Case Study: Highland Spring

This case study is brought to you in association with Burness Paull.

Head of Sustainability must be key role in a business like Highland Spring, how long have you been in your role and what does your remit entail?

I’ve been with HSG for six years and joined the business as a senior financial analyst. However, over the past four years I have been more and more involved in our sustainability projects so it was a natural progression to take up this new role in January 2021. The company has always had incredibly strong environmental oversight. The ever-increasing focus on environmental challenges and climate change led to the decision to appoint someone to directly manage our transition to net zero and ensure our efforts on long term and permanent carbon reductions are fully focused.

What is your primary focus within the current drive towards a low carbon economy?  

Since it was founded in 1979 HSG’s core purpose has always been to provide healthy hydration in an environmentally sustainable way. So while that’s not new, the climate change imperative means that we have to look at every aspect of the business and how we can minimise our carbon footprint through credible and robust environmental policies. Sustainability is at the heart of everything we do which is why the “Good Shopping Guide” has ranked Highland Spring Group the leading ethical bottled water provider for the past 13 years running with a perfect score of 100. As the UK’s leading producer of natural source water, we take our role in the circular economy seriously and want to make sure all bottles stay in the loop and provide a continuous supply of high-quality sustainable materials to use in our products. A PET (polyethylene terephthalate) bottle with 100% rPET (recycled) is approximately two thirds the carbon footprint of one made from 100% virgin PET. Though responsible disposal, we can harness the benefits of materials which will in turn, positively impact the environment for future generations. Every tonne plastic recycled saves 1.5 tonnes carbon which is why we actively help consumers understand that plastic is a valuable material through our consumer communications. The introduction of a well-designed Deposit Return Scheme in Scotland, England and Wales will help reduce litter and increasing recycling rates, whilst also improving the availability of high quality, UK sourced recycled materials. This will help HSG on our journey towards using 100% recycled content across our entire product range by 2025. We have also recently announced our ambition to achieve a 50% reduction in greenhouse gas emissions by 2030, and to be net zero by 2040. In addition, the business has pledged to be carbon neutral against scope 1 and 2 market-based emissions by the end of 2021.

What is your view on the country’s net zero targets and how will that impact / how is that impacting on your business and others in your sector?  

We mirror Scottish/UK government aspirations to tackle the twin crisis of climate change and biodiversity loss and continue to work hard tirelessly to reduce our environmental footprint.  We were pleased to receive support from the Scottish and UK Governments when we announced our net zero ambition recently. The company is fully committed to engaging with customers and the wider industry on sustainability issues and the journey to net zero. For example, we were the first major brand to launch a 100% recycled and recyclable bottle and first in category to trial 100% recycled shrink wrap. Confusion around the term single use plastic can lead to well-meaning people putting 100% recyclable PET plastic drinks bottles into the general waste which is likely to have an adverse effect on the recycling rates of plastic drinks containers in the UK. We supported Hubbub on positive and engaging behaviour change initiatives in Leeds, Swansea and Edinburgh, to reduce litter and encourage the careful and responsible disposal of used products. Our view is that policy makers, public and private organisations and consumers all have a role to play in the journey to net zero, which in turn will benefit everyone. Producers are only one part of the puzzle in this area. We need the whole industry supply chain, Government, councils and NGOs to find a consistent means of communicating with consumers on how and where to recycle and to improve the infrastructure behind the recycling network. Along with others in industry we have been working with Scottish and UK Governments on the design and implementation of DRS which will support in driving up recycling rates and reducing litter.

What has been the main driver behind steps Highland Spring has been taking in this space – e.g. is it considerations around the “E” from ESG; is it a desire to tackle climate change / contribute to tackling the climate emergency; is it a financial imperative; or all of these considerations?

Any business investment decisions made at HSG are taken to balance people, planet and profit and must have positive wider community benefits, minimise our environmental impact, and ensure the long-term sustainability of the business. It does make clear business sense to invest in sustainability. Benefits such as energy efficiency and raw material savings will in turn reduces reliance on natural resources. Investment in sustainability will also futureproof the business to make sure it’s resilient in the face of emerging sustainability risks. Adopting sustainability practices can also help attract and retain employees and suppliers who want to work with responsible companies and consumers are increasingly aware of sustainability and actively choose ethical and responsible brands like HSG whenever they can.

We’re familiar with the Eco bottle range and focus on recycling, and we’re aware of Highland Spring’s new rail freight facility.  Can you tell us a bit more about these projects, for example where the ideas initiated from, and how did you go about implementing them?

Following a hugely successful trial in 2018, the 100% recycled and recyclable eco bottle became a permanent part of our range in 2019. The Eco range has been very well received by suppliers and customers alike which is great. The eco bottle is now available in a 50cl, 75cl and kids format and by the end of 2021, this will be extended to all large and small bottle sizes. Availability of quality recycled materials continues to be the limiting factor however, the implementation of a well-designed deposit return scheme will increase availability of quality recycled material to use in our bottles. Our rail project was first mooted many years ago when exploring how we could transport goods in the most environmentally sustainable way. The project has been made possible through a partnership with leading logistics company John G Russell, who have been a great help in advising us on how to futureproof our business form a logistics point of view. Strong collaborative working relationship with Network Rail and Transport Scotland have also been the key to success. The rail is very much an environmental project as there is a long payback period from a financial perspective, but the benefits to the local and wider community are significant. Once operational, our dedicated rail freight facility will remove 8,000 HGVs from the road each year. With 75% less CO₂ for every tonne of freight moved by rail, this will reduce our carbon footprint by 3,200 tonnes per year. As well as moving our products more sustainably we will also be able to bring raw materials to site by rail, so there’s a real multiplier effect. Future electrification of rail freight will reduce carbon emissions associated with transportation by a further 50%. The project is a really superb example of how business and government can work together to create positive social, economic and environmental benefits through shared objectives.

How do you plan to ensure sustainability remains at the heart of business decisions for Highland Spring in the future?

We have three key pillars that are embedded in the company’s strategy, which are: Environmental Stewardship, Closing the Loop and Journey to Net Zero. We want to help influence positive behaviour change by educating consumers on sustainability, and helping them see plastic as a valuable resource that should not be treated as waste. A big focus for us going forward will be biodiversity. It is intrinsically linked with the global climate crisis and there is a lot than can be done locally to help. We will be partnering with Forth Rivers Trust to carry out scientific surveys within our catchment area to establish a biodiversity baseline. Following that, we will implement a range of recommendations and target a net increase of flora, fauna and wildlife using Nature Based Solutions by 2025. These initiatives are part of our wider sustainability initiatives, and demonstrate investment is not all centred on generating more profit – it is about the company doing the right thing in the right way to protect the planet long-term.

Read more of the Burness Paull Tales from the Larder series here.