CLIMATE
NET ZERO

Protecting the
Planet to Safeguard
Tea and Coffee

OUR
AMBITION:

Achieve net-zero emissions by 2040

SCOPE 1 & 2

50%

reduction
by 2030

SCOPE 3

42%

reduction
by 2030

FLAG*

30%

reduction
by 2030

WHAT WE’RE DOING

Developing carbon reduction roadmaps for our SBTi approved net-zero targets.
Aligning our policies and due diligence procedures to our net-zero ambition by 2025.
Developing a no-deforestation approach by 2026.
Increasing energy efficiency to reduce our overall energy consumption.
Developing a Good Water Stewardship approach to improve our water footprint by 2028.
Committing to 100% renewable electricity by 2030.
Engaging with suppliers on reducing their carbon emissions.

^{* FLAG stands for Forestry, Land and Agriculture}

Tea and coffee production depends on a healthy climate and environment. Climate change is an existential threat to our industry, which is why Finlays is committed to working toward having a positive impact on the world around us. From bush to beverage, we take a multistakeholder approach to mitigating the short and long-term effects of climate change on our operations and supply chains.

PROGRESS IN 2024

Completed Finlays’ 2024 corporate carbon footprint, with Scope 1 & 2 emissions independently assured
Near and long-term carbon reduction targets approved by the Science Based Targets initiative (SBTi)
Use of renewable electricity increased by 63% in 2024 vs. 2023
47% reduction in scope 2 emissions vs 2023
Our response to CDP Climate 2024 received an improved B rating (up from C in 2023)
Developed our deforestation-free approach in accordance with EUDR requirements
Finlays Argentina secured renewable electricity for all its tea factories
Finlays Colombo invested in a second rooftop solar system, covering 96% of that site's daytime electricity
Finlay Beverages improved waste data and achieved zero waste to landfill as of mid-2024
Improvements in refrigerant reporting across the business
95% of waste recycled, recovered, or reused

SECURING VALIDATION BY THE SCIENCE BASED TARGETS INITIATIVE

A key achievement for Finlays in 2024 was having our near and long-term targets for reducing greenhouse gas emissions (GHG) validated and approved by the Science Based Targets initiative (SBTi), including our 2040 net-zero target. This made Finlays one of just 30 companies in the food and beverages processing sector to have an SBTi-approved net-zero target that includes targets for reducing emissions from Forestry, Land and Agriculture. More details on our targets can be found on the SBTi website.

The SBTi is a corporate climate action organization that enables companies and financial institutions worldwide to play their part in combating the climate crisis. It develops standards, tools, and guidance which allow companies to set GHG emissions reductions targets in line with limiting global warming to 1.5°C, to mitigate the worst impacts of climate change and reach net zero by 2050 at the latest.

Receiving validation of our targets by SBTi is a critical step on our journey to achieving net zero by 2040 and demonstrates Finlays’ commitment to act for the long term and protect the planet.

OUR 2024 ENVIRONMENTAL DATA

GHG EMISSIONS

Finlays understands the scale and urgency of climate change and the need to limit global warming to 1.5°C, in line with the Paris Agreement. We are striving to increase both our energy efficiency and our use of renewable energy to drive down our GHG emissions.

We quantify and report our organizational GHG emissions to the standards of the Greenhouse Gas Protocol and therefore report a location-based as well as a market-based figure for our Scope 2 emissions. In line with the GHG Protocol’s latest guidance, our report also discloses Scope 3 emissions and FLAG (emissions from forestry, land, and agricultural activities across our operations and value chain). Our data tables can be found in the next chapter.

GHG emissions from the supply chain (Scope 3) account for 96% of our total non-FLAG emissions. Similarly, our Scope 3 FLAG emissions represent 88% of our total FLAG emissions. Work has started on developing robust roadmaps for our three workstreams (Scope 1 & 2, Scope 3, and FLAG) with a view to reducing our emissions in line with science.

^{OUR 2024 ENVIRONMENTAL DATA}^{GHG emissions}

The graph focuses on greenhouse gas emissions in our operations. Scope 1 & 2 (market-based) emissions decreased by 15% in 2024 compared with 2023. Scope 2 emissions fell by 47.2% thanks to significant efforts to switch to renewable electricity sources across a number of different sites, in particular Finlays Argentina, Finlays Colombo, and Finlays Solutions, Kenya. In 2024, we also improved the quality of our reporting, specifically applying more accurate market-based emission factors, which further explains the decrease in our Scope 2 emissions versus 2023. Our Scope 1 emissions rose by 4.2%, mainly due to longer run times at our Finlays Solutions, US and Kenya sites, which resulted in higher natural gas and diesel consumption; an increase in production at Finlays Argentina’s sites, resulting in higher diesel consumption by vehicles during harvest; and improvements in the reporting of our refrigerant usage globally.

GHG EMISSIONS

^{Assurance Statement}

Bureau Veritas UK Limited (‘Bureau Veritas’) has been engaged by James Finlay Limited (“Finlays”) to provide limited assurance of its Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions data within the Finlays Sustainability Report 2024. The review covered the period 1 January – 31 December 2024. Bureau Veritas performed the work to a limited level of assurance in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised).

