Environment
Environment Policy
The Board acknowledges its responsibilities for ensuring that environmental risks arising from the activities of its businesses are properly identified, managed and controlled, and that its businesses are compliant with all local laws, as well as with best practice – the latter where it is practicable. Each of our two divisions has its own environmental policy, which has been approved by the Divisional Operating Boards and is integrated within existing management structures and implemented through normal business practices and procedures.
These environmental policies address the following areas:
- allocating roles, responsibilities and resources
- complying with legislation and best practice
- monitoring, verification and auditing of compliance
- data collection, analysis and reporting
- risk identification, assessment and management
- communication and dissemination of information
- adopting technology and working practices that are modern, environmentally friendly and energy efficient
- working with customers and suppliers to address environmental issues affecting our businesses.
At Group level, environmental issues affecting the businesses are reported by each Divisional Managing Director to the Board. Environmental risks associated with new businesses are always assessed as part of our due diligence process on all acquisitions. Our operating procedures are reviewed following reporting of any significant actual or near miss incidents involving safety issues or environmental hazards. Operational management also have to certify periodically compliance with local environmental regulations. There were no incidents last year which posed a significant environmental risk to the Group’s operations, and systems are in place to try to prevent their occurrence. These systems are reviewed periodically.
Fleet & Fuel
Menzies Aviation
The division operates various vehicles in connection with its activities. Typically, these are on and off airport activities and include: bussing, trucking (cargo between airports) and air freight couriering by AMI.
The on airport activities involve use of specialist Ground Servicing Equipment (“GSE”) for both our ground and cargo handling businesses. Other than passenger steps and baggage or cargo carts (“dollies”), which need to be towed, most GSE can be driven and run on diesel or LPG. These include: hydraulic loaders, aircraft push back tugs, conveyor belt loaders, and tow tractors which pull passenger steps and dollies. This equipment is not designed to travel long distances so the mileage is low.
We also operate a fleet of 76 forklift trucks for warehouse activity in our cargo handling operations. Of these forklift trucks, 91% run on LPG, the remaining larger machines on diesel and their average age is between 1 and 5 years old.
Our “Connect” bussing operation at London Heathrow has a fleet of 64 single deck passenger buses (2006: 68) that transport some 34,000 workers daily to and from off airport sites to the airport, including Terminal 5 construction workers. This service is under contract to BAA who supply our buses with fuel.
Our UK trucking operation, which includes the AMI business (which consists of mainly forwarder handling and courier and air freight wholesaling) involves a fleet of twenty 38 tonne articulated units with trailers (2006: 20) which transport cargo between airports, mainly in the UK and Ireland. Total mileage for 2007 was c. 1.6 million (2006: 2.2 million miles). These run on diesel fuel and eighteen of the trucks are less than 2 years old. The remaining trucks are due to be replaced during 2008 with Euro 4 standard low emission vehicles, further increasing the fuel efficiency of the fleet. The division also has trucking operations in the USA and in Sweden, most of which are provided through subcontractors.
Menzies Distribution
The business operates 454 vehicles (2006: 437) ranging from light commercial vehicles with a Gross Vehicle Weight of 3.5 tonne or less, up to 26 tonne articulated commercial vehicles. 54% (2006: 47%) of our fleet is made up of vehicles that have a gross vehicle weight of 3.5 tonnes or less. A further 1,173 (2006: 1147) vehicles are operated by contractors in the newspaper and magazine distribution process.
Our fleet comprises diesel only vehicles on a leased basis. Lease terms typically run for between 3 and 5 years, ensuring a modern and efficient fleet. All new additions to our fleet since January 2007 run on Euro IV engines. A MODEC electric vehicle will be added to the fleet during 2008 to be operated in central London as part of our assessment of more eco-friendly vehicles.
