Spirent Communications Plc is a FTSE 250 listed communications test and measurement company. The company develops innovative hardware and software solutions for the communications industry with operations in 15 countries across Europe, the US and Asia.
Spirent engaged Brite Green to understand and quantify how sustainability issues affected the business. Brite Green worked with Spirent to identify the material issues for the business and developed a sustainability strategy that supported the company’s commercial goals whilst providing environmental and social returns.
Since developing the strategy, Brite Green provides ongoing support and expert resource to manage the sustainability programme for the Group. Support includes managing carbon reduction initiatives, ensuring legal compliance, product innovation, and reporting progress to investors and key customers through the CDP and in the annual report
Developing and implementing a commercial sustainability strategy
Spirent Communications Plc is a communications test and measurement company with operations across the globe. The company provide test hardware and software for communications networks, services and applications. Their solutions portfolio includes products for data centres and networks, wireless and mobile, and positioning systems.
Spirent has a large estate which include hardware and software labs, sales and administrative offices, and some in-house manufacturing and assembly, although the majority of the Group’s manufacturing is outsourced in South East Asia. The equipment they develop and sell is market leading and often energy intensive. Their key customers include large telecoms companies, mobile phone handset developers and network systems companies and often have well developed sustainability programmes. Spirent also has a number of institutional investors who are taking a greater interest in long term risks, especially relating to climate change.
As a result, the company was interested in identifying the key sustainability issues for the Group’s operations and supply chain and determining how they influence their business. The company recognised early on that sustainability was important to its operations and had already began basic environmental management but wanted to be more strategic. They approached Brite Green to undertake a comprehensive materiality analysis and to assist the company in addressing the strategic areas of risk, impact and opportunity.
Identifying Key Sustainability Issues
Brite Green carried out a detailed materiality analysis to identify the potential sustainability issues. This entailed:
- Identifying all sustainability issues with direct and indirect financial impact
- Engaging with internal and external stakeholders to identify key issues, risks and opportunities
- Benchmarking Spirent against their peers using Brite Green’s Sustainability Maturity Model
- Reviewing all applicable legislation and contractual requirements, and
- Reviewing where sustainability issues would impact on Spirent’s policies and delivery of the commercial strategy
The material sustainability issues for Spirent were:
- Greenhouse gas emissions and climate change;
- Energy consumption in offices and manufacturing;
- Material use, resource efficiency & energy efficiency of products;
- Environmental management; and
- Use of hazardous and regulated materials (including REACH and conflict minerals)
Understanding the commercial drivers for sustainability
After identifying the issues material to Spirent, Brite Green analysed the ways in which these affect business performance. There were drivers in three key areas:
- Costs and financial performance
- Market opportunities
- Investor perception
A technology feasibility review identified significant cost and carbon reductions, with indicative savings of around 35% of energy bills and the Group’s carbon footprint.
Market opportunities and investor perception were key for Spirent. Customers increasingly demanded better energy performance of products, whilst developments in Spirent’s products had historically meant higher energy use, heat output, noise and an increase in the size of products. There were also significant opportunities to develop new test functionality to help address customer’s sustainability challenges, e.g. energy efficiency in mobile-phone handsets or in data centres.
Investors and customers had become increasingly sophisticated in their assessment of sustainability risk and Spirent was required to disclosure data and information on their management of material sustainability issues through the Carbon Disclosure Project and specific procurement questionnaires. The opportunity to outstrip competitors in environmental performance, as well as exceeding the relevant criteria for inclusion in the FTSE4Good index also represented attractive opportunities for Spirent.
Developing a sustainability strategy for improved commercial performance
Based on the outcomes of the materiality analysis and on a comprehensive environmental audit, a strategy was developed for Spirent to manage material sustainability issues. Alongside the strategy, the business case for sustainability was developed, incorporating financial and non-financial risks and opportunities.
The strategy was split into 3 key areas:Improving sustainability performance for the Group in four key areas:
1) Improving sustainability performance for the Group in four key areas:
a) Property: Minimise environmental impacts from properties
b) Products: Incorporate sustainability thinking into products, through:
1) Innovation in product design and manufacture
2) New products and services to address customers’ sustainability challenges
a) Procurement: Minimise sustainability impacts in the supply chain
b) People: Provide our people with the skills and resources to address sustainability issues effectively
2) Set Goals: Setting measurable, stretching sustainability goals with clear timescales
3) Report: Achieving transparent reporting on all material sustainability issues
Brite Green has continued to work with Spirent to implement their sustainability strategy. Key deliverables include providing detailed sustainability reporting to customers and investors, the development of a low carbon centre of excellence at the Group’s site at Paignton, and programmes to audit key sites across their global estate, ensuring legal compliance and identifying opportunities for cost saving and improved sustainability performance. A programme to use sustainability to drive innovation in products has commenced and the business has already delivered two new flagship products; one with a dramatic reduction in energy use, heat and size, another providing ground-breaking new test functionality.
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Brite Green is an award winning sustainability consultancy. To find out more about how we can help you create or enhance your sustainability strategy, please contact us.