Waste is generated from our operations, both in the form of physical materials waste from our end to end supply chain activities and effluent waste water and sludge generated from our wet processing activities.

Recognising these two different forms of waste output from our business, we have elected to pull both of these important focal areas under a revised Sustainability Pillar which we will now refer to as our Waste Pillar. Our Environmental Policy covers our aims and objectives around waste.

In our next strategy period from 2023 until 2026, our primary focus for materials waste will be elimination of waste to landfill across all units globally. Our target for 2026 is delivery of zero waste to landfill, and this will be achieved by higher granularity analysis of waste streams which today continue to be diverted to landfill, with improved segregation and identification of opportunities for circularity, recycling and reuse.

Reducing materials usage and minimising the impact of the materials that we consume is a very high priority for us. In 2019, we adopted the European Union’s Waste Framework Directive as our basis for waste management and the resulting waste catalogue contains 35 different waste categories that cover all material items present in a Coats unit. This gives increased transparency and understanding of waste generation streams across our business, and assists us in identification of opportunities for reduction, and where possible, prevention.

Our strategy for reducing overall waste, is to prioritise reduction in its generation through process and product redesign, followed by implementation of reuse and recycling initiatives. We are committed to increase the degree of circularity at Coats, evolving our manufacturing processes, material flows and products from a linear (take, make, discard) to a circular (reduce, reuse, recycle) model.

During 2022, the total waste generated across Coats business units was 14.6 thousand tonnes, compared with 22.5 thousand tonnes in 2021. Analysis of waste generated in 2022 shows that 19% of waste material from our operations is linked directly to our products, with other high volume categories including paper, cardboard and wood packaging 18%, sludge 27% and plastic packaging 10%. Of our waste generated, 62% was recycled or reused, with 13% disposed of in landfill (this is down from 14% in 2021 and 19% in 2020). Globally, 58% of our units have achieved sending zero waste to landfill through 2022.

As per our 2019 to 2022 sustainability strategy, our target for waste reduction in 2022 was delivery of a 25% reduction in the percentage of waste generated from our 2018 baseline. Against this target, we are exceptionally proud to have fully achieved this target with a full 25% reduction delivered – a significant improvement from the 1.4% reduction reported for 2021.

Considerable progress was made throughout the year in working collaboratively with our supply chain partners to identify and implement new waste reduction and circularity initiatives. Examples of circularity on packaging materials have entailed us working closely with strategic suppliers where uplift programs have been instituted on our paper and cardboard waste, enabling it to be repulped and reconstituted into new paper and cardboard packaging materials. With plastic, many of our units now grind thermoplastic dye centres and customer returned thread supports into plastic chips and return these to suppliers enabling their melting and reformation into new plastic items. We have implemented tripartite service agreements with our primary chemical suppliers and a network of global specialist collection players, enabling recovery of empty chemicals drums and plastic intermediary bulk containers and redistribution to our suppliers for their reuse.

In our recently acquired footwear components business, structural components made from thermoplastic or cellulosic materials are supplied to the customer in a ‘sheet’ from which customers cut out parts which undergo secondary processing. This creates up to 20% waste, which is taken back by Coats to remelt/recycle.

Significant progress has also been made in reducing the packaging we supply with our products when shipped to customers. We have strategically eliminated use of plastic sleeves across black and dark coloured thread cones , resulting in elimination of 14.2 million plastic sleeves from our value chain, and have advanced the use of recycled plastic in cones and vicones, increasing recycled plastic use by 36% in 2022.

In 2022, further focus has been given to selection and optimised use of chemistry for physical/chemical effluent treatment systems, resulting in enhanced efficacy in coagulation and flocculation, resulting in reduced generation of sludge. Good progress has also been made in weight reduction of sludge through optimisation of filter-press operation and enhanced sludge drying, resulting in more effective water extraction.

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As outlined in our water pillar, our global network of dyehouses rely on use of large volumes of water to facilitate the thread colouration process, and post dyeing, the residual dyeing liquor is discharged from the dyehouse as effluent.

In 2022 we used 4.4 million cubic metres of water globally, and 76% of this was discharged as effluent. As temporary custodians of the water we use, we recognise our responsibility and are committed to ensure that this sometimes scarce resource is returned to the local communities in which we operate in a fit state.

Country or community-level discharge requirements are constantly evolving and we obviously need to keep abreast of actual and potential changes, especially as changes can sometimes trigger the requirement to upgrade effluent treatment plants, which takes time to plan and implement. For this purpose we use a global register of legislative changes which covers all the countries in which we operate and which also ensures that we have in place the correct operational permits for each of our locations, and that any incidents are reported.

As the chemical input load to an effluent treatment plant (ETP) varies depending on the upstream processes, continuous monitoring of key parameters is essential to ensure that the plant is meeting requirements at all times. All of our key sites have automatic monitoring systems in place that are constantly measuring five key criteria; temperature, pH, biological oxygen demand, chemical oxygen demand and total suspended solids. These measurements are taken at the final discharge point and are made every 30 seconds. These data are then fed to an online dashboard that issues alerts to nominated staff if warning limits for any of the criteria are triggered, allowing action to be taken before a discharge limit is breached. This highly responsive system has been important in ensuring that the root causes of any imbalances in the effluent treatment processes are quickly identified and addressed. This system has helped us ensure that we are always in compliance with national discharge regulations.

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Zero Discharge of Hazardous Chemicals

We signed up to the ZDHC programme in 2016 and committed to aligning our effluent standards with those of the programme in 2018. We adopted the ZDHC conventional parameters with foundational limits as our Coats internal standards in 2019.

Initially these limits were applied only to effluent discharged from the factory, but in 2019 the scope was expanded to include sludge. Sludge is essentially the solid residue created during the effluent treatment process, during which some chemicals are precipitated out of the effluent in order to clean it. While some contaminants in effluent can be destroyed through the treatment process, in other cases this is not possible as the chemical remains either in the effluent or in the sludge. Historically much effluent treatment technology has been aimed at removing chemicals that were unwanted in the effluent precisely by ensuring that they ended up in the sludge, however focus on analysis of effluent and sludge, means that for these durable chemicals the only option is to prevent them being used in processing in the first place. We are wholly supportive of this approach and continue to work closely with our key dye and chemical suppliers (many of whom are ZDHC affiliates themselves), to work out how to continue to reduce the chemical load needed to successfully process the fibres that we work with.

Our goal is to have all of our units meeting the ZDHC standards, and in 2022, 92% of our effluent and sludge in those countries where testing is possible was compliant with the ZDHC standard, up from 82% in 2021. Due to our strategic restructuring programme in the Americas and Mexico, we have seen significant changes in our manufacturing product range and mix in 2022 in Mexico, and this has driven a change in the composition of dyeing auxiliary chemicals in our Mexican Orizaba site, resulting in a small number of ZDHC parameters being marginally out of specification. Our leadership team in Mexico are actively addressing this situation through a comprehensive deep-dive of utilised chemistry as well as review of all effluent treatment plant sub-processes. We are confident that we will be able to progress to 100% compliance in 2023, and such is the importance of the ZDHC focus, we will continue to target 100% compliance through our 2023 to 2026 strategy period.

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Modern Effluent Treatment

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