Environment

DS Smith makes a major contribution to conserving resources and reducing landfill waste through its position as the leading UK collector of waste paper for recycling and the UK's largest producer of recycled paper. For more information on DS Smith's recycling activities click here.

The Group's corrugated and plastic packaging products are made from recycled raw materials wherever it is practicable; approximately 75% of the paper, polymers and films that the Group uses for manufacturing packaging are recycled material.

Corrugated packaging is fully recyclable and approximately 80% of corrugated packaging used in the UK is recycled. For more information on corrugated packaging and its recyclability click here.

The Group's packaging businesses work with their customers and retailers to optimise the use of resources and reduce waste in their supply chains. For more information on the subject of packaging and the environment click here.

Spicers' businesses offer their customers ranges of products with environmentally friendly features such as: products made from recycled or sustainably produced materials; products that are readily recyclable; cleaning products that are safe and biodegradable; electronic products that have low energy consumption.

Environmental Performance

Our businesses undertook, in the course of 2007/08, a wide range of projects, involving investment and changes in operating practices, aimed at reducing their environmental impact. The Group's overall performance in 2007/08 is reflected in the environmental performance indicators shown in the table below.

The Group consumed 2% less energy in 2007/08 compared with the previous year, principally as a result of the closure of Taplow paper mill in October 2006. Energy usage per £'000 of revenue was 12% lower. Excluding the effect of the paper mill closure, the Group's energy usage increased by 1%, principally reflecting increased production at the Group's continuing UK paper mills. The Group's paper mills improved their energy efficiency and reduced the energy usage per tonne of paper produced by 2%.

Our two largest paper mills, at Kemsley in the UK and Kaysersberg in France, which account for approximately 65% of the Group's energy usage, have on-site combined heat and power (CHP) plants. These CHP facilities provide energy more efficiently, with lower carbon dioxide (CO2) emissions and at significantly lower cost than if it were to be sourced from the external grid. In addition, Kemsley Mill recycles, in the form of energy recovery, a substantial proportion of the reject material, such as plastic and polystyrene, which enters its process mixed in with the waste paper and is separated out during paper manufacture; the mill's own waste-to-energy plant efficiently burns the waste to produce steam for use in the mill's operations. We continue to investigate the potential for using alternative energy sources, including refuse-derived fuel, particularly for our paper manufacturing operations.

DS Smith Packaging became the first UK corrugated packaging producer to be accredited under the UK's Energy Efficiency Accreditation Scheme, in recognition of its energy efficiency, approach to energy management and achievements in reducing energy consumption; the scheme is independently assessed by the Energy Institute on behalf of The Carbon Trust.

The Group's lower energy usage in 2007/08 resulted in a 2% reduction in total emissions of CO2. There was a small change in the balance between direct (Scope 1) and indirect (Scope 2) CO2 emissions due to a variation in the mix of energy sources used. Direct emissions of sulphur dioxide and nitrous oxides, the other gases emitted to air in material quantities, were 3% and 7% lower, respectively, than in the previous year.

The Group's total water usage was 3% lower than in 2006/07 and the quantity of water discharged by the paper mills, which account for approximately 95% of the total water used by the Group, was 2% lower. The average quality of the water discharged by the paper mills improved overall, principally due to a substantial reduction on the suspended solids load of the effluent at our Turkish paper mill as a result of investment in a new effluent treatment plant.

We reduced the total amount of waste generated by our businesses by 12% and the quantity of waste sent to landfill by 5%. As a result of the reduction in the total waste being principally due to the elimination of types of waste that had previously been recycled, the proportion of our waste that was recycled fell by one percentage point to 83%.

Environmental Performance Indicators

Methodology: The Group is working towards collecting and reporting its environmental data in accordance with the guidelines specified by the Global Reporting Initiative and the Greenhouse Gas Protocol (GHGP), to the extent that this is currently practicable. The figures relate to all of the Group's wholly-owned or majority-owned operations.

¹ Energy figures relate to usage of all fuels, including diesel for freight transport.

² Emissions to air figures have been calculated from the usage of all fuels, including for freight transport. As required by the GHGP, Scope 1 and Scope 2 carbon dioxide emissions are reported separately. Scope 1 (direct) emissions are those arising from combustion of fuel in installations or vehicles owned by the Group; Scope 2 (indirect) emissions are those arising from bought-in energy (i.e. electricity or steam) where the combustion has been carried out by another company. The 2007/08 Scope 1 emissions included 18,000 tonnes (2006/07: 18,000 tonnes) of CO2 which were associated with the production of electricity which was sold to the grid from one of our CHP plants. The reported emissions of sulphur dioxide and nitrous oxides are those produced directly by the Group.

³ Water discharge figures relate only to the Group's paper mills, which account for approximately 95% of the total water usage of the Group. The quantities measured, in accordance with the requirements of the IPPC regulations, are for process water only and do not include cooling water. 54% of the water discharged was to the sea, 29% was to rivers and 17% was to sewers.

⁴ Waste figures relate to waste generated by our operations; waste recycled includes recycling through agricultural use as landspread and energy recovery at our waste-to-energy plant.