The full verification statement including the scope of work and Bureau Veritas’ assurance conclusion, methodology, exclusions and limitations, and a statement of independence and impartiality will be published alongside the Report and available here.

^{OUR 2024 ENVIRONMENTAL DATA}^Energy

Our energy usage remained consistent between 2023 and 2024, showing a 0.3% decrease. This was achieved despite longer operating hours at our biggest manufacturing plants over the year, reflecting the impact of some of our energy efficiency initiatives. Our use of non-renewable energy decreased by 3.9%. Despite a significant increase in the use of renewable electricity in 2024, our overall use of renewable energy increased by just 0.5%. This was due to a slight decrease in biomass consumption, which offset increases in solar, hydro, and biogas use.

^{OUR 2024 ENVIRONMENTAL DATA}^Electricity

We continue to make good progress toward our target of operating with 100% renewable electricity by 2030, with several milestones achieved during 2024 and further projects in the pipeline for 2025 and beyond. Finlays Argentina started purchasing renewable electricity (solar) for the first time in 2024, and Finlays Colombo installed a second solar system at its Haldummulla site, which was commissioned in October 2024. We also benefitted from a year of on-site solar electricity generation at Finlays Colombo’s Welisara site, after photovoltaic (PV) panels were commissioned in early 2024. Meanwhile, Finlays Solutions, Kenya covered 48% of its electricity needs through renewable sources (biogas, hydro, and solar), up from 33% in 2023 and 23% in 2022.

^{Figures include biogas and diesel consumed on-site to generate electricity. Electricity consumed from the national or local grid has been categorized as non-renewable, even if the grid mix contains a significant proportion of renewable sources.}

^{OUR 2024 ENVIRONMENTAL DATA}^Water

Our consumption of freshwater increased by 10.4% in 2024, driven mainly by significantly longer operating times at our tea and coffee extracts sites. These include our Finlays Solutions site in Kenya; the Finlay Solutions site in Hull (where decaffeinated production increased by 16% and we opened our cold brew plant for trials and cleaning); and the Finlays Solutions site in San Antonio, US.

The amount of rainwater and recycled water used decreased by 95.4% versus 2023. Rainwater and recycled water represents a very small proportion of our overall water use, and the decrease was due to water no longer being recycled at our Finlays Solutions site in Hull due to a change in drainage system at the end of 2023. All effluent, which is regularly tested in-house as well as by our supplier, is now returned to the municipal water treatment stations through regular drainage.

We continue to develop our approach to good water stewardship at our most material sites by improving metering and developing clear water balances, with a view to setting water targets at the end of 2025.

^{OUR 2024 ENVIRONMENTAL DATA}^Waste

Our operations generated 16% more waste in 2024 than in 2023. This was primarily driven by significantly longer operating times at our biggest manufacturing sites in Kenya, the US, and the UK. Waste data collection and management at our Finlay Beverages site also improved significantly.

Over the same period, waste sent to landfill across our sites decreased by 17% and reclaimed waste increased by 18%. Thanks to continued concerted efforts to improve waste segregation and divert waste from landfill, the overall proportion of waste reclaimed across our operations stood at 95% in 2024, up from 93% in 2023.

^{Reclaimed waste refers to waste that has been either recycled, recovered, or reused}

RENEWABLES REVOLUTION

CASE STUDY:

Switching sites to 100% renewable electricity (Finlays Argentina)

As of November 2024, six sites belonging to Finlays Argentina run on 100% renewable electricity. It’s a major step forward on our journey to reduce our carbon footprint, and the team worked hard to enable access to the Argentinian renewables market. They are now exploring how to switch over the rest of our sites.

RENEWABLES REVOLUTION

CASE STUDY:

Expanding use of solar energy to cut emissions (Finlays Colombo)

In October 2024, our Sri Lankan tea business installed a 180 kW roof-top solar system at its site in Haldummulla. This is the second such installation for Finlays Colombo, which already uses solar energy at its Welisara site.

Since becoming fully operational, the Haldummulla solar system has covered 96% of the factory’s daytime electricity needs, significantly reducing our emissions and contributing toward our target of cutting Scope 1 and 2 emissions by 50% by 2030.

Based on this success, the Finlays Colombo team now plans to add further capacity to the existing system at Welisara.

ENERGY FOR EFFICIENCIES

Across the business, we’ve been evaluating opportunities to improve energy efficiency and drive down our overall energy consumption.

CASE STUDY:

Finlays Solutions, (Hull, UK)

Our facility in Hull, UK, improved energy efficiency significantly in 2024, thanks to a comprehensive approach that made power usage a central focus across multiple projects over the course of the year.

Key measures implemented by the team included a more robust tracking system for electricity usage, replacing outdated equipment, and completing a power factor correction project.

While overall power usage increased (partly due to the opening of a new cold brew coffee plant), energy intensity—as measured by amount of power used per kg of product—fell by 13% for electricity and 14% for gas.

