maximum and obtain the best value we can achieve for our material.
We actively encourage our employees to recycle through communication campaigns and the provision of recycling facilities at all sites.

 

Product responsibility

We continually pursue ways to help our customers reduce their environmental impact through providing low carbon products and offering Waste Electrical and Electronic Equipment (‘WEEE’) re-use schemes.

In 2017/18 we will introduce a new OEM LED light bulb range. LED bulbs use 90% less energy than traditional Incandescent bulbs and last up to 15 years so customers can save over £100 per year on their energy bills (based on 2.5 hours’ per day).

Following our acquisition of Simplifydigital we now offer our customers energy switching services, including our Voltz App, which saves them money and reduces their energy consumption. We are also collaborating with SSE to support the roll-out of their smart metering to six million customers in the UK.

We have several schemes in place to encourage and enable WEEE recycling. Online customers buying white goods or a TV larger than 39” are prompted with the option to have an old appliance collected for recycling. At this point, customers can also click through to our recycling page which gives details of our free in-store take back which covers smaller electronics too. In store, our sales teams inform customers about our collection and recycling service.

This has resulted in WEEE tonnage of 67,000 tonnes being collected in 2016/17 (7.8% increase on 2015/16) which is an estimated 75,000 tonnes of CO2 saved.

We also work with 11 UK charities who select unwanted WEEE from our Customer Service Centres which they repair and reuse to sell. This has helped households save an estimated £2,342,250 and 1,275 tonnes of CO2 during 2016/17. This translates to a reuse percentage of 8% (1% increase on 2015/16).

In total, over 14,000 tonnes of packaging recycled (3% less than 2015/16, driven by lighter and less packaging used around products) which is an estimated 16,000 tonnes of CO2 saved (figures from our waste management agency responsible for all cardboard, plastic, polystyrene and wood recycled across our estate).

We are also currently working on a project to improve the wood recycling process for the business and enable us to sell fuel into the UK biomass market. 

 

Second Home (Greece)

Kotsovolos has launched a successful recycling scheme which places unwanted or used electrical appliances and devices in new homes among families who can’t afford to buy new ones. The retailer collects, refurbishes and delivers devices to local authorities who redistribute them to those families in need, recycling any appliances unable to be repaired. 

 

Re-use Innovation with HM Prisons

A three-way partnership between Dixons Carphone, DHL EnviroSolutions and WasteCare in collaboration with National Offenders Management Service (‘NOMS’) sees unwanted large appliances repaired in a HM Prison within purpose-built rooms. Inmates are trained in the necessary skills and then refurbish the appliances, which are sent for sale to charities and social housing projects. The prisoners are paid a weekly wage to do this. The overall objective will see an increase in the re-use rate of WEEE and reduce reoffending rates by giving inmates purposeful skills which they can use to gain employment upon release.

We actively engage to achieve a more resource-efficient economy. This year we worked with WRAP, the Waste and Resources Action Programme to support their Electrical and Electronic Equipment Sustainability Action Plan to improve business efficiency and gain greater value from re-use and recycling by setting up a WEEE trial in Cardiff.

We are also working in collaboration with Axion Consultancy to offer collection points at CurrysPCWorld stores in Stockport, White City, Bury, Bolton and Cheetham Hill. This collection accepts broken or working IT equipment, e.g. laptops, smartphones, desktop PCs, gaming devices and tablets. This is an EU-funded trial to increase the recovery of Critical Raw Materials from WEEE. The information and evidence gathered through the trials will contribute towards the development of a European-wide infrastructure plan and policy recommendations to support the increased recovery of critical and valuable materials from WEEE.