Carbon Reduction Plan for Supply Chain Compliance

1. Commitment to Achieving Net Zero

Our organisation is fully committed to achieving net-zero greenhouse gas (GHG) emissions in line with the UK Government’s 2050 target and the NHS Supply Chain’s carbon reduction objectives. As part of this commitment, we aim to reduce emissions across our operations and supply chain while supporting innovation to reach these goals sooner where possible.

2. Baseline Emissions Footprint

Our current baseline emissions are calculated for the shipment of foam cushions and mattresses and are based upon the activity of the company in the calendar year ending 31st December 2024. These calculations consider emissions across all relevant scopes (1, 2, and 3) in line with the Greenhouse Gas (GHG) Protocol, providing a comprehensive overview of our carbon impact.

Scope 1 - Direct Emissions: Minimal or negligible direct emissions from company-owned or controlled sources (e.g., vehicles or on-site fuel combustion).
Scope 2 - Indirect Emissions from Energy Use: Scope 2 emissions refer to indirect emissions resulting from the consumption of purchased electricity, steam, heating, or cooling by the company. We do not own or operate facilities consuming purchased energy within our organisational boundaries, so we do not generate Scope 2 emissions. This is because third parties provide warehousing and fulfilment services, and their emissions are categorised under Scope 3.
Scope 3 - Indirect Emissions in the Value Chain: These emissions encompass all other significant activities within the value chain, including transport, manufacturing, warehousing, and end-of-life treatment of products.

We have produced a comprehensive Caversham Health Carbon Emissions Report (“CHCER”) - see Schedule 1 - which calculates both Absolute and Intensity Scope 3 Emissions for our operations in the Baseline Year ended 31 December 2024. The CHCER explains our approach, methodology, sources and calculation methods. In this report, we have also set out in more detail how we plan to develop our data and track our KPIs. As noted, the CHCER represents Schedule 1 to this Carbon Reduction Plan.

In summary (from the CHCER)

A. Absolute - the estimated total Scope 3 emissions of Caversham Health in the Baseline period

Manufacturing Emissions (see Schedule 1, Section 4)
This reflects combined Scope 3 emissions arising from the manufacture of our products in our two Fengzhou China located contract manufacturer locations.
- Estimated at 10,098 kg CO₂e

Transport Emissions (see Schedule 1, Section 5)
This reflects emissions arising from the transfer of our products by both Road and Sea Freight from our manufacturing partner locations to our Fulfilment Operations partners in the UK, via the Felixstowe port of entry.
- Estimated at 1,448 kg CO₂e

Warehousing Emissions (see Schedule 1, Section 6)
This reflects emissions from the energy use associated with storing products at Amazon Fulfilment Centres in the UK. As this activity is managed by a third party, it is classified under Scope 3. As noted above, we have established both the Absolute and Intensity emissions in the Baseline year from the Warehousing operations of our fulfillment partner.
- Estimated at 49.1 kg CO₂e

End-of-Life (EoL) Emissions (see Schedule 1, Section 7)
This reflects emissions from the disposal of our products at the end of their useful lives, and takes account of the most likely method and location of disposal.
- Estimated at 3,672 kg CO₂e

B. Intensity - measures the Scope 3 emissions produced by Caversham per unit of Revenue (EpR) and unit of Product (EpP)

Emissions per £1,000 of Revenue (EpR) - Estimated at 125.5 kg CO₂e
Emissions per Cushion (EpPc) - Estimated at 4.4 kg CO₂e
Emissions per Mattress (EpPm) - Estimated at 44.4 kg CO₂e

As noted above, to improve transparency, the CHCER that accompanies this CRP explains the workings and methodologies we have used to calculate Caversham Health emissions. In the CHCER, we outline key assumptions, data sources, and calculation methodologies, such as the decisions we have taken over whether to use EEIO models or materials-based approaches. By providing this level of detail, we have aimed to support transparency and facilitate an understanding of our emissions footprint.

3. Carbon Reduction Footprints

As we intend to establish a close and significant relationship with the UK NHS, in establishing our Carbon Reduction Targets, we have had regard to the NHS England Supply Chain Road map.

Those Emissions we control directly

Our Scope 1 Direct emissions are currently zero. Even with the growth of our operations set out in more detail below, we expect Scope 1 to remain at zero throughout the Road Map period.

Scope 2. We have shared office space with our parent company. Consequently, all of our Electricity and Heating emissions are classed at Scope 3 and are minimal. Further, our parent company has supply tariffs which enable carbon offset arrangements to be put in place.

With regard to other Scope 2 categories, as well as Scope 3 categories, which we control directly, the only relevant emissions relate to Business Travel (Scope 3). Our employees operate a 100% EV car fleet. We also use train travel infrequently which, enables carbon offset on a journey-by-journey basis. Similarly, whilst this didn’t happen in the Baseline year, long-haul flights connected with the periodic visits to our Chinese suppliers (necessary in order to maintain oversight not least of their carbon and social performance) will be kept to a minimum and offset on a journey-by-journey basis.

