Metair’s most significant impacts on natural capital and the environment are through our carbon emissions, energy consumption, water consumption and the waste produced in our manufacturing activities and recycling facilities. Taking a responsible approach to managing our impact on the natural environment aligns with our core social and ethical values and helps to build social and relationship capital with customers, communities and regulators. Failure to adequately manage our environmental impacts risks reputational damage, fines and the loss of our social licence to operate.
Environmental issues are monitored by our social and ethics committee (of which our CEO is a member), which then reports to the board. At operational level, environmental management forms part of the safety, health and environment (SHE) function.
We believe that formal measurable and auditable systems are of utmost importance to allow objective measurement of performance against world class standards. All of the group’s subsidiaries are accredited under ISO 14001 (environmental management) and are in the process of implementing ISO 50001 (energy management).
Metair is committed to making a contribution to addressing the issue of climate change. Increasing global concern about the impact of climate change resulted in stringent motor vehicle emission regulations, led by the EU. These have a direct bearing on the automotive industry, our OE customers and the vehicles they produce. Greenhouse gas emissions from transportation are estimated to contribute around 14% of global emissions1. Metair’s energy storage vertical is well positioned to support reduced motor vehicle emissions in the short-term through our Start/Stop battery technology and in the longer term through our next generation of automotive energy storage systems. Energy storage solutions also play an important role in alternative energy production, such as solar systems.
Potential direct impacts of climate change on our business include the effects of extreme weather on distribution chains, increased risk of tooling for new projects being lost while shipped due to severe storms and increased energy costs in cooling manufacturing processes.
In 2019, the group conducted an internal survey across all subsidiaries to establish the impact which significant environmental climatic events have had on our operations. The survey also sought to develop insight on how our subsidiaries’ business models operations will be influenced by climate change in the future. The survey explored the different initiatives and transformation efforts which our autonomous subsidiaries have introduced and implemented to address climate change. The survey further aimed to investigate the trends around climate change which are being driven by the market and through our stakeholders. Lastly, Metair received feedback from subsidiaries on how to enhance the group’s approach and response to climate change.
In line with our governance philosophy to report transparently, Metair has disclosed according to the Task Force for Climate-Related Financial Disclosure (TCFD) principles and guidelines. A summary of our TCFD disclosure is included on our website.
The manufacture of batteries in our energy storage segment consumes carbon dense materials and is an energy intensive process. Downstream logistical costs are higher at First National Battery due to the spread of its operations over a relatively wide area. The three battery manufacturing operations – First National Battery, Rombat and Mutlu Akü – combined contribute 70% of the group’s carbon footprint.
Given that just over 86% of the group’s carbon footprint is attributable to the consumption of raw materials, electricity and stationary fuels, our focus on optimising manufacturing efficiencies (including energy use) and reducing waste is also the most effective means for reducing our carbon footprint.
The group consumes energy in the form of fuels such as petrol and diesel, gases and electricity. Electricity is a key input in both our manufacturing facilities and our costings. Our focus on manufacturing excellence includes improving production efficiencies to use machinery and energy more efficiently. This is achieved through initiatives such as redesigning processes to improve efficiencies, installing more energy efficient machinery and maintaining a high awareness among employees about the need to increase energy efficiency.
Examples of initiatives to improve energy efficiency in our operations include:
- Installing more efficient variable speed compressors
- Installing energy efficient LED lighting and daylight sensors
- Resizing capacitor banks and electrical motors
- Insulating cooling tanks, pipes and pumps
- Training and awareness of staff
- Implementation of ISO 50001 energy management systems across operations by the end of 2018
- Resizing boilers for water heating
Minimising waste from production processes is an important aspect of improving production efficiency and sustaining manufacturing excellence. Scrap reduction targets are set at each subsidiary for primary and secondary materials and the yield on lead recycling and plastic recycling percentage are tracked as measurement criteria for waste management.
Waste is reused or recycled where possible, with the remainder being separated into waste streams at most operations. Waste is disposed of in a responsible manner and in compliance with legislation. Hazardous waste is disposed of using registered disposal companies.
Lead acid car batteries are nearly 100% recyclable. Battery acid is neutralised and processed through an effluent plant. Plastic from the casing is processed into pellets and used to make new battery casings. Battery plates, terminals and other extracted lead are refined and blended to produce high-quality lead alloys for new batteries. Recycling batteries removes plastic, lead and acid from the environment, all of which are potentially harmful substances. Recycled lead is cheaper to access, saves energy and reduces emissions as it uses around a third of the energy needed to produce virgin lead from ore.
