Environmental, Social and Governance ("ESG") Committee Report

We have always worked to ensure that our ESG strategy is closely aligned to our Company goals and values.

Helen Jones

Chair of the ESG Committee

Chair's Letter

In the last year we have evolved our Environmental, Social and Governance ("ESG") commitments into a more broadly based series of sustainable business initiatives, measures and targets.

Our new ESG strategy has been developed under the three strategic pillars of Inspire, Support and Lifetime.

The Inspire pillar includes our 'North Star' ambition to champion the shift to electric smart travel through education, engagement and community support.

In line with our commitment to support customers through a lifetime of motoring and cycling we undertook to set an example by making a lifetime commitment of our own – to make our business carbon neutral by 2050.

Helen Jones

Chair of the ESG Committee

6 July 2020

FY20 Key Achievements

development of a new ESG strategy aligned with the three strategic pillars of Inspire, Support and Lifetime;
agreement to adopt a North Star commitment – to champion the shift to electric smart travel;
adoption of commitment to achieve carbon neutrality by 2050; and
agreement to develop a Science Based Targets framework to create a roadmap towards the net zero target.

Areas of Focus in FY21

adopting a coherent set of measures and targets across all three pillars of our strategy;
implementing measures necessary to make progress against the Science Based Targets;
publishing our Scope 3 emissions baseline; and
initiating campaign to champion the shift to electric smart travel.

ESG Committee meetings held

Committee Composition and Meetings

The Committee consisted of:

Helen Jones (Chair)
Graham Stapleton
Andy Randall
Michelle Burton (appointed September 2019)
Clare Moore (resigned July 2019)

The Company's Chairman, Keith Williams, whilst not a member of the Committee, attends the meetings upon the invitation of the Committee Chair. During the year, the Committee appointed colleague representatives from different areas of the business who were invited to attend the meetings.

There were two Committee meetings held during the year and after each one, I reported to the Board on the key issues that we covered. I held informal discussions between Committee members and business leaders throughout the year as the need arose.

Activities Undertaken

During the year the Committee:

evaluated ESG strategies of peer group companies to help inform our thinking;
adopted a new ESG strategy (see below);
researched and evaluated candidates for a 'North Star' sustainability objective;
set the parameters for an environmental audit and appointed Trucost to establish the baseline for Science Based Targets towards the goal of achieving carbon neutrality by 2050;
evaluated plastic and other waste recycling programmes;
reviewed our bike recycling partner;
reviewed partnerships and charity support in light of new ESG strategy; and
appointed colleague representatives to the Committee.

Further information on ESG around the Group, including environmental details on emissions, can be found in Our ESG Strategy of the Strategic Report.

Developing the ESG Strategy

The ESG Strategy has been developed to align with the three strategic pillars of the Company's Strategy, these being; Inspire, Support and Lifetime.

Looking Ahead

In FY21 we will publish Science Based Targets for reductions in our Scope 1, 2 and 3 emissions and make further progress on recycling and plastic-use reduction. We also plan to initiate a campaign to help consumers make the switch to electric, this will involve further investment in products and services, the roll-out of consumer education programmes, and lobbying the Government on E-scooter legalisation.

Helen Jones

Chair of the ESG Committee

6 July 2020

The Terms of Reference for the Committees are available at www.halfordscompany.com