Water

By lowering our demand on municipal water sources, we free up water for surrounding communities, reduce our operational costs and enable our businesses to continue operating despite water restrictions or drought conditions. The import, retail and vehicle rental businesses are the largest consumers of water in the Group.

We acknowledge the need to mature and formalise our approach to water management and have prioritised the development of specific water usage strategies for our next round of targets, effective in 2022. As a start, we are developing benchmarks based on the size of a site and the nature of activities to inform and align targets and to account for changes in footprints and external factors, such as COVID-19 or municipal dependencies.

• Poor municipal and national infrastructure in South Africa resulting in water supply interruptions.
• The cost of implementing water-efficient solutions in a tough economic climate.
• Absence of accurate and timely municipal readings in South Africa, which hampers our ability to accurately assess progress against the water target.

What we are doing

We use wastewater recycling systems in some dealership and car rental depots in South Africa and Australia. In South Africa specifically, rainwater harvesting systems are also implemented.

Some of our bigger water-related projects in South Africa include:

• Rainwater harvesting systems at 10 of Hyundai's 45 dealerships, able to store between 60 000 and 80 000 litres of water each.
• A water recycling plant, rainwater harvesting system (30 000 litre capacity) and a borehole at the BMW dealership in Bloemfontein, which together have reduced the dealership's demand on municipal water by around 60%. The brand has also installed a 30 000 litre water recycling plant in its Vereeniging dealership.
• Rainwater harvesting tanks at the Ford dealership in Cape Town. The collected water is used to wash vehicles. The dealership's average water consumption is 5 000 litres a week, which during the winter months is entirely sourced from the harvesting tanks. During summer months, borehole water is purchased from an outlying farm.
• Of our commercial vehicle businesses, three of eight Cargo Motors dealerships operate water recycling plants in their wash bays, saving around R25 000 a month, and Magnis UD Trucks operates water recycling plants at three of its four dealerships. Maemo Motors Commercial Vehicles in Rustenburg only uses borehole water.
• 21 of our 28 multi-franchise dealerships have rainwater harvesting and recycling systems.

We continue to engage with our people in South Africa on the Motus Water Awareness pledge, which encourages them to conserve water, report water wastage and leaks, and educate others on using water sparingly. Motus Australia's induction programme for new employees includes water conservation awareness.

2020 performance

Group

• While water consumption decreased 1,3% compared to 2019, prior to business closures due to the COVID-19 lockdown, our water usage was above our internal stretch target. Contributors to the increase included municipal-related issues in South Africa, for example burst pipes and estimated council meter readings, water leakages which have now been repaired, a number of building renovations and new business sites opened in the UK and Australia.

Energy

Our efforts to reduce our carbon footprint focus on electricity and fuel consumption, aiming to reduce our operational costs, ensure business continuity during power outages and comply with South Africa's Carbon Tax Act.

The biggest use of fuel is in company vehicles, which is part of the Group's business model to generate pre-owned vehicle sales, and to a lesser extent, the fuel used in test drives with potential customers as well as the delivery of aftermarket parts to customers. Financial Services' use of technological resources makes it a fairly high consumer of electricity.

• Poor municipal and national infrastructure in South Africa resulting in load shedding (intentional power cuts). This requires the use of generators at a higher cost to ensure business continuity.
• The cost of implementing energy-efficient solutions in a tough economic climate.
• Certain franchise agreements require lights to be left on in dealership showrooms after hours.
• The quality of fuel in South Africa does not match that of grades sold in Europe and other first world markets and is not suitable for the most modern lower carbon emitting engines.
• The delivery of aftermarket parts to customers is often at short notice and at frequent intervals.

