Examples of Supplier Engagement in 2021

Energy Efficiency and CO2 Reduction

For approximately 10 years, NSG Group has been implementing a globally co-ordinated and supported energy efficiency program across its operations. Procurement together with other central resources from Research and Development, Manufacturing Excellence and local management teams are focused on reducing our energy consumption and costs across the entire Group. In October 2019, in alignment with the Paris Climate Change Agreement, NSG Group committed to Science Based Targets (SBT) to reduce absolute Scope 1 and 2 CO2 emissions from glass manufacture by 21% of CY2018 baseline levels by 2030. In May 2022 SBTi accepted NSG Group's further commitment to reduce absolute Scope 1 and 2 CO2 emissions by 30% by 2030 together with a commitment to reduce absolute Scope 3 CO2 emissions by 30% by 2030. Both of these targets are compared to 2018 baseline.

Please refer to the "Roadmap to Carbon Neutrality".

Scope 3 emissions include other CO2 emissions in NSG's value chain, for example, raw materials, transportation, services, business travel, employee commuting, emission by our Joint Venture investments and certain emissions by our customers in the processing of our glass.

Scope 3 CO2 emissions

In 2017, NSG Group started the process to improve the quantification of its Scope 3 emissions. The 2021 Scope 3 emissions can be seen in the table above. In 2021 we established a new project focused on Scope 3 emissions increasing engagement with key suppliers to better understand the CO2 in our supply chain and to identify and share best practices with our partners. One outcome is improved data collection which has led to increased Scope 3 emissions reported in 2021 vs 2020.


Energy represents one of the largest spend areas for NSG; In CY21 it was 20% of the total Procurement spend for the group. In addition, scope 1 and scope 2 energy consumption represents 53% of the CO2 emissions of NSG Group. The Energy and Carbon Management programme has continued with a number of new energy and water efficiency projects implemented.

A significant upgrade of the site lighting at NSG Group's European headquaters and technical centre in Lathom, UK was undertaken. State-of-the-art lighting technology offering greater control, reliability, energy savings and a significantly lower environmental footprint have been achieved. In the spirit of sustainability, the Lathom site is using the partner's innovative 3D-printed downlights throughout the facility. These custom-made lights are fully recyclable, reduce waste and contribute to a circular economy. Manufacturing requires far less energy and materials, resulting in a 70% lower carbon footprint compared to traditional aluminium die-casting processes.

In 2021 the proportion of the Group's electricity coming from renewable sources grew to 26%, an increase of 1% vs 2020. The commitment to increase this to 50% by 2024 remains. During 2021 NSG Group signed its first offsite Power Purchase Agreement's (PPA) covering approximately 25% of electricity demand in Argentina. A further offsite PPA was signed in late 2021 for implementation in January 2022 for a project in Poland which will reduce annual carbon emissions by approximately 80,000 tonnes per year. Additionally, renewable electricity certificates were purchased in Brazil to complement existing projects to further reduce scope 2 carbon emissions by approximately 10,000 tonnes per year.

Renewable electricity is being used to support Scope 1 emission reductions through the use of an electric boost system in NSG Group's float line at the Gladbeck site in Germany. Here natural gas consumption is offset via electricity to support lower carbon product manufacturing. In addition, the glass melting process is improved, the glass flows are stabilised and the glass quality is improved at the same time.

Construction was well underway on a new onsite solar PV project at NSG's site in Rossford, USA. This 1.4MWp installation will provide zero-carbon electricity for the sites processes and utilises solar modules from NSG Group's customer First Solar therefore dmeonstrating products from within NSG Group. The project will be operational in May 2022.

A 5MW / 10 MWh battery energy storage system was fully commissioned at NSG Group's automotive site in Collingwood, Canada in September 2021. This project will support carbon and cost objectives by adjusting the sites consumption profile throughout each day.

World first trials were undertaken in the UK with the use of hydrogen in August 2021 and then biofuel in February 2022 in place of natural gas in NSG Group's float furnace. These trials were used to learn about how such alternative fuels can be used in future decarbonization plans. Both were supported by the UK government's Industrial Fuel Switching programme.

Synergies with Strategic Raw Material Suppliers

Batch Materials used in the manufacture of 'Float Glass' represent around 10% of total Procurement spend. The manufacture and processing of raw materials contribute 975 thousand metric tonnes of scope 3 emissions or 15% of total NSG Group CO2 emissions. Of the total CO2 emissions from any given float line, on average, around 17% comes purely from the decomposition of carbonate raw materials, with the remainder coming mainly from the melting of these and other raw materials, including cullet, to make glass, and a smaller amount from the forming and annealing processes. Evaluating alternatives to carbonate raw materials has, therefore, been a key focus in NSG's efforts to reduce the CO2 emissions from glassmaking and achieve our Science Based Targets (SBT).

Low carbon raw materials

NSG has a dedicated Decarbonization Technology Team in R&D that work directly with Procurement to identify viable low carbon batch materials that can be used to minimise CO2 emissions and reduce the energy required for melting. In early 2022 NSG completed a successful large scale trial of calcined dolomite on a float line in South America. In collaboration with an existing dolomite supplier and a new company which specialises in high quality calcination, NSG was able to approve a suitable material with the right specification and characteristics for float glass manufacture. This material was then used directly for glass manufacture in increasing volumes up to 100% over several days. In addition to reducing the CO2 input to the furnace there can be additional benefits of fuel savings and reduced raw material volumes resulting in lower transport requirements, which will reduce the overall CO2 burden further. Subsequent trials of calcined dolomite are now being planned at other NSG sites in order to validate the initial results and assess fully the process and safety requirements in order to use this solution on a more permanent basis.