Our pathway above compares to the NHS’s own target of zero by 2040 and to reach an 80% reduction in the 2028-2032 period.

Those Emissions we do not control directly

These relate to Scope 3 and represent the substantial focus of our Baseline period measures (see Schedule 1) as well as the setting of stretching and achievable targets as explained below.

By 2027/28: Achieve significant progress in reducing emissions in line with NHS England’s interim milestones. We have already established a comprehensive Emissions measure in the baseline year, both Absolute and Intensity-based, and split these across our two principal product classes (Cushions and Mattresses). We will now continuously refine our Scope 3 measurement approach (see our methodology explained in Schedule 1) as improved data sets are available to enable more accurate differentiation between our product range as it expands with regards to carbon emissions arising from each Scope 3 category. This refinement will help us better target reductions and align with NHS Supply Chain’s reporting requirements.

By 2030: Reduce total Emissions Intensity (i.e. EpR and EpP) by 50%.

We are a growing business with ambitions to increase revenues 5+ fold in the next 3 years. Consequently, whilst we are concerned to reduce our Absolute emissions over the longer term, we believe that Emissions Intensity (kgCO2e / Revenue unit and /Units sold) is a measure where we can demonstrate ambitious reductions in our carbon footprint and at the same time fulfil our growth ambitions.

Focus: The reduction will span all four emissions drivers in our supply chain (outlined in Section 4). We will collaborate with our current and future partners across these drivers and ensure that sourcing decisions in manufacturing, transport, and storage prioritise suppliers and partners with a clear and deliverable pathway on carbon emissions consistent with our targets.

Target: 62.5 kg CO₂e per £1,000 of Revenue (based on a 50% reduction from our 2024/25 baseline overall Intensity-based Emissions of 125kg CO₂e per £1,000 of Revenue, as summarised in Section 2 of Schedule 1).
Target: 2.2 kg CO₂e per cushion (based on a 50% reduction from our 2024/25 baseline overall Intensity based Emissions of 4.4kg CO₂e per Cushion unit, as summarised in Section 2 of Schedule 1).
Target: 22.0 kg CO₂e per cushion (based on a 50% reduction from our 2024/25 baseline overall Intensity based Emissions of 44.4kg CO₂e per Mattress unit, as summarised in Section 2 of Schedule 1).

By 2045: Achieve net-zero Scope 3 emissions across all operations and supply chain activities for both Absolute and Intensity KPIs.

Focus: As with our 2030 targets, the focus across the Scope 3 Emission Drivers (Section 4 of this document) will continue to be at the heart of our decision-making. We will rigorously evaluate partner selection, audit and assess suppliers, and prioritise the design of new products alongside the evolution of our existing product range. This holistic approach ensures we meet net-zero goals while maintaining alignment with NHS Supply Chain’s expectations.

Target: 0 kg CO₂e (net-zero status achieved by balancing residual emissions with carbon removal initiatives) - Absolute and Intensity measured.

NHS England has set its Carbon Footprint Plus Target of Net Zero by 2045, with an 80% reduction between 2036-2039. We have the same ambition.

4. Current and Future Carbon Reduction Measures

A. Manufacturing Improvements

We will engage with our key mattress, cushion, and mobility product providers to:

Monitor and assess the transition to renewable energy sources of production by 2030. This will include regular comparisons of energy transition progress in-country (e.g., China vs alternatives), the impact on our emissions calculation methodology (See Schedule 1) over time, and its consistency with our 2030 and 2050 goals.
Through regular enquiry and benchmarking against alternatives and industry standards, assess the technological progress of our suppliers, particularly with reference to low-carbon manufacturing technologies and processes.
Continue designing our products in the UK in partnership with our current Chinese manufacturing partners (one key supplier for each of the mattresses and cushions). While maintaining the necessary performance and safety standards, we will explore opportunities to adopt alternative materials with lower associated emissions.

B. Transport Emissions Reductions

Short-term (by 2030): Forceget (www.forecget.com) is our logistics partner. They prioritise sustainability by using ‘console’ containers (consolidated containers), enabling the efficient consolidation of shipments by multiple shippers into one container. This reduces shipping costs and increases efficiency. Our standard written instructions to Forceget require the prioritisation of suppliers and freight partners committed to International Maritime Organization (IMO) decarbonisation goals, such as MSC (Mediterranean Shipping Company), CMA CGM Group, Hapag-Lloyd, Wallenius Wilhelmsen, and NYK Line. By working with these partners, we ensure a shift to cleaner fuels, including LNG and biofuels, for ocean freight.

Road transport is, comparatively speaking, a small part of our logistics supply chain. For logistics from the manufacturer to our third-party logistics (3PL) provider or Amazon warehouse, we rely on written instructions to Forceget to use sustainable transport options where possible. For road haulage, this includes using providers with a modern, fuel-efficient fleet. Over time, this will evolve to the use of biofuels and electric vehicles (EVs) as these options become commercially viable. In connection with delivery road transport, we rely upon the practices and low-emission policies of Amazon FBA, our fulfilment provider (see Section D below).