What we are doing

Our initiatives to reduce our electricity consumption include:

• Installing energy-efficient lighting and air-conditioning systems and replacing energy intensive lights with light emitting diodes (LEDs).
• Installing light sensors to switch lights off in unoccupied areas and timers on air-conditioning and heating systems. In the UK, heating controls are installed on workshop doors switching the heating systems off when doors are open.
• Implementing energy-efficient interventions in building upgrades and renovations.
• Monitoring employee fuel use and, in Aftermarket Parts, continually revising delivery routes and schedules so that they are as efficient as possible. The trend towards online purchasing will enable us to further optimise delivery routes.
• Engaging with local and imported vehicle suppliers on lower carbon vehicles.
• In South Africa specifically, installing electricity meters to monitor consumption, identify spikes and energy-saving opportunities, and compare actual consumption to municipal charges. In addition, we install solar PV systems, where feasible.

2020 performance

Carbon footprint (Group)

Business segments

• Solar power installations were undertaken at the Motus Autoworx depot in Jet Park, achieving a 40% energy saving, and in Hyundai's PDC in Germiston, Gauteng. Hyundai's PDC now operates off the grid around 70% of the time. The installation of solar panels for a major Europcar depot (reported last year) was deemed unfeasible due to cost considerations. The BMW dealership in Bloemfontein also operates a solar plant (operational since May 2018), achieving a 30% energy saving.
• As part of its head office renovations in Gauteng, Renault installed energy-efficient lighting in the offices and basement as well as motion sensors.
• Emerging Brands started a project to replace all old light fittings with LEDs and is fitting timers to reduce electricity consumption in its head office and warehouse when they are unoccupied.
• Aftermarket Parts achieved a 9% reduction in its electricity usage, driven solely through heightened employee awareness.

Solar energy system implementation

(Hyundai example)

Hyundai's PDC in Germiston, Gauteng, handles over 450 shipping containers of vehicle parts a year and holds stock worth around R100 million in its warehouse. The facility's hybrid solar PV installation, commissioned in March 2020, cost just over R3 million and comprises 561 roof-mounted panels. The 185kWp (kilowatt peak) PV system and battery bank are assisting the PDC to reduce its drawdown from the grid during peak times, thereby lowering maximum demand tariff charges and relieving pressure on the grid. During the day, solar energy powers the PDC and battery power is used during the peak times of sunrise and late afternoon. Batteries are charged by excess solar power during the day and at night from the grid at the cheapest rate.

The PV system also reduces the PDC's dependence on generators during load shedding. During these times, the PDC was consuming around 58 litres of diesel per hour, emitting 150 kilograms of CO₂ per hour into the atmosphere.

With estimated savings of around R450 000 a year, payback is calculated to be around six to seven years.

The PV system will serve as a pilot study to determine the feasibility of solar installations at other Group sites and Hyundai dealerships in South Africa.

Paper

Traditionally, purchasing a vehicle is a paper-intensive exercise. Advances in technology are making it possible for us to accelerate paperless and online processes while still meeting regulatory requirements and customer needs.

• Streamlining our processes while meeting ever-changing and more onerous regulatory requirements.

What we are doing

Paper management is an ongoing focus area. We encourage our people to print on a 'needs only' basis and implement electronic storage capability, where feasible. The automation of some finance and insurance processes, including emailing customer statements and storing them electronically, positively impacts paper consumption and reduces the need for physical document storage.

The advent of remote working as a result of COVID-19 has meant the introduction of tools like Microsoft Teams to support internal engagement and centralised folders for critical documents and reports. These implementations facilitate online document sharing, which has reduced paper use and freed up storage space.

2020 performance

Business segments

• Renault has launched Renault Virtual, which aims to deliver a complete online flow of processes from marketing and customer interaction to the transfer of documents digitally between stakeholders as well as digital signatures in the finance and insurance process. In its PDC, Renault has introduced digital scanners to receive, unpack, shelve and pick stock.
• Emerging Brands reduced the number of printers at its head office and the PDC and implemented password-protected printing to monitor paper usage.
• F&I Management Solutions (FAIMS) piloted digital customer onboarding at certain sites, significantly speeding up the onboarding process and reducing the volume of Know Your Customer documentation, while remaining compliant with financial intelligence-related legislation. The solution also creates a digital customer ID. By the end of September 2020, the solution will be fully operational, including a self-service onboarding functionality accessible from any internet connection.
• The introduction of electronic signatures across the Aftermarket Parts business segment was delayed due to more pressing projects, however the project remains a strategic priority.
• In East Africa, our dealerships have embarked on a project to store documents electronically, where possible, and going forward a user ID system will be installed on all dealership printers to monitor usage per person.

