Portmeirion Group – a business with a proud history and commitment to playing our part in delivering a more sustainable world.

We strive to do business ethically and sustainably – for our shareholders, the environment, our people, our customers, our suppliers and the communities we operate in. Portmeirion Group has a long history of innovation and creativity. This has underpinned our celebrated designs and approach to driving continuous improvements.

  • Joined an active role in the “British Ceramics – towards Net Zero” initiative.
  • Developed kiln waste heat recovery system to reduce energy consumption in firing process.
  • Changed application of back stamp techniques to reduce kiln firings and improve process efficiency (400% additional throughput in one hour for one work stream).
  • Automated the loading of ware to improve the consistency of glazing and reduce the requirement to re-fire.
  • Electric vehicle charging points installed to assist in reducing associated carbon emissions.
  • Trained 19 employees as Mental Health First Aid Advocates recognising the national statistics in this risk area.
  • Positive HSE audits reflecting commitment to health & safety of our employees and pandemic work practices.
  • At least 98% average “in favour” proxy votes from shareholders on each resolution at 2021 AGM.

PMP_AR21_AR-P27-1.svgReducing CO2

In 2021, we conducted a detailed external review of our current ESG baseline to inform future strategy for improvements.

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↓-12%*

UK Ceramics – tonnes of CO2e per tonne of saleable product

↓-12%*

UK Home Fragrance – tonnes of CO2e per tonne of saleable product

47%

of energy used at Wax Lyrical operation in 2021 was provided by wind turbine

In 2021, all UK operations were accredited at Investor in People Platinum status; a level only held by the top 4% of accredited organisations.

* 2021 compared to 2020.

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There is

O% waste

going to landfill from the Stoke-on-Trent operation

80%

of the 837 tonnes of waste generated is recycled and usually repurposed into a secondary use with the rest being incinerated (waste to energy) at a plant in Runcorn.

The Group has a history of innovation, including its energy efficiency measures and is proud of our highly effective environmental management system that has, to date, been particularly focused on reducing energy consumption and the treatment of waste as part of our own manufacturing processes.

Almost half of the energy used at Wax Lyrical’s production site continues to be generated by our wind turbine; reducing the carbon emissions of our operation in Cumbria by nearly 30%. In addition, a series of innovative solutions originated by colleagues and deployed in our factories and distribution centres are combining to reduce the carbon intensity of our operations. In due course, we are planning further work to develop carbon intensity metrics for products produced in both our directly managed and outsourced manufacturing settings.

Because the ESG agenda is already culturally embedded in the Group, ongoing research into reducing packaging and distribution miles of products sits at the forefront of the design, operational and customer management teams. We recognise that the ceramics industry of which the majority of the Group is part of, is an energy intensive business.

Portmeirion Group has a clear focus on our regulatory and reporting obligations and will continue to adhere to the highest standards. However, the Group recognises that our achievements to date represent a foundation from which we can adopt a proactive approach and do much more than ticking the compliance box.

We proactively look to ways of encouraging and supporting the decarbonisation of the UK energy system (particularly industrial heat) to meet the legal commitments the UK Government has set – both with regard to 2050 Net Zero strategy but more importantly in relation to the more challenging 68% reduction (on 1990 levels) by 2030.

Portmeirion Group has joined the ‘British Ceramics – towards Net Zero’ initiative, is collaborating with other partners in the value chain and working with leading universities to be at the forefront of the technological developments that will be needed to stay within the limits set by the 2015 Paris Agreement.

Of course, while working at an industry scale and progressing local initiatives to reduce our own carbon emissions as much as possible, we recognise that some offsetting of residual emissions will be required and we will explore options to offset our own manufacturing emissions as a first step on the journey.

We already have a good level of engagement with our supply chain and some very strong partnerships that have contributed to the Group’s story of success. We have improved data transparency during 2021 and intend to go further. However, from gaining a deeper understanding of the Group’s supply chain (including Tier 2 and Tier 3 suppliers of direct and outsourced manufacturing), to customer engagement and a review of logistics, 2022 will mark an important year for Portmeirion Group to accelerate our plans on sustainability. Being an international business, the Group is taking a global approach to a global challenge and will be sharing a more detailed plan later in the year.

Streamlined Energy & Carbon Reporting (SECR)

From a regulatory perspective the Group continues to report on its annual UK energy use, associated greenhouse gas (GHG) emissions and information relating to our energy efficiency action, in accordance with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. In the interests of transparency, this year we have split out our reporting for our two manufacturing sites – our ceramics factory site in Stoke-on-Trent and home fragrance and hand care site in the Lake District.

We are very proud to report a reduction in tonnes of CO2e per tonne (of saleable product) for both sites.

This table details GHG Emissions and Energy Use Data for the period 1 January 2021 to 31 December 2021 for both Stoke-on-Trent (ceramics) and Lake District (home fragrance and personal care).