ENERGY FOR EFFICIENCIES CASE STUDIES

Across the business, we’ve been evaluating opportunities to improve energy efficiency and drive down our overall energy consumption.

Finlays Mombasa

Air conditioning is a major contributor to energy consumption in our business in Mombasa, Kenya. In 2024, we launched a pilot project to investigate the impact of switching to more energy-efficient air conditioners.

19 out of 63 units were replaced, with data showing a 50% cut in energy consumption for the new models. The team are now working on phasing out the remaining units.

Finlays Malawi

Our Malawian business is very small but sends large numbers of tea samples around the globe. In June 2024, it switched to a new type of airfreighting contract from our courier partner DHL which reduces emissions by 30% through carbon insetting.

In less than nine months, the team were able to remove 95kg of CO₂e from the airfreight of our tea samples to our three largest customers alone.

Finlays Solutions (Kenya)

At our tea extracts site in Kenya, we upgraded the pumps in the factory cooling tower and automated them by using a variable frequency drive for greater efficiency.

This led to a 17% reduction in energy use. To further improve energy efficiency, translucent roofing sheets were installed on the factory, reducing the need for electricity during the day.

CASE STUDY:

Transforming waste management as part of an award-winning sustainability drive (Finlay Beverages, UK)

In 2024, Finlay Beverages completely overhauled the way it manages and reports on waste. The objective was to gain full visibility on waste removal and volumes from its site, with a view to achieving zero waste to landfill backed by full reporting.

To get control of waste, the team created a clear governance structure, collated relevant data, and rationalized the number of waste suppliers across the site from 11 down to one. Suitable recovery and recycle options were identified using circular economy principles, including having our coffee jute sacks go to a recycling facility where the fibers are reclaimed for carpet manufacture. Crucially, a waste reporting tool was introduced to provide full visibility and substantiate any zero waste to landfill claims.

As a result, Finlay Beverages was able to hit its zero to landfill target in the second half of 2024, with 100% of waste now being recycled and nothing going to landfill.

Thanks in part to these efforts, Finlay Beverages won a major sustainability award at the 2024 Supply Chain Awards, organized by the UK’s Institute of Supply Chain Management. The judges highlighted Finlays’ ‘remarkable progress’ in areas such as recycle, reuse, and reclaim, and commended the business for its ‘strong commitment to sustainability’.

CASE STUDY:

Reducing waste and boosting soil health with a new composting site (Finlays Argentina)

To improve crop productivity and soil health, our Argentinian tea business built its own composting facility in 2024. The state-of-the art plant, which is located at our Argente CF tea field site, allows us to turn waste from our own factories, as well as waste from local industries, into high-quality compost with full traceability in every batch.

A significant amount of work went into getting this project off the ground, including undertaking an environmental study and public hearing; forging long-standing agreements with local industries to ensure a steady stream of waste material; employee training; and numerous production trials to adjust methodologies and improve results. Construction has now been completed, and we are excited to start compost production in 2025.

Once fully operational, the site will produce up to 4,000 metric tonnes of compost a year, improving the physical and biological structure of our soils and significantly reducing our FLAG emissions and dependence on external inputs.

^{ALIGNING BUSINESS STRATEGY TO SUPPORT PROGRESS}

Climate risks

In 2023 our parent company, John Swire & Sons Limited (Swire), undertook a climate risk assessment in line with the framework created by the Task Force on Climate-Related Financial Disclosures (TCFD). This task force was created to improve reporting of climate-related financial information. The assessment enhanced Swire’s climate risk and opportunity assessment methodologies and gave Finlays a better understanding of our own climate risks and opportunities. During 2024 our Corporate Risk Register (CRR) was updated to include the most material climate-related risks to Finlays. The CRR will enable us to review our processes in line with best practice and inform our future disclosures. Further information on the CRR can be found in the Governance chapter of this report.

Good water stewardship

Water is essential to life and a basic human right – and it is increasingly under stress. Competing demands from agriculture, business, and communities, along with the effects of climate change, are putting growing pressure on this precious resource, prompting widespread regional and global concern. Water is also essential to the beverages industry and Finlays, and we take our responsibility seriously to preserve its availability and quality. As part of Sustainable Future 2030, we have started shaping our approach to good water stewardship. In 2024, we worked with our business units to maintain their water balances throughout the year and report on them, and evaluated opportunities for improved water metering. Similar to our work on GHG emissions, our aim is to develop an ambitious plan for good water stewardship, with credible targets in place by 2026.

Shadow Carbon Price (SCP)

With guidance from our parent company Swire, Finlays has implemented a shadow carbon price (SCP) since January 2024, applied to specific financial reports and CapEx/project appraisals. Shadow carbon pricing assigns a hypothetical cost to carbon emissions and allows the potential costs to be factored into decision making, serving as a complementary short-term tool to better identify carbon exposure and inform decarbonization plans. The SCP will help us better understand and assess carbon risks, and supports Swire’s aim to reach net zero by 2050 or earlier. The price was set at US$100 per tonne of carbon dioxide equivalent (tCO₂e) and will increase annually by a fixed value of US$10 from 2025.