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Environmental report

OVERVIEW

As a responsible business, we recognise our duty to safeguard the planet for future generations. With this in mind, we advocate for our customers’ right to a beautiful home – whether in their living spaces or within the communities and natural landscapes we are a part of.

Our Group is committed to sustainability, actively addressing our environmental impact, enhancing eco-efficiency, and offering products that support our customers to live sustainably. Aligned with the United Nations Sustainable Development Goals ("SDGs"), we strive to contribute to a more sustainable future for all. Upholding the principles of the UN Global Compact, we also seek confirmation of compliance from our major external suppliers.

This report illustrates our efforts to promote sustainable development within our South African operations.

Our environment risk reduction plan

The Group continuously develops its overarching environmental sustainability framework including metrics, targets and reporting. Forums have been established to monitor progress, innovate and work towards achieving the targets. Improved tracking of relevant metrics against targets is ongoing.

The Group is committed to developing and sourcing products that not only require fewer resources to produce, but enable our customers to save water and electricity and reduce waste. We continue to innovate and invest in technology to use our resources more efficiently.

Reducing, reusing, recycling and recovering are key principles to limit our waste and minimise our contribution to emissions, effluents and landfill.

In the year under review, a range of initiatives were implemented to advance our ongoing endeavour to reduce the Group's environmental impact.

Retail and supply chain operations

Awareness

In our retail and supply chain businesses, we advocate for eco-friendly practices such as recycling, the efficient utilisation of water and energy, the integration of green technologies, and environmentally conscious construction techniques throughout our operations. The responsible sourcing of our products also remains a key focus. Throughout the year, we have actively engaged in various initiatives to raise awareness, including conducting educational talks at brand conferences, incorporating ESG content into induction presentations, and convening a Group environmental forum aimed at monitoring our progress toward achieving environmental goals.

Improved monitoring through Smart Meters

The Group initiated a Smart Meter project in the prior financial year that records the consumption of water and electricity in real time. The meters provide greater clarity on consumption behaviour in stores and assist with the early detection of resource waste. This project minimises reliance on municipal readings and mitigates against billing errors due to incorrect meter readings. To date, meters are installed in 38 buildings across the Group network.

Energy management

The Group is actively working to reduce its reliance on electricity from the national grid and increase its use of clean energy sources. A total of 48 retail stores are fitted with solar PV systems. The Group has three entirely off-grid properties, and seven stores with hybrid battery back-up installations, currently serving as pilot cases to determine the feasibility of rolling out similar systems. During the review period, installations were completed at CTM Brits, CTM Springfield, TopT Mabopane and TopT Rustenburg.

Of the total energy consumed by our retail stores, 13,32% is now supplied by solar energy, an 8,11% improvement on the prior year. The Properties division will continue to monitor and assess technological developments to ensure optimum solutions to align with the Group's sustainability goals and targets.

Water management

Climate change, deteriorating infrastructure and poor municipal service delivery levels are increasingly impacting on our business's access to water. The Group continues to investigate and implement measures to mitigate this potential risk to our operations. Boreholes are installed on all new-build sites, where geotechnical soil conditions allow. While the water is tested with each installation to determine the quality, usage is restricted to irrigation, sanitation and evaporative cooling. Smart water meters are used to measure and encourage responsible consumption.

We will continue to install boreholes on our owned properties. By the end of the 2025 financial year, all boreholes will have check-meters installed to monitor consumption and reporting.

Waste management

Adopting the principles of a circular economy, we strive to minimise, reuse, and recycle all waste generated by our business. In Gauteng, 60% of CTM stores and 86% of Italtile Retail stores implement recycling programmes. In total, 26 tonnes of waste from these stores were recycled during the review period.

Green buildings

In our construction projects, we continue to explore alternative eco-friendly building materials, energy-efficient equipment, and optimal waste management practices. When redevelopments and alterations are done, we reuse steel and crush clean building rubble from demolitions for fill in earthworks.

Manufacturing operations

CERAMIC INDUSTRIES

Waste management

Ceramic Industries uses borehole water for production purposes, and monitoring water consumption is a priority. Automated meters have been installed at the Vereeniging factories and real-time access to data has assisted with the detection of underground leaks and led to consumption savings.

Recycled water is used in Ceramic's water treatment facilities in Vereeniging and Hammanskraal. Most recently, stirrers have been installed at the Pegasus and Gryphon factories, which have reduced the amount of wastewater discharged by maintaining the water quality evenly through prevention of sedimentation.