The methodology to calculate energy and GHG emissions data is in accordance with the GHG Reporting Protocol – Corporate Standard and SECR guidelines.

The following data sources have been used for the report:

  • Electricity – metered kWh consumption taken from supplier invoices;
  • Transport Scope 1 – emissions have been calculated based on mileage expense claim records and relevant UK Government GHG conversion factors depending on fuel type and assumption of medium sized car; and
  • Transport Scope 3 – emissions have been calculated based on mileage expense claim records and average UK Government GHG Conversion factors and assumption of medium sized car.

Social

Of equal importance to our environmental commitments is our focus on our social impact – our people, our communities and beyond. They are fundamental to the success of our organisation and, as a Group, we appreciate the interconnectedness of the Social and Environmental responsibilities that we have as an organisation.

The Portmeirion Group directly employs 866 employees worldwide. We are invested in our people and have demonstrated through the recent pandemic that people are our core asset.

Our health and safety record is excellent and during 2021 we received one unplanned audit from the UK Health & Safety Executive from which we were provided with extremely positive feedback with no remedial action being identified. Our UK Stoke-on-Trent business has also been accredited with the Workplace Wellbeing Charter; a certification that demonstrates our commitment to the health and wellbeing of our colleagues.

The health and wellbeing of our teams remains our absolute priority. However, the people agenda is not confined to those colleagues directly employed by the Group. As with other aspects of our operations, we are evolving our people and workforce policies to place greater focus on the activities of the Group’s supply chain; both in terms of primary suppliers and outsourced manufacturing.

The resilience, loyalty and continued effectiveness of our employees is what has allowed us to get through the challenging last two years of Covid-19 related turbulence. We introduced hybrid working where possible and could not be prouder of the many achievements of our teams throughout this period. The way our teams pulled together through this very difficult period has strengthened us as a Group, and has also permanently changed the way our colleagues interact with the organisation.

Portmeirion Group prides itself as being a company with an open culture, putting its people at the forefront of everything it does, with high employee engagement and a consultative approach. This is demonstrated by the high levels of innovation that take place across the organisation. In 2021, we achieved platinum status in our Investors in People reaccreditation for both trading entities in our UK division. We are exceptionally proud of our Platinum status as this demonstrates our commitment to our people practices and continued development.

Striving for continual improvement is a priority for the Group’s leadership team. This recognises the importance of our Social responsibility – to our people, our communities, our customers, our suppliers, our shareholders and other third parties. We appreciate we do not exist in isolation and that our success depends on building successful relationships with all our stakeholders; based on respect, trust and mutual benefit.

  • Training for 19 employees as Mental Health First Aid Advocates; this ensures that we have team members available to support and guide our teams through any issues that they encounter.
  • Ten of our team members attended training sessions with the NHS to allow us to conduct lateral flow testing onsite to ensure that our teams remained as safe as possible at work throughout the pandemic.
  • Part of our UK division, Wax Lyrical, was awarded a bronze award in The Salesforce Frontline Hero Initiative category for its hand sanitiser production at the Retail Week Awards in October 2021.
  • Various initiatives took place to raise awareness of health and wellbeing including the sharing of healthy eating options, local walking routes, alcohol and stress awareness.
  • Our New York Showroom and all newly renovated US retail stores have converted to energy efficient LED fixtures with our warehouse in New Mexico scheduled to convert in 2022.

As a Group we recognise and value all forms of diversity in our employees and endeavour to promote a culture of inclusiveness in our workplace to enhance the success of our business. To this effect we have a Diversity Policy complementing our Equal Opportunities Policy. However, we also appreciate that to truly be an inclusive employer we need to properly understand our colleagues – current and future – and the communities in which they live. It is important to us that we monitor that diversity within our workforce is at least reflective of our local communities and that without exception our recruitment procedures and employment practices are supportive of ethnic minority groups. Our managers are required to undergo unconscious bias training where this is appropriate.

Portmeirion Group strives to eliminate any gender bias in our pay and employment policies and practices; the percentage of female colleagues holding a senior role in both USA and in our Wax Lyrical part of our UK Division is higher than their male counterparts.

Our site with the highest level of employees, Portmeirion UK in Stoke-on-Trent, published its gender pay gap statistics in 2021 which noted a mean pay gap of 24.5%. The figures for this year are not representative of a usual reporting period; at the time the snapshot was taken in the first Covid-19 UK national lockdown in 2020, less than 20% of our typical workforce were at work, the remainder were placed on furlough and as a result are excluded from the calculations.

As the Group moved to remote or hybrid working as a result of the pandemic, there has been a noticeable improvement with regard to recruiting more senior female colleagues from a wider pool of talent.

During 2021 for instance, we promoted 32 colleagues within the Group recognising the amazing talent that we have within our business. Of these 75% were female colleagues.

The Group will be carrying on with arrangements that improve the work-life balance for its employees regardless of social status and gender.

See our latest Gender Pay Gap Report for more information.