Long-term (by 2050):

We will engage with sustainably focused logistics providers to ensure our supply chain is among the first to:

Transition to zero-emission shipping technologies (e.g., green hydrogen or ammonia), and
Fully electrify road transport fleets in our countries of manufacture and within our storage and fulfilment locations in the UK and Europe.

C. End-of-Life Initiatives

By 2030: Recycling rates will increase by 30% through:

Improving the labelling of our products to encourage responsible disposal.
Introducing point-of-sale information to explain recycling options for both the foam and cover elements of our products as foam technologies develop.
Encouraging raw material developments and consumer behavioural change influenced by our packaging and design.

In addition, the amount of Caversham products going to landfills will be reduced by 25% by 2030, as energy-from-waste technologies advance and provide safe incineration options through further development by the UK's leading waste management companies.

By 2050: We are fully committed to ensuring all Caversham products are 100% recyclable by 2050. This includes implementing circular economy principles with redesigned products for full recyclability and closed-loop systems.

D. Warehousing and Storage Efficiency

Amazon is our principal third-party logistics and fulfilment partner (Amazon FBA). We place reliance upon Amazon’s initiatives for net-zero carbon fulfilment centres, including renewable energy usage and energy-efficient technologies. As a management team, we monitor Amazon’s commitment to industry-leading sustainability and energy efficiency practices and hold them accountable for the achievement of their published targets (a summary of Amazon’s sustainability report is in Schedule 2).

We are continuously balancing the need for sufficient inventory to be on hand with the goal of having the most efficient shipment quantities and minimising the volume of inventory being stored in UK FBA warehouses. Minimising storage time through improved inventory and demand forecasting will help reduce the emissions footprint of our Scope 3 warehousing activities.

5. Collaboration with Supply Chain Partners

As has been described above, we work closely with manufacturers, freight providers, and warehousing partners to ensure alignment with net-zero goals. Substantially, all of our emissions are Scope 3, across the four categories described in section 4. The emissions arising have been measured and are summarised in section 2, extracted from our comprehensive CHCER included in Schedule 1.
We will continue to hold our manufacturing, logistics and fulfillment partners to the highest standards. In addition, we will direct our design activities to ensure products evolve to embrace the latest materials, promoting efficient production, high recycling rates and low landfill end-of-life outcomes.
We will continue to encourage transparency and regular reporting of emissions data from all supply chain partners. Where we have the most direct control - with our manufacturing partners - we will perform regular enquiries and visits to monitor technological improvements and sourcing opportunities.
We see it as part of our role, through our consumer-facing activities and relationships with our environmentally progressive customers, to stay current and share best practices and innovations for reducing emissions across the supply chain.

6. Data Collection and Future Improvements

We have adopted the latest thinking and techniques in our measurement of emissions across our activities. Our methodology and detailed workings connected with our baseline emissions reporting in Section 2 above are set out and explained in Schedule 1. It is recognised that improvements will continue in the capture of data and in the benchmarks and indices used in our calculation methodology. LBL/Caversham is committed to continuous improvement in data accuracy and reporting for Scope 1, 2, and 3 emissions.
As demonstrated in our CHCER at Schedule 1, we have a comprehensive framework for monitoring and tracking emissions reductions annually. We will continue to incorporate digital tools, including generative AI, to obtain the latest data to analyse our emissions and optimise carbon reduction strategies across the lifecycles of our products.
We have made substantial progress in 2024/25 in establishing activity-level footprinting for our foam product categories as a whole. The commonality of raw materials and cover materials across our current range has meant that the margin for error in not having product-level emissions for the manufacturing ‘driver’ is low. We have measured the emissions from marine transportation and storage at a product level, as our calculations have taken account of the different volumetrics of our packaged products. However, one NHS England milestone we are actively working towards is reporting emissions on a per-unit basis for each product in our range, which will enable more granular and product-specific insights. We have made some progress on a category basis (we have Emissions Intensity results in the Baseline year for both Cushions and Mattress units), however, these are not produced on an SKU basis as yet. Once we are able to produce that level of detail, this will ensure full alignment with NHS England’s milestones for product-level footprinting and reporting by 2027/28.
Another example of a milestone we have yet to achieve is the development of a robust data validation process for emissions reported by our third-party manufacturing partners. By 2027/28, we aim to establish a standardised auditing framework to ensure the accuracy and consistency of emissions data provided by suppliers, particularly those in our two primary production facilities in China. This will allow us to refine our Scope 3 emissions further and provide even greater confidence in our reported data.

7. Declaration and Commitment

This Carbon Reduction Plan and the support Caversham Health Carbon Emissions Report included at Schedule 1 to this Plan have been developed in compliance with the NHS Supply Chain’s requirements. We recognise the importance of collaboration and transparency in achieving net-zero targets and will provide annual updates on progress toward our goals.

Ian Plunkett
Director
Live by Lulu Limited trading as Caversham Health
6 February 2025