Energy management

The gas-saving heat-recovery technology implemented in our factories uses recycled heat to substitute gas for drying purposes. We have recently implemented an automated system in our Vereeniging factories that identifies gas in the heat-recovery system, and immediately alerts operators, enabling them to manage technical issues promptly, thereby reducing downtime and improving efficiencies.

Ceramic continues to invest in solar technology to reduce its dependence on the grid. Gryphon, Samca Floor and Samca Wall now all have active solar PV generation systems. Solar generated by the business in the review period was higher than in the prior two years, affording a concomitant decrease in the consumption of grid electricity.

Environmentally sensitive packaging

During the review period, Ceramic implemented a pallet recycling project aimed at saving on packaging costs and preserving natural resources. The project was conducted by Betta Sanitaryware, in conjunction with the Group's stores in Gauteng and North West, whereby Betta collected used pallets and refurbished them at an in-house workshop. From the commencement of the project in November 2023, Betta has recovered an average of 2 400 pallets per month. The tile manufacturing factories have subsequently joined the initiative, and account for an average of 38% of the overall pallets recycled.

Quarry rehabilitation

Ceramic's policy is to minimise the impact of its operations on the environment, through concurrent rehabilitation during mining activities. In the past financial year, rehabilitation through backfilling was undertaken at the Steelpark, Driefontein and Cyferfontein quarries. Rehabilitation of end-of-life quarries for other suitable purposes is also conducted.

Green buildings and production efficiency

The Vitro production line replacement project commenced in 2023 and is being commissioned in phases. The new production line will replace outdated equipment, which will facilitate improved production efficiency through reduced consumption of energy and raw materials and result in less waste. It is hoped that the energy savings achieved will qualify the factory for incentives offered by section 12L of the South African Income Tax Act.

EZEE TILE

Vulcania plant

Energy-efficient, environmentally conscious practices, equipment, and processes were taken into consideration throughout the construction of the new flagship factory in Vulcania, Gauteng, and we anticipate environmentally positive practices to become core to our operation.

Energy management

At the Vulcania factory, energy management practices include constant monitoring of the utilisation of the solar system to reduce grid consumption. The factory also has motion-detection lighting to save energy.

During the financial year, there has been a focus on improving the efficiency of the sand-drying operations to reduce volumes of combustible fluid (i.e. diesel and paraffin) being burnt.

Dust emissions mitigation at sand-drying plants

In 2024, wet scrubbers were installed at the Cape Town and Mokopane Ezee Tile sites. There was a noticeable decrease in dust emissions as a result. Management is in the process of planning the commissioning of scrubbers at its other manufacturing sites.

Waste management

Ezee Tile Vulcania has implemented a waste separation process which assists in recycling plastic and paper commodities. This waste separation process will be improved in the new financial year to accommodate all waste streams, including food waste. The waste separation projects will be rolled out to all Ezee Tile branches in the future.

Water management

We have commissioned a water treatment plant for our paint production facility at Vulcania. The plant recycles a significant portion of waste water generated through production and cleaning. This process reduces discharge into municipal water networks and limits excessive use of fresh water from water mains. All water discharged is safe treated water.

We have a borehole and rainwater harvesting tanks at the Vulcania site that are used for irrigation.

In future, we plan to install meters at various locations at Vulcania, such as water treatment, canteens and ablution stations, to obtain information on consumption. We will explore the possibilities of separating the paint plant and canteen water lines to receive only fresh municipal water, while the rest of the factory will use borehole water. Borehole water analysis is key to the project's success.

Water consumption is minimal at all other Ezee Tile branches, as liquid products are not produced at these facilities.

Innovation for the environment

We have successfully replaced ammonia as a pH controller used in the paint production process with a less corrosive Discoat product substitute.

Transport management system

We implemented a Transport Management System in Vulcania during the 2024 financial year, which is currently being rolled out to other South African Ezee Tile sites. This will enhance load efficiency and route optimisation, thus reducing downstream emissions.

Carbon footprint report

The 2024 financial year carbon footprint analysis focuses on the main emitters within the Group, being the manufacturing and retail entities. The reported footprint results consist of the following emissions:

  • direct emissions from fossil fuels and manufacturing processes (scope 1);
  • indirect emissions from purchased electricity (scope 2); and
  • indirect emissions associated with activities supporting the business entities (scope 3) which includes contractor logistics, business travel, water and paper usage.