Developing talent and supporting diversity across our business helps to ensure we have the best teams who are motivated to deliver our goals. The Group provides a number of learning and development opportunities across all areas of the business to ensure that our employees have all the necessary skills to competently perform their roles. Where possible, e-learning is utilised to provide training in a more interactive and time convenient manner. Development opportunities include National Vocational Qualifications, professional development, first aid training and other specific jobrelated training courses. Management development is offered through accredited qualifications in leadership and management.

During 2021 colleagues took part in various apprenticeship qualifications at levels 3, 4, 5, 6 and 7, we also supported the attendance of mini-MBA courses in business and marketing alongside business coaching and mentoring. We continued with all mandatory training in areas such like anti-bribery and corruption, modern slavery prevention and unconscious bias alongside health and safety training.

The Group is also aware that, while training and development is critical to ensuring our workforce is provided the opportunities to progress and succeed, it is also essential to the success of the organisation itself. As such an additional focus on training, learning and working environment will be reviewed as part of our 2022 priorities.

In 2021, both Portmeirion UK and Wax Lyrical were accredited with Investors in People Platinum status, the highest status achievable. The reports from liP reflected and validated the Group’s stated policy of being a caring employer with good working conditions and an open and consultative culture. In particular, the way the Group managed the recent pandemic has been proof of management’s trust and continued investment in both people and the business.

The report recognised that training and skills development for the workforce is a key part of the Group’s culture and ethos. It did however also flag a lower level of engagement and response rate within the factory and distribution centre colleagues, indicating attention should be focused in this area.

Key to the retention of our employees is recognising and rewarding their hard work. Our reward strategy aims to provide a package that offers competitive pay and distinctive benefits. We are committed to paying the National Living Wage. Within the UK, all employees are offered membership to our Group personal pension plans, which provide employer contributions for all members, and are included in generous life cover and healthcare policies. In the US, all employees are offered benefits under a 401K employer sponsored defined contribution pension plan and in Canada through a Canada Pension Plan to which the company contributes. Our UK Division operates employee recognition schemes including discretionary incentive schemes, VIP “family and friends” shopping promotions, retirement afternoon teas and long service awards. The North America division operates annual sales incentive schemes for sales executives and discretionary bonuses for all employees. Our employee appraisal process involves performance measures against a series of core objectives which are aligned to each operating unit’s strategic aims. Our UK Division operates Employee of the Month and Employee of the Year awards to recognise and celebrate employee successes.

One of the ways the Group measures employee engagement is by opinion surveys. These surveys have consistently shown that our colleagues are happy to be working for us. Nevertheless, we would like to understand in more detail how the engagement changes based on role and pay, thus we will be doing more analysis into ensuring engagement is good across all levels of our colleagues. We were happy to welcome over 200 new employees to the Group in 2021 of which 22 joined via our Refer a Friend programme.

As a Group we are excited by the opportunities to take a more proactive role in our communities and will be exploring the way in which our social and environmental commitments may reinforce each other. During 2022, we will undertake an outreach and learning exercise to gain an understanding of the priorities that our communities consider to be most important. This will help us form our future strategy. In addition, and as one of the key employers in Stoke-on-Trent (UK), we will engage more deeply with educational institutions, from Primary school level to Universities, and understand better how we can support the aspirations of future talent and stakeholders.

Of course whilst looking at the bigger picture we will also continue with our programme that allows every employee to have the opportunity to make a difference within our local communities through our charitable programmes. Most of our financial contributions to charities come from the efforts and personal involvement of our employees, with active support from the Board.

Governance

As a Group, we are proud to be recognised as a good employer with strong commitments, policies and procedures put in place. Being under good governance is important to us although we recognise that, as non-regulatory risks evolve, our governance structures also need to be responsive to new and emerging issues. This underpins our commitment to improving the capture and analysis of non‑financial data and the ongoing review and update of our risk register in response to increasingly turbulent external dynamics.

Corporate Governance Statement

Good governance is no longer “just” having all procedures and process in order as a listed company. As a Group we acknowledge that ensuring we are meeting all legal and regulatory requirements are in essence simply ensuring our “hygiene factors” are met. We are, therefore, mindful that our corporate governance needs to adapt in the context of the various challenges that we are likely to face in the decades to come. Recognising the risk register of the World Economic Forum released January 2022, eight out of the ten risks were either environmental or social in nature.

We understand that as a Group, our governance needs to reflect the environment in which we operate and focus on what this will mean to us as a global organisation will be considered through 2022.

  • Continue to evolve our ESG materiality assessment.
  • Establish clear ESG commitments with supporting targets and plans for implementation.
  • Enhance our levels of engagement with all of the people that are part of the global Portmeirion Group operation.
  • Continue to monitor that our Governance framework correctly supports our aspirations on ESG factors and goes further than compliance.
  • Assess how to appropriately incorporate additional KPIs that link environmental and social performance into our corporate behaviours, evolve our culture and to further embed our commitments both internally and externally.