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Pulling the tab for change

Pulling the tab for change

EMR seeks to support manufacturers' carbon-cutting agendas.

Our sustainability drive is coming from the top – that’s the most important thing.

Edwin Leijnse

Group CFO/COO, European Metal Recycling

European Metal Recycling

European Metal Recycling (EMR) has its roots in a traditional scrap metal firm founded in the 1950s1. Today, it is a global business with a mission to be a leader in sustainable materials. From tin cans to aircraft carriers, the company recycles around 10 million tonnes of steel and non-ferrous metals annually.2

EMR sees the potential to make an impact by delivering new, low-carbon and high-quality materials for its customers, including manufacturers who aim to create the next generation of sustainable products. One of its business streams is supplying reusable steels from end-of life buildings to the construction industry, and the firm also offers a range of recycled polymers with a carbon footprint vastly smaller than virgin plastics.3

How is EMR collaborating to meet their sustainability goals?

Since its inception, EMR was clear that its sustainability drive needed to go hand-in-hand with profitability. “Commodities businesses generally work on very low margins, and the cost base is very important. We said very clearly when we started this journey that we didn’t want to lose money,” says Edwin Leijnse, Group Chief Financial Officer and Chief Operating Officer.

Edwin urges businesses that have yet to fully embrace sustainability to take the first step of accepting that it is now becoming more fundamental to success. “The sooner you start, the easier it’s likely to be.”

Experts on hand

The company appointed a sustainability manager in 2020 to support their strategy. "We have an internal consultancy company, and we also use external companies to check and validate our work. That helps us pick up things we hadn’t thought of,” says Edwin.

Staff buy-in

Harnessing the enthusiasm of the company’s 4,000 employees is also key. Proactive partners help to make this happen, says Edwin: “People in the field are getting queries from customers and suppliers about what we’re trying to achieve. That helps in cascading things down.”

Joining forces

The company also collaborates wherever possible, both with value chain partners and expert bodies. For instance, it benefits as a member of the 800-strong network formed by non-profit The Climate Group, and has signed up to its standards on renewables, electric vehicles and energy productivity.4

A snapshot of EMR’s journey so far

Scope 3 emissions are those within a company's value chain which are not produced by the company itself, but for which they are indirectly responsible for producing. These result from activities undertaken both upstream and downstream in the value chain - for example, the emissions produced by suppliers when manufacturing parts for the company, and by logistics providers in distributing the finished goods. The exception is emissions produced by power suppliers, which are labelled as Scope 2 emissions.

EMR’s route to decarbonisation

It’s only relatively recently that customers could be seen to place more value on the company’s work, recognising how it could support their decarbonisation strategies.

CEO, Chris Sheppard, put sustainability at the forefront in 2020, after he was asked to join the Council for Sustainable Business, a group advising the UK government. At that point, EMR devised its own strategy, with the aim of reaching net zero carbon by 2040.5

EMR’s leaders set targets, opting to earn validation by the Science-Based Targets initiative6, to assure themselves and stakeholders that their efforts were meaningful. Switching to renewable energy and replacing diesel cranes with electric ones were among the early “low-hanging fruit” picked off by the business.

Another early priority was the implementation of energy management systems in EMR’s 150 facilities across the world. “We started with the ones that were most energy-intensive,” says Edwin. “We needed to get the baseline right to be able to start understanding and improving our consumption.”

Creative partnerships with supply chains

Adoption of electric vehicles is gaining momentum in the UK. In 2023 over 193,000 new battery electric cars were registered, bringing the estimated total of battery electric vehicles on the UK's roads to around 860,0007. EMR, however, is already looking ahead to the point when these new cars will be scrapped and their parts recycled.

“Recycling lithium batteries isn’t a large scale focus yet,” explains Edwin. “It will likely mean an enormous change to our industry, but we have time to think about it, because a car produced today is only be likely to be recycled in 15 to 18 years’ time.”

EMR has launched two partnerships with the automotive industry, creating circular supply chains for EV batteries, and for the magnets in EV motors. By building innovative new supply chains together, the company aims to ensure that, wherever possible, vital metals are reused while partners progress towards net zero goals.

Collaborating in this way can require counterintuitive thinking, says Edwin: “Sometimes a product change might result in more carbon emissions from EMR, but the emissions savings for the customer could be a multiple of that. It’s about reducing carbon for the total supply chain.”

Innovation upstream and downstream

In common with one in three of the businesses in our research, EMR sees brand differentiation as a driver for their Scope 3 emissions commitment. Also, with this in mind, the company has set up an innovation centre in Birmingham. There, small-scale recycling machines are used to test ideas and optimise processes that will generate new, reduced-emissions products for customers. In this way, the ‘downstream’ elements of the company’s Scope 3 emissions are constantly being improved.

Progress in the upstream part of the chain can be seen as more challenging. EMR estimates it has over 10,000 suppliers and is working to ensure they too are aligned with its values and targets.

The company also works with partners to reduce transport impact. For example, it runs freight trains several times a week to ferry material to its Liverpool Docks site. Onward transport from there is harder to influence, but Edwin is optimistic that proposed European legislative changes could be beneficial for shipping vessels.

Working with Barclays

A decade ago, meetings between business leaders and banks were strictly limited to finance issues, Edwin recalls. Today, EMR’s regular meetings with Barclays cover a broad spectrum of business topics, not least sustainability.

We have a very long relationship with Barclays and they have always been very supportive of our business from a sustainability viewpoint.

Edwin Leijnse

Group CFO/COO, European Metal Recycling

“For example, we are widening the voluntary environmental disclosures that we make in our annual accounts, to provide more clarity to stakeholders. We asked Barclays’ sustainability department to give us feedback on those disclosures. It’s a continuous dialogue.”

EMR also makes use of tailor-made Barclays trade and working capital products to support its investment in innovation, manage risk and ensure smooth overall cashflow.

“We sometimes have to wait a bit longer for VAT refunds, so Barclays finances that through a specific receivable financing facility,” says Edwin. “It helps us in managing the peaks of our working capital.

“Also, we pay suppliers relatively fast, and our customers have longer payment terms, so our working capital can fluctuate with commodity prices; it’s important that Barclays understands and supports us with that.”

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