Waste

We manage hazardous and non-hazardous waste responsibly and in compliance with applicable national waste management laws and ensure relevant disposal certificates are issued. Particular focus is placed on managing paper, plastic, batteries and oil waste.

• Appropriate and safe disposal of items such as cleaning aprons, gloves and masks to ensure the spread of COVID-19 is contained.

What we are doing

Oil spill kits in workshops and oil leakage tests ensure oil spills are responsibly cleaned up and accurately reported in line with regulations. Filter and oil separator systems in certain workshops and larger wash bays trap silt, sludge and hydrocarbons.

We have a waste policy that all operations must adhere to as a minimum, however, each business segment sets its own protocols depending on waste impact and business activities. Various businesses partner with registered waste disposal companies to recycle waste.

Most of our deep cleaning and waste treatment in relation to COVID-19 control has been outsourced to existing contract services in South Africa with disposal measures confirmed in line with health guidelines. We are investigating potential recycling options to enable our employees to dispose of personal protective equipment safely and hygienically at our facilities.

Motus UK disposes of all e-waste in line with Europe's Waste Electrical and Electronic Equipment Directive. The operation's recycling policy targets the reduction of waste sent to landfill and covers oils, oil filters, tins, cans, bulbs, plastics, metals, batteries, rags, granules, mixed fuels, cardboard and paper.

Unfortunately, the waste management programme planned for Motus Australia that was reported last year has not materialised due to employee attrition and cost cutting measures within the business.

There were no significant spills during the reporting year (2019: 0).

Waste programme

(Renault example)

Renault has implemented a number of initiatives to improve its waste management, including:

• Partnering with First National Battery, who deliver batteries directly to dealerships across the country so that Renault's PDC does not have to manage stock on its premises. First National Battery also collects used car battery components from dealerships and the PDC for recycling, in exchange for import credits.
• The disposal of vehicle parts in an eco-friendly manner, using the services of Pandae Green Solutions and DSV, our outsourced transport and logistics company, to recycle steel, plastic, glass, cardboard and miscellaneous waste. During the reporting year, a specific initiative was undertaken to destroy old unsaleable stock valued at R19,6 million.
• The reduction in the number of carriers and flatbeds as well as the frequency of trips needed to transport vehicles, stock and loads between the port at Durban and the PDC in Johannesburg without compromising customer experience. Not only does this reduce Renault's costs and carbon footprint, but it also means less trucks on the road.
• Reviewing the damage claims process in the PDC to reduce unnecessary paperwork.

View enlarged Battery recycling

Key data (Group data)	2020			2019		2018
Energy consumption
Road fuel usage (litres)	19 186 337*			22 250 296		23 200 492
Electricity purchased (megawatt hours)	75 713*			80 146		77 846
Emissions
Scope 1 emissions (tCO2)¹	49 319*			56 426		58 731
Scope 2 emissions (tCO2)	67 348*			71 844		72 337
Scope 3 emissions (tCO2)²	1 625*			–		–
Total emissions (tCO2)	118 292*			128 270		131 068
Water
Water purchased from municipalities (kilolitres)	603 509*			611 223		651 648
Spills
Environmental incidents	0			0		1
Recycled
Oil recycled (litres)	1 952 693			2 009 394		2 431 068
Environmental compliance
Fines or penalties for environmental incidents	0			0		0

Methodology used: the Greenhouse Gas Protocol – a Corporate Accounting and Reporting Standard (Revised Edition). The boundary used is operational control.
1	Tonnes of carbon dioxide.
2	Reported for the first time.
	Satisfied with performance.
	Area for improvement.
*	Assured (see the independent limited assurance report).