First National Battery, Rombat and Mutlu Akü all have recycling plants.
Our goal as a battery manufacturer is to take more lead out of the environment than we put into it. We incentivise customers to return old batteries when buying new ones and dispose of non-recyclable components in a responsible way. In 2016 the group recycled nearly 75 000 tonnes of lead.
Water consumption is calculated from municipal meter readings, corroborated by readings from internal meters where these are installed.
Battery manufacturing uses a lot of water and the three battery operations together account for 71% of group consumption. We recognise the increasing risk to business of poor quality or interrupted water supply.
- Various water saving initiatives are in place at our operations, including:
- Rainwater collection tanks at First National Battery’s Fort Jackson and Buffalo View facilities, which supply cooling towers, battery washing machines and toilets.
- Smiths Manufacturing uses a reverse osmosis water purification plant to recycle and recover 90% of the water used in the wet fluxing and evaporation coating processes.
- Supreme Spring has installed meters in paint lines to monitor water consumption and enforce reduction in water usage.
- Lumotech harvests rainwater for use in its processes and recycles waste water from the cleanroom humidifiers and pump plant. Effluent water from the spraying process is stored for reuse.
- Across operations, leak identification and repair is a priority.
The stringent environmental regulatory regimes in Europe and Japan that apply to our OEM customers mean that we’re required to clearly understand and closely monitor the environmental impact of our products. Initiatives such as the Global Automotive Stakeholder Group focus attention on the environmental impacts of substances in automotive parts. We carefully monitor the material makeup of our products so that we adhere to these requirements and thereby mitigate the environmental impact of them. Raw material inputs and processes are adjusted to ensure that we maintain compliance as environmental legislation continues to develop.
Our OE products end up as components in vehicles that may be manufactured in, or exported to, other countries and we therefore have limited ability to reclaim products or packaging from end users. End of vehicle life regulations, such as the end-of-life vehicles directive in the EU and similar legislation in Japan, US and other countries, are driving the reduction of waste arising from end-of-life vehicles.
Given the strategic nature of lead as an input for our energy storage businesses, we prioritise recycling of used batteries in all our markets, which reduces potential environmental impacts.
Certain brake shoes imported from China by ATE were found to be contaminated with a negligible percentage of chrysotile asbestos. All brake shoes were recalled, most of which were still in ATE’s warehouse. The National Regulator for Compulsory Specifications will inspect all of the goods before they are sent back to the manufacturer.
During the preparation of an environmental clearance certificate at ATE, chrome 6 was discovered in the ground, which is likely from the chrome plating facility that historically operated on the premises. The affected area was rehabilitated, with the contaminated rubble disposed of at a class one dump site by an accredited subcontractor as per the environmental regulations. ATE ceased chrome plating in 2012 and the facility was dismantled and the equipment discarded at that time.
As a component manufacturer that supplies participating vehicle manufactures, Metair aims to ensure that all components manufactured across the group have a positive life-cycle and an end-of-life impact on the environment. This can be achieved by controlling and eliminating the use of Substances of Concern (SoC). As such, we are committed to monitoring the chemical composition of our products and to begin submitting full material declarations (in line with the IMDS) for all the components we manufacture in 2020.
Compliance with safety, health and environmental (SHE) laws is one of the pillars of Metair’s Code of Ethics and is integrated into our operating practices. We wholly support and aim to comply with or exceed the requirements of current environmental legislation and codes of practice. Environmental policies and processes in place at our operations support compliance to local environmental requirements.
The strict environmental laws in Europe and Japan that apply to our OEM customers apply equally to the components used to make their vehicles. We therefore have to ensure that we clearly understand and closely monitor the material makeup and environmental impact of our products and their constituents. Industry initiatives such as the Global Automotive Stakeholder Group focus attention on the environmental impacts of substances in automotive products.
End of vehicle life regulations, such as the end-of-life vehicles directive in the EU and similar legislation in Japan, the US and other countries, aim to reduce waste arising from end-of-life vehicles. Metair’s ability to reclaim products or packaging from end users is limited because our OE products end up as components in vehicles that may be manufactured in, or exported to, other countries.