Our commitment
In 2021 we committed to reduce our total direct and indirect greenhouse gas (“GHG”) emissions year on year. In this report we include information on our climate-related risks and opportunities in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”). We have
made good progress on our goals, with an overall 30.0% reduction in scope 1and market-based scope 2 emissions from our 2021 figures, and we have achieved a 13.0% year-on-year reduction in 2024. We continue to make our Carbon Disclosure Project (“CDP”) submissions, and we have developed the quality and range of scope 3 carbon emission data that we report on with a clear path to reporting all material scope 3 emissions. This work is overseen by our ESG Committee with regular progress reports to the Board. We have adjusted our GHG emission net zero target to reflect evolving circumstances and while the target date has shifted, our commitment and ambition to ensure our net zero remains steadfast, this adjustment allows us to strengthen our strategy and ensure a realistic, achievable and transparent GHG emission reduction in line with our adjusted timeline of 2035.
Introduction
Our environmental performance information is presented in accordance with the Streamlined Energy and Carbon Reporting (“SECR”) Guidance (March 2019), as specified under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. Data is presented for our financial year, from 1 November through to 31 October, and includes information on significant environmental aspects: energy consumption; associated GHG emissions; freshwater use; and waste generation. Our GHG emissions calculations are undertaken in accordance with the GHG Protocol Corporate Accounting and Reporting Standard as outlined in our
basis of reporting document.
Our approach
We are actively seeking ways to reduce our impact on the environment and build resilience to climate change by focusing on energy, waste and understanding the impact of global climate change on our operations. These focus areas are periodically reviewed by our ESG Committee and are reviewed and expanded on each year in line with broader sustainability goals and reporting guidelines. In 2024 we completed the implementation of a new corporate sustainability software solution, to aid our business units in measuring and recording their GHG emissions, the new platform supports the business units with various capabilities that help ensure increased accuracy and detail of our GHG emission data across the scopes 1,2 and 3.
Our strategy
Our strategy is to reduce our global GHG emissions through improving efficiency to reduce consumption and waste.
- Scope 1 associated emissions are being addressed through the adoption of green fuels and upgrading of facilities and equipment to be more efficient or to use alternative greener energy sources.
- Scope 2 associated emissions are being addressed by implementing energy efficient practices and upgrading facilities to aid in energy efficiency. We are also using certified renewable energy through the acquisition of verified Renewable Energy Guarantees of Origin, Guarantees of Origin and Renewable Energy Certificates.
In 2024 we achieved a 13.0% reduction in market-based scope 1 and scope 2 market-based GHG emissions, from 17,430 tCO2e in 2023 to 15,161 tCO2e in 2024. Location-based emissions have decreased by 8.4% in 2024, compared to 2023. When normalised for gross revenue, market-based scope 1 and 2 emissions reduced 18.0%, from 36.2 tCO2e to 29.7 tCO2e per £m of revenue.- Scope 3 emissions tracking continues to be developed and explored to ensure we have a clear understanding of these emissions, so that we can plan a clear and effective route to becoming a net zero organisation by 2050.
Reporting
As per our 2023 basis of reporting, Chemring uses a fixed base year (2021), which is a reference point in which current emissions can be compared. In order to maintain consistency between data sets, base year emissions are recalculated when structural changes occur in the company that materially change our tCO2e figures, such as acquisitions or divestments. As such, we have restated the 2021 base year figures, which has resulted in total scope 1 & 2 market-based emissions increasing to 21,646 CO2e (previously published at 20,684 CO2e) and this figure has been reassured by ERM CVS, an independent third party organisation. All references to 2021 base year figures in the Annual Report refer to restated figures.
From 1 November 2024, Chemring will be transitioning from a fixed base year methodology of reduction target and calculation to a rolling base year.