The emissions associated with the Group's activities were calculated to align with South African legislative requirements. Scope 1 emissions are determined according to the National GHG Emissions Reporting Regulations as issued by the DFFE and the Carbon Tax Act. Scope 2 emissions are based on Eskom's latest grid emission factor. The scope 3 emissions are determined in accordance with the UK's Department for Environment, Food and Rural Affairs ("DEFRA") guidelines. Generally, all calculations align with The Greenhouse Gas Protocol and ISO 14064 standards.

OVERVIEW OF THE 2024 FINANCIAL YEAR CARBON FOOTPRINT ASSESSMENT

The carbon footprint assessment categorised the Group's results into three main entities: Ceramic Industries (Manufacturing), Retail stores (consisting of the CTM, Italtile Retail and TopT stores and retail distribution centres owned by the Group), and Ezee Tile.

The carbon footprint of Manufacturing, Retail, and Ezee Tile reduced by 7,5%, 0,5%, and 0,4% respectively in terms of total emissions compared to the previous financial year. The main driver behind the overall footprint reduction was a decrease in emissions for Stationary, Downstream logistics and Electricity. This report presents an overview of the Group's footprint with selective detailed analysis focused on explaining significant year-on-year changes.

Results and observations

The image below illustrates each entity's contribution to the overall footprint of 371 775 tCO2e which consists of scope 1, scope 2 and selected scope 3 emissions.

FY2024 emissions per entity (tCO2e and % of total)
FY2024 emissions per scope (tCO2e and % of total)

The figures below present a comparison of results for the 2023 and 2024 financial years.

Italtile Group – annual carbon footprint

The image to the right gives a breakdown of the Group's emissions based on the various source categories. The specified fuels (i.e., burner, diesel, paraffin, petrol and Sasol gas) all fall under the classification "Stationary combustion" emission. These are all scope 1 emission sources while electricity is a scope 2 emissions source. The selected scope 3 emissions sources are "Upstream logistics" representing emissions from service providers transporting goods from source to facility and "Downstream logistics" which represent the transport of goods to customers as well as the movement of goods between different retail stores. The remaining categories represent indirect emissions resulting from business travel, paper and water use.

Breakdown of FY2024 emissions (tCO2e and % of total)

The different classes of emissions are presented in the table below:

Classification Description FY2024
(tCO2e)
FY2023
(tCO2e)
% change
Scope 1 Mobile 2 859 3 032 (5,7)
Stationary 164 587 183 003 (10,0)
Process 6 271 6 304 (0,5)
Scope 2 Electricity 127 890 138 482 (7,6)
Scope 3* Upstream logistics 20 985 21 921 (4,3)
Downstream logistics 44 679 48 817 (8,5)
Business travel 2 424 2 501 (3,1)
Paper and Water 2 081 1 689 23,2
Total 371 775 405 749 (8,4)
* The quantification of scope 3 emissions remains challenging considering the complexity of Up- and Downstream logistic supply chains.

Stationary fuel (scope 1) and Electricity (scope 2)

Emissions from electricity use is 34% of the Group's overall footprint. Year-on-year changes in emissions associated with electricity consumption contributed 34% to the overall movement in the Group's carbon footprint. The specific year-on-year change of electricity-related emissions (isolated from the rest of the footprint) has seen a decrease in electricity consumption, attributable to the following:

  • Eskom's grid emission factor decreased by 2,88%, which in turn decreased the emissions associated with every kilowatt hour of electricity the Group purchased from Eskom and local municipalities;
  • the Group managed to increase its use of solar-generated electricity by 20,68% (year-on-year), thereby reducing its reliance on Eskom's electricity supply. This increase in electricity from solar generation per site is illustrated in the graph below;
  • Onsite diesel consumption by Retail also decreased as a result of the lower generator capacity needed at the sites due to lower load shedding in FY2024;
  • An increase in manufacturing fuel can be attributed to an increase in consumption by Gryphon, Vitro and Pegasus, Samca+ and Samca Wall as well as Ezee Tile brought on by the sand quarry purchased during the year; and
  • The decrease in onsite consumption of fuel by Retail and the increase in Manufacturing is illustrated below:
Electricity from solar generation (kWh)
Onsite diesel consumption (litres)

Upstream logistics (scope 3)

The emissions associated with this activity contribute 5,64% to the overall footprint. A 4,3% decrease was noted for overall Upstream logistics. The decrease is due to a reduction in imports, production, and sales volumes.

