RS : ESG Report

ABOUT

This document explains our methodology for collecting and calculating non-financial data that is reported in our Annual Report and Accounts and ESG Report. It covers our 15 most material ESG KPIs, with a few additional key performance indicators (KPIs) included which form the basis of our 2030 ESG action plan.

Reporting period

The reporting period for our ESG performance metrics is aligned to our financial reporting period, from 1 April 2022 to 31 March 2023.

Our ESG performance data is reported externally on an annual basis, however we also provide half year performance data on our eight non-financial KPIs at our interim results announcement and on our website.

For ESG performance reporting we generally provide five years of continuous data, where available and this can be found at rsgroup.com/esg/reporting-centre

For the purpose of our science-based targets, we use a fixed 'base-year' (2019/20).

New metrics introduced will be externally reported with at least three years of comparable data, where available.

2 | ESG Basis of Reporting 2022/23

Reporting boundary and methodology

The ESG performance metrics are prepared in accordance with the following standards and guidelines:

• CDP guidance
• GHG Protocol standards and guidance, including the Corporate Standard, Scope 2 Guidance, Corporate Value Chain (Scope 3) Accounting and Reporting Standard and Scope 3 Calculation Guidance
• Global Reporting Initiative
• International Labour Organisation
• SASB Standards
• Science-basedTargets Initiative (SBTi)
• Streamlined Energy and Carbon Reporting (SECR) Guidelines
• UN Global Compact Ten Guiding Principles
• UN Sustainable Development Goals

The organisational boundary for greenhouse gas emissions reporting for RS Group and its subsidiaries is based on a financial control boundary, covering 100% of business activities.

New acquisitions are included in the consolidated reporting for non-financial data from the date at which they are acquired, where this data is available and deemed robust. However, it is recognised that in certain cases, new acquisitions may not have appropriate reporting systems in place at the date of acquisition to allow them to record or disclose their ESG performance data.

In this case, we will report their ESG data in the following financial year's Annual Report and Accounts. This will be back dated to the point of ownership and the previous year's data will be restated to include the new acquisition.

Data verification and assurance

Data is reviewed and verified by the appropriate accountable person(s) and subject matter experts at the point of reporting. The most material ESG performance data is subject to external assurance, through a limited assurance process. The KPIs assured in 2022/23 include:

• Absolute Scope 1 and 2 CO2e emissions
• Scope 3, category 1 (purchased goods and services) and category 4 (upstream transportation and distribution)
• Carbon intensity of direct operations
• Product transportation emissions - absolute and intensity (tonnes of CO2e per tonne of product sold)
• Packaging intensity (tonnes of packaging / £m revenue)
• % of management that are women

A full assurance statement is available at: rsgroup.com/esg/reporting-centre

Data quality

The aim of our reporting is to provide data that is complete, accurate and relevant to our business. For any data that is found to have a material error, or where conversion factors may have changed following external disclosure, this will be clearly indicated and the data restated for purposes of comparable baseline and trend analysis.

Where possible, we report our performance metrics for a five-year period to demonstrate our long-term performance and commitment to continuous improvement.

ESG METRICS

3 | ESG Basis of Reporting 2022/23

ADVANCING

SUSTAINABILITY

01 CARBON EMISSIONS

2030 Goal: Reduce absolute emissions from our direct operations by 75% by 20301 (Scope 1 and 2)

Breakdown of calculation:

Definition: Total Scope 1 and 2 CO2e emissions Scope and boundary:

• Carbon emissions are reported as tonnes of carbon dioxide equivalent (CO2e)
  to enable the emissions of different greenhouse gases to be consolidated and reported on the basis of their global warming potential
• We report the breakdown of our CO2e emissions in line with the three scopes defined under the WRI/WBCSD GHG
  Protocol: Scope 1 (direct emissions), Scope 2 (energy indirect emissions) and Scope 3 (other indirect emissions, including business travel)

1 By 2029/30 from a 2019/20 baseline

4 | ESG Basis of Reporting 2022/23

• To calculate Scope 1 and 2 carbon emissions we include: premises energy use, company vehicles and fugitive emissions:
• • Premises energy: Electricity, natural gas, fuel oil, fuel gas, LPG and other energy use reported by site and converted to CO2e. The majority of sites covering 92% of our group electricity use in 2022/23 use renewable electricity which is calculated at zero kg CO2e per kWh
  • Company vehicles: Vehicle fuel use or distance travelled reported site by site converted to CO2e
  • Fugitive emissions (primarily emissions from air conditioning systems): reported by site and converted to CO2e
• Carbon intensity: Our Scope 1 and 2 emissions (premise energy, company vehicle and fugitive emissions) per Group £m revenue. The carbon intensity excludes any emissions and revenue from any businesses acquired within the financial reporting year
• The emission conversion factors are from the latest version of internationally recognised sources such as the Department for Business, Energy and Industrial Strategy (BEIS), Department for Environment Food and Rural Affairs (DEFRA) and the
  International Energy Agency (IEA)
• Scope 1,2 & 3 (categories 1 and 4) emissions data is externally assured by a third party

Scope 1 and 2 emissions data collection:

At RS Group we incorporate an electronic data collection process to obtain all our Scope 1 and 2 emissions data. Collection of data is carried out on a quarterly basis with source data obtained from the following:

• Invoices for combustion fuel consumption (natural gas, fuel oil, LPG)
• Invoices for electricity consumption
• Meter readings for gas and electricity consumption
• Fuel card data for volume of petrol and diesel for company cars
• In-housefinance expense portal to obtain fuel volume and distance for company cars

Scope 3

To calculate Scope 3 emissions, we select the categories of Scope 3 emissions reporting which are material and relevant to our business, for example for category 1 (purchased goods and services) which represents over 85% of our overall Scope 3 emissions. We then apply the relevant reporting methodology for that specific Scope 3 category.

Scope 3, category 1: purchased goods and services

Scope and boundary: The carbon emissions are calculated by obtaining RS direct and indirect supplier spend data (this includes category 2 capital goods.

Spend based method: RS spend categories are mapped to the Quantis tool (WIOD) and multiplied by the emission factors provided by the Quantis tool obtained through the World Resources Institute (WRI) and the World Input- Output Database (WIOD).

Data collection:

• Annual request for supplier spend data for direct and indirect from our procurement team

Unit: Tonnes of CO2e

Scope 3, category 4: upstream transportation and distribution

Scope and boundary: Carbon emissions due to third party logistics services purchased by RS Group including outbound logistics and intra- site logistics and transportation of purchased products from tier 1 suppliers to RS Group where this is under our direct control.

Distance based method: Calculations take account of the weight of products shipped, the origin location, the destination locations transport modes for each route, allowing for multi-modal transport. Emissions factors and global warming potentials are sourced from BEIS by transport mode and distance. Carbon emissions are calculated on a well to wheel basis, which takes into account the greenhouse gas emissions generated throughout a fuel's entire lifecycle.

Data collection:

• Origin and destination location data
• Product weight data
• Packaging weight assumptions
• Transport mode data and emissions factors
• Carbon emissions factors per tonne- kilometre and mode of transport

Unit: Tonnes of CO2e

5 | ESG Basis of Reporting 2022/23