Third party contractors carry out some 68% of our delivery mileage. The same focus on costs, regulatory compliance, vehicle suitability and health and safety, which influences the division’s direct operations is also applied in selection and management of such subcontractors. Mileage and related fuel cost is a significant overhead in our Distribution business and we have ongoing programmes to address delivery route scheduling and driver training. Such initiatives continue to deliver success, having received industry recognition and awards. During 2007 we covered 13.6 million miles per annum with our fleet, using 3,010,804 litres of fuel (2006: 3,033,589 litres).
Company Cars
We currently have a fleet of 229 company cars (2006: 243). In addition to lifecycle costing, future fleet structure will reflect relative emissions efficiency, with a commitment to reduction.
Energy Consumption
At Menzies Distribution, energy consumption during the year amounted to 29,660,698 kWh, an increase of 1.3% on 2006. Until October 2007, 26% of the electricity supplied was from “green” sources. Since then, and following the carbon reduction review discussed below, all mainland UK electricity has been procured from fully “green” renewable resources. Due to the international spread of operations at Menzies Aviation, comparable figures are not yet available.
Waste and Emissions
Waste
At Menzies Distribution, packaging waste, namely cardboard and polythene, and office paper are by-products of our activities. We have waste compactors installed in 19 hub Branches (2006: 17). The total volume of waste uplifted in 2007 was 5,747 tonnes (2006: 5,460 tonnes) of which 13.3% (2006: 11.0%) is recycled. Under our contracts with newspaper and magazine publishers, we are responsible for the collection of unsold copies from retail outlets. For magazine publishers, we are further responsible for recycling unsold magazines, whereas newspaper publishers retain the responsibility for managing the flow to recycling of unsold newspaper copies.
Newspaper publishers outsource the physical uplift and recycling from our premises via third party agents with whom we work closely to integrate an efficient transition from our processes to their collection. In 2007, we facilitated the consignment to recycling of 110,000 tonnes of newsprint. For magazines, we are responsible for cleansing the unsold copies of polythene wrapping and cover mounted gifts where this is required to facilitate the subsequent de-inking process. Thereafter we manage a logistics service to consolidate unsold copy from all of our branches, primarily feeding into UPM Kymmene’s Shotton Paper Mill for conversion into future newsprint. All unsold magazine products which are not required for re-sale are consigned for paper recycling. In 2007, some 62,444 tonnes (2006: 60,000 tonnes) of unsold magazines were processed for recycling.
The division also handles unsolds of other products such as collectible partworks and sticker collections. These are sent back to publishers for subsequent reuse. The waste elements stripped from magazines to cleanse pre recycling are currently consigned to landfill. Menzies Distribution is active in industry initiatives aimed at reducing the volumes of such material to landfill and supporting initiatives to increase consumer awareness of the magazine recycling opportunity.
Carbon Reduction
During 2007 Menzies Distribution set out to establish its direct carbon footprint and (1) benchmark this in relation to the newspaper and magazine supply chain overall and (2) establish how our footprint has evolved over recent years. The exercise proved revealing and endorses the strong link between operational effectiveness and environmental impact. The division’s internal work was supported and reviewed by a team from Heriot Watt University and their academic partners in the government funded “green logistics” project for which it is an early case study on the practicalities of foot-printing in the distribution sector. Menzies Distribution were also supported by PIRA, the paper sector consultants, in pioneering a high level supply chain analysis, the principles of which are now being adopted for further in-depth collaborative supply chain analysis aimed at total commitment to business efficient carbon reduction.
Menzies Aviation plans to carry out a similar exercise during 2008.
Menzies Distribution prime exposures are (1) warehouse energy usage and (2) vehicle diesel fuel. Whilst business territory gains have inevitably pushed absolute footprint up to around 37,000 tonnes of CO2, past attention to warehouse design, operations and to route scheduling has supported a reduction over time in CO2 per tonne handled and miles run, of around 15% over the previous 5 years. Following the electricity switch mentioned above, further pilot activity supported by Carbon Trust is expected to lead to opportunities for some absolute energy reduction in warehouses.