Emissions (tCO2e) per Upstream logistics activities

Downstream logistics (scope 3)

The emissions associated with this activity contribute 12% to the overall footprint. The biggest contributors to Downstream logistics-linked emissions are Ezee Tile (down by 16%) and the Retail stores (up by 13%). The increase in emissions in Retail is due to more frequent inter-branch transfers while the decrease at Ezee Tile is attributable to the implementation of a transport management system at the business which improved route planning and load optimisation.

Emissions (tCO2e) per Downstream road freight activities

Performance assessment of specific entities

Ceramic Industries tile and sanitaryware factories

The scope 1 and 2 emissions associated with the Ceramic Industries' factories are responsible for 71,36% of the Group's overall footprint. Regular investment in new technologies, energy efficiency and new products ensured that these factories showed a continued year-on-year reduction in emissions. Independent assessment has enabled the Group to claim income tax deductions under the section 12L tax incentive. Savings to date are illustrated below:

Site Saving
(kWh)
Before-tax
benefit
R
After-tax
benefit
R
Vitro 2 988 165 2 838 757 766 464
SAMCA+ 8 676 103 8 242 298 2 225 420

A detailed assessment of Ceramic Industries' tile factories performance in the review period showed a decrease in production combined with a decrease in facility level electricity and natural gas consumption (combined energy consumption decreased by 8,6%). Sanitaryware production increased whereas energy consumption decreased by 2,4%, supported by the increase in solar use. In both cases the in-production versus energy consumption indicates a slight decrease in overall manufacturing efficiency of 1,7%. The tables below illustrate the year-on-year performance intensity. The decrease in tile volumes and sales also impacted on intensity.

FY2024 Tile factory emissions intensity (kgCO2e per m2 of tile produced)
FY2024 Sanitaryware and bath factory emissions intensity (kgCO2e per piece produced)

Retail stores

The scope 1 and 2 emissions associated with the Italtile, CTM, and TopT stores are responsible for 3,16% of the Group's overall footprint. Effectively all these emissions are linked to electricity consumption with backup generators and forklifts adding to the overall emissions. Comparing the emissions intensity of the 2024 financial year to 2023 shows an increase of 1,91% in tCO2e/m2 which can be linked to the impact of lower sales volumes offset by reduced load shedding and increased solar power generation. In total the stores generated 2,04 GWh of electricity from solar.

Emissions (tCO2e) per GLA (m2)
* Note results only represent stores that are owned by the Group, franchised units are excluded from the reporting boundary as per the GHG protocol.

EZEE TILE

The scope 1 and 2 emissions associated with the Ezee Tile Adhesive factories are responsible for 2,13% of the Group’s overall footprint. The overall production intensity increased by 39,6%. The increase can be attributed to the additional site (Silica Quartz), which increased the total energy related emissions by 39,9%.

Overall production intensity (kgCO2e/tonne Adhesive and Grout)

The previous sections assessed the performance of different parts of the Group using metrics that are appropriate for the specific activities. The results below present an additional emissions intensity view based on more generalised metrics: Employment, Retail sales and Group turnover. It is noted that there was a decrease in emissions per personnel for all three entities, while a decrease was noted for emissions per turnover for 2024.

Ezee Tile's headcount reduced significantly due to the restructuring undertaken with the commissioning of the new plant in Vulcania.

Assessment of year-on-year changes based on normalised emissions intensities (averages of the 2023 financial year used for sales and turnover)

Emissions (tCO2e) per personnel employed
Emissions (tCO2e) per sales (Rm)
Emissions (tCO2e) per annual turnover (Rm)

Compliance

Environmental incidents

Over the past year, no material environmental complaints were received and no environmental incidents took place in the manufacturing, retail or supply chain operations.

Carbon Tax

The recent 2023 carbon tax payments (due annually in July) made to SARS covers the emissions from 1 January 2023 to 31 December 2023. Presently, the carbon tax applies to selected activities covering scope 1 emissions and only directly affects the Group's manufacturing entities. The carbon tax amounts due per entity for the 2023 tax period were: Ceramic Industries (SA): R6 206 482,19 and Ezee Tile: R138 379,44.

