As well as helping our customers to reduce their impact on the environment, this is also a focus for our own efforts and we monitor the use of key sources of energy (electricity, gas, oil and steam) in our efforts to reduce consumption and save costs. The charts opposite show our performance.
Although our use of water is not material, we are conscious of growing concern about the availability of fresh water and the increase in some areas of shortages and droughts due to changing weather patterns and the impact this may have on business. For this reason, we monitor water consumption carefully throughout the Group and endeavour to reduce our usage wherever possible. We are also helping our customers to improve water purification systems to make fresh water available more easily and cost-effectively. The case study opposite shows one project we are involved in with a water treatment company.
Overall CO2 emissions in absolute terms are slightly higher, due to increased business activity during the year and the impact from acquisitions made in 2015, but internal efficiencies and higher sales have resulted in total carbon emissions per £m revenue decreasing by 8%.
In January 2016, the GHG Protocol released the Scope 2 Guidance: an amendment to the Corporate Standard. Currently, all Scope 2 emissions by Spectris Group are calculated using the ‘location-based’ method. The Guidance suggests that companies may use source or supplier-specific emission factors, known as the ‘market-based’ method. This method requires companies to use specific emission factors or fuel mix information (i.e. the sources used to generate the electricity) from their electricity suppliers. Spectris has engaged with UK electricity suppliers to begin gathering this data as part of our continuous improvement to greenhouse gas reporting and we are looking at the feasibility of obtaining this information for our worldwide operations.
In the meantime, we have calculated Spectris UK-based companies’ emissions using both methods for 2016. Using the market-based calculation, UK emissions from electricity use would be 39% lower. These emissions savings have not been included in the total figures disclosed and are based on a developing calculation methodology.
During 2016, we conducted further audits in line with Article 8 of the European Energy Efficiency Directive (‘EED’), which is known as the Energy Savings Opportunity Scheme in the UK, as the legislation was implemented in further European countries. The audits have identified opportunities for energy reduction and our operating companies are now progressing these initiatives.
Although we have not set specific Group-wide targets, our objective is to reduce energy consumption across the Group. Management incentives are in place which encourage individual operating companies to reduce their electricity and water consumption, for example, in order to improve profitability, and the opportunities identified by the EED audits will also help to reduce energy use. Our Servomex business has committed to reducing its carbon footprint (in terms of emissions) at the Technical Centre in Crowborough, UK, by 5% year-on-year and has achieved certification by the Planet Mark for its commitment to improve sustainability performance. Our newly-acquired business, Millbrook, has a contract with its energy provider to source 45% of its electricity from renewables (compared with the average for the UK of 19%).
We have been a constituent of the FTSE4Good Index Series, which analyses the performance of companies for environmental, social and governance practices, since it was founded in 2001. In the December 2016 review, our FTSE Russell ESG rating absolute score improved from 2.7 to 3.1 out of 5, and our supersector relative percentile score increased to 73 out of 100 (2015: 53).
In 2016, we ceased to participate in the Carbon Disclosure Project (‘CDP’) as we are confident that the systems that we now have in place for measuring and monitoring energy usage underline our commitment to environmental accountability and enable us to provide independently-verified public disclosure of our emissions on an annual basis. Our score of 98 out of 100 in the 2015 CDP survey (for the 2014 financial year) placed us in the top 15% of companies in our sector.