Climate change resilience
We recognise that climate change has the potential to have an impact on our operations, having experienced flooding from a severe weather event at our Tennessee facility in 2018 and wildfires in areas surrounding our Australia operations in 2019. In 2024 we have further developed our climate-related scenario analysis to ensure our scenarios are accurate and up to date with the latest data. To this end we have a significantly more detailed TCFD report this year. We are regularly reviewing the physical and transition risks of global climate change on our operations and supply chain.
Energy use and associated GHG emissions for 2024
Each year we review and update our carbon reduction plans in all our businesses to aid achieving our target of becoming a net zero organisation for scope 1 and scope 2 market-based GHG emissions by 2035.
In 2024 we achieved a 13.0% reduction in market-based scope 1 and scope 2 market-based GHG emissions, from 17,430 tCO2e in 2023 to 15,161 tCO2e in 2024. Location-based emissions have decreased by 8.4% in 2024, compared to 2023. When normalised for gross revenue, market-based scope 1 and 2 emissions reduced 18.0%, from 36.2 tCO2e to 29.7 tCO2e per £m of revenue.
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We engaged ERM CVS to provide independent assurance of our 2021 total scope 1 and total scope 2 location-based and our 2024 total scope 1 and 2 location-based GHG emissions data as well as total scope 2 market-based GHG emissions data. Their Independent Assurance Report can be found on pages 14 to 15of our Sustainability Report 2024. The basis of reporting document can be found here.
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Energy efficiency
In 2024 we continued the move to electrification of our operations and improved our energy efficiency of our operations with a 11.6% reduction of non-electrical energy coming from fossil fuels compared to 2023 figures. We also made great progress in ensuring our electrical energy usage came from certified renewable energy sources with an increase from 70% in 2023 to 78% in 2024.
Scope 3 carbon emissions data collection
This year we have expanded the collection of a subset of Scope 3 emissions in categories 1, 3, 5, 6 and 7:
- Category 1 Purchased goods and services; currently we collect data for water supply only.
- Category 3 Energy and fuel related activities.
- Category 4 Upstream Transportation and Distribution
- Category 5 Waste generated in operations and waste disposal.
- Category 6 Business travel.
- Category 7 Employee Commuting.
We are reviewing the following categories and expect to start data collection during FY25:
Water consumption
In 2024 we used a total of 941,294m3 of freshwater. This is an increase from 2023 of 34,670m3 however this increase in water use is due to increased production in Norway and Australia. The UK and US business units have made a significant combined reduction of 22.7% from 2023 usage through improved leak detection and the repair of water pipes.
None of our operations are in water-stressed regions as defined by the United Nations. Our Australian facility continues to collect and use rainwater that falls on the site for facility needs.
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Waste generation
In 2024, to improve reporting accuracy and transparency we implemented a new recording system for waste collection. As a result, we have captured more data around our waste stream. This has resulted in an increase in our reported waste production across the business units. Of our waste production, only 14% was either sent to landfill or for incineration. This is a 21.3% reduction from 2023 figures.
At our Countermeasures & Energetics businesses we generate unique waste which is often best managed by destroying it at on-site treatment facilities.
With respect to waste management there are two priority areas: the reduction of waste generation and the reduction of waste sent to landfill. To help improve in these areas we are engaging with our end destinations of waste to ensure it is processed and treated in the best available method to ensure as little possible goes to non-beneficial landfill. We aim to update our waste reduction plans as more detailed data from this engagement becomes available.
Land quality
Our facility in Chicago, US, is located on a site which has “superfund” status under the US contaminated land regime. The business continues to work with consultants and the regulatory authorities to ensure that its legal obligations in relation to this matter are fully satisfied.
We incurred costs in connection with environmental remediation of the sites of the munitions businesses formerly owned by the Group in Belgium and Italy in accordance with the terms of sale of those businesses. During the year, the Group increased it’s provision by £6.4m in relation to environmental remediation for the site of the business formerly owned in Italy following progress in agreeing a remediation plan with the local regulator. This is included within disposal provisions of £14.6m as at 31 October 2024. The Group carries a £3.3m (2023: £3.5m) provision in respect of environmental liabilities, which the Board considers to be adequate.