NSG is using new analytical methods which allow us to directly quantify the melting energy requirements of new materials relative to our existing raw materials. The results of this data gathering and analysis will lead to new proposals for an optimised suite of raw materials to achieve the desired glass properties, whilst minimising CO2 emissions and input costs. One such material under evaluation is processed blast furnace slag. This has the potential to reduce the CO2 input and also reduce energy consumption during glass manufacture. Samples of this material have been analysed and evaluated as suitable to progress. A large scale trial is being prepared for the second half of 2022.

Small changes are also being made to recipes of existing materials to decrease the amount of carbonate raw materials used or reduce the fuel requirement to melt the batch. This has necessitated improved methods of data analysis to understand these smaller, but still significant, effects on Scope 1 CO2 emissions.

NSG have a dedicated project to increase the proportion of cullet used in the batch. Cullet is scrap glass that is generated during glass manufacture but also from customer processing or return of end of life units. Use of cullet as part of the batch can lower the melting temperature and reduce the carbonate containing material requirements. Trials are underway to use more returned cullet, particularly from NSG Automotive tertiary glass production that previously has not been approved for use due to contamination risk. With improved sorting and cleaning technology this could be an additional support to reducing energy and CO2.

Reduced carbon in the Supply Chain

NSG continue to work closely with key suppliers to reduce carbon in their supply chains. Fossil fuels historically have played a key role in the production of soda ash. Soda ash acts as a fluxing agent during glass manufacture, playing a vital role in reducing the furnace temperature necessary to melt silica and therefore reducing the energy required. However, the production of soda ash also releases a significant portion of CO2 into the atmosphere. One key supply partner to NSG has committed to similar CO2 reduction targets as NSG and has moved several of their manufacturing process to alternate fuels, significantly reducing the CO2 emissions. NSG is also investigating options for onsite hydrogen generation with carbon capture technology to reduce the CO2 impact from bought in gases. Through these strategic partnerships, NSG expect continued progress towards minimising CO2 in their supply chain.

Transport & Warehousing

Transport and Warehousing activities account for 13% of the NSG Group's total procurement's spend across its global operations (4% warehousing : 9% transportation).

Regional breakdown as follows: European road transport account for 47%, SEA & India 2%, Japan 15%, and the Americas 36%.

The supplier engagement on CO2 reporting currently equates to 71% coverage in Europe (primarily through bulk Float Glass carriers known as 'innenlader's' under 3rd party logistics control), 37% coverage in Japan and 39% in North America. From these engagements we now collate detailed distance travelled data.

Emphasis in 2021 was on improving efficiency, reducing empty driven miles and driven miles, making a modal shift from road to rail, ship or barge and increasing the relative payload of product carried. All of these initiatives will reduce our environmental impact.

The European road transport supplier costs account for 45%, SEA accounting for 17% and the Americas accounting for 38% of the Global Group road transport spend. The supplier engagement currently equates to 71% coverage in Europe, 37% coverage in Japan and 39% in North America. From these engagements we now collate detailed distance travelled data.

In Europe a key objective has been to drive sustainable improvement through selection of a strategic haulier base under the subsequent management of an external 3rd party provider. This facilitates haulier and lane management oversight, better governance of empties return and triangulation of flow. In Europe this is a continuous and fluid work in progress between NSG operations, 3PL control tower and forwarders. Working across multiple NSG Business Units, ensuring we have standarised trailer types, bringing in automation based freight management solutions, we are in the position to firstly identify and secondly drive synergies across our distribution profile.

Our North American automotive business has a return ratio approx 5:1. We have worked with our carriers to identfy return shipments in order to reduce one-way shipments with our product. This process has worked well in 2021 following a move away from our 4PL logistic provider to several smaller carriers (Over the past 15 years, our 4PL provider had identified their own backhauls for those routes).

We have continued to increase payload for bulk Float Glass road carriage by reducing TARE weight of the tractor and trailer units on larger proportions of the dedicated fleets. Thus increasing the potential carrying weights and number of glass packs. Working with our operations teams we ensure the payload is maximised with the result of approximately 92% achieved in 2021 vs 2020. Re-routing of supply has also reduced distances driven by the fleet by some 60km per trip on average in central Europe.

Moving freight and raw materials by train instead of truck we can reduce greenhouse gas emissions by up to 75%. In Europe we have been working very closely with our 3PL Logistic provider to increase intermodal solutions. We have increased the use of intermodal movements between our auotomotive operations, San Salvo (IT) to Poland and San Salvo (IT) to Witten (DE) in testing market conditions. The shift from road to rail is being expanded on by reviewing and adjusting loading hubs and investigating hub and spoke intermodal network opportunities proximate to customers from key distributing plants. We are also working on expanding our intermodal supply base to increase, improve and speed up the modal shift. In North America in FY22 all routes that qualified for intermodal traffic were converted from "Over The Road" to Intermodal.

In North America our Automotive Glass Replacement Division routes their shipments from Distribution Center to Service Centre for the most optimal routes and then publishes those to the respective 4PL provider to ship. For return SOPs (crates) a system specifically designed for Pilkington North America was implemented to set up efficient backhauls. This system gathers a weekly report from all service centres of what they have to return and optimizes the routes. We also utilize intermodal returns from our Florida/Georgia service centers to Mexicali.

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