Carbon tax also presents an indirect exposure risk through increasing the costs of purchased fuels, electricity, and general services. Currently, the headline rate of carbon tax is set to increase to R462/tCO2e by 2030 and will target US$120/tCO2e by 2050.

Climate Change Act

In July 2024, the Climate Change Act 22 of 2024 was signed into law, however, is not yet in effect, introducing mandatory carbon budgets. This Act sets the legally binding emission-reduction targets to limit overall greenhouse gas emissions. Companies will therefore have to adhere to their allocated carbon budget, which will be an assigned amount of greenhouse gas emissions allocated to the company over a period, with the inclusion of potential penalties for exceeding given budgets. These increased costs associated with fossil fuel use continue to motivate the uptake of energy efficiency and alternative energy projects. The sectors for inclusion and timelines are still to be gazetted.

The Group will consider the implementation of the latest guidelines of this newly promulgated Act.

Extended Producer Responsibility

The South African Extended Producer Responsibility ("EPR") Regulations are part of the National Environmental Management: Waste Act of 2008 (Act no 59 of 2008) and impact entities within the value chain of various sectors, including electrical and electronic equipment, lighting, paper, packaging, and some single-use products. Producers, brands, and importers of specified products exceeding prescribed thresholds are mandated to comply with the requirements outlined by the EPR Regulations. The Group has registered with the DFFE as a Producer for each of the Producer categories and has selected a Producer Responsibility Organisation ("PRO") where ongoing fees for qualifying items are paid bi-annually. A total of R300 200,71 was paid to the PRO in the last reporting period.

  2024       2023 2022 2021

Carbon footprint analysis

Ceramic
Industries
Ezee
Tile
Retail
stores
Total Total Total Total
Total direct energy consumption (gigajoules) – non-renewables 2 892 741 46 426 13 807 2 952 974 3 282 344 3 100 000 3 243 887
Total direct energy consumption (gigajoules) – renewables 1 445 222 566 2 233 1 850 1 194 #
Total direct energy consumption (gigajoules) – all fuels reported 2 894 186 46 648 14 373 2 955 207 3 284 194 3 101 194 3 243 887
Total direct energy consumption (gigajoules) – all fuels – calculated 2 894 186 46 648 14 373 2 955 207 3 282 344 # #
Percentage of direct energy consumption from renewable fuels 0,0756% 0,0563% 0,0385% #
Direct energy efficiency: total direct energy consumed per person hour worked (kJ/PHW) 1 454 154 6 605 564 641 681
Total volume of electricity purchased (MWh) – excluding self-generated from solar, wind or other sources 110 435 4 938 11 250 126 623 133 156 132 502 129 794
Total volume of electricity self-generated (MWh) – i.e. from solar, wind or other sources 5 202 799 2 037 8 038 6 660 2 536 506
Total volume of electricity consumed (MWh) – purchased + self-generated – calculated 115 637 5 737 13 287 134 661 139 817 135 038 130 300
Percentage of electricity consumed that was self-generated 4,50% 13,92% 15,33% 5,97% 4,76% 1,88% 0,39%
Electricity efficiency: average electricity consumed per person hour worked (kWh/PHW) 58,08 18,91 5,13 27,57 24,03 27,92 27,34
Total indirect energy consumption (i.e. electricity) in gigajoules – calculated 4 416 294 20 652 47 835 4 484 781 503 340 477 007 467 258
Total direct and indirect energy (i.e. electricity) energy consumption (gigajoules) – calculated 3 310 479 67 300 62 208 3 439 987 3 787 534 3 578 201 3 711 145
Total energy efficiency: Total direct energy and indirect energy consumed per person hour worked (kJ/PHW) 1 663 222 24 704 651 740 779
Total carbon emissions (tonnes CO2e) – scope 1 169 240 3 415 1 062 173 717 192 339 193 658 195 470
Carbon emissions (tonnes CO2e ) – scope 2 111 539 4 987 11 363 127 889 138 482 138 112 130 307
Carbon emissions (tonnes CO2e ) – scope 3 12 181 31 785 26 202 70 168 74 927 118 684 109 501
Total carbon emissions (tonnes CO2e) 292 961 40 188 38 627 371 776 405 749 450 453 435 279
Carbon intensity: Average volume of carbon emissions per person hour worked (tonnes CO2e/PHW) 0,15 0,13 0,01 0,08 0,07 0,09 0,09

# Not measured