Whilst the direct environmental impact of its operations is judged to be relatively low compared to many business sectors and to other retailers, Signet recognises that there may be opportunities to improve its performance. An environmental impact review confirmed that:

1. Jewellery has a very long life and very high recyclability. Recycling takes place in respect of trade-ins, obsolete inventory, used watch batteries and certain packaging.

2. Jewellery and watches have an extremely high value to weight ratio and value to volume ratio making transportation through the supply chain relatively low impact. The Group makes use of third party distributors and reusable containers for merchandise distribution.

3. The Group occupies relatively little space compared to other retailers of a similar market capitalisation and its sales density is above the jewellery sector average, and therefore the Group has a smaller physical impact on the environment.

4. Signet’s supply chain originates with the producers of the raw materials with whom the Group does not have a direct relationship but it is recognised that the extraction of minerals has an environmental impact that requires careful management by mining companies.

During 2003/04 Signet developed and tested data collection systems for its energy usage, greenhouse gas emissions and water usage in both the US and the UK. Signet strengthened its environmental management systems during 2004/05 by further developing its data collection process of key performance indicators for the purpose of validating the previous year’s results and then benchmarked the results against published data from UK competitors. The benchmarking process showed that when compared with its peers, the Group has a broadly similar impact in terms of energy usage, emission of greenhouse gases and water consumption.

For 2005/06 the Board has endorsed environmental performance targets for the UK and US divisions and approved the following environmental work programme:

• continue to collect baseline data for energy usage and greenhouse gas emissions, and validate existing data for water usage;
  
• undertake an energy audit in representative stores in the US;
  and
  
• undertake a review of the energy efficiency opportunities of the new model store designs in the UK.

Further, Signet will continue to work with Jewelers of America who are currently exploring ways in which the jewellery industry can use its influence to improve environmental performance related to mining of minerals, in particular of gold. The Group will also continue with the work commenced in 2004/05 to enhance consumer confidence and credibility of the product working together with industry constituents, through the initiatives described above.

The Environmental Principle and the Environmental Policy are set out below:

Environmental Principle
Signet seeks to ensure the efficiency of its business, including the environmental performance of its operations. This includes the use of energy, waste management, recycling and the choice of materials used in our products and locations. The Group’s Statement of Social, Ethical & Environmental Principles reflects our core values to which we expect those with whom we do business to adhere. Being an advocate for high social, ethical and environmental standards in the jewellery trade, we will also seek to use our influence with those with whom we do business to encourage efficient environmental performance.

Environmental Policy
Signet’s Environmental Policy is built on a risk-based assessment of the environmental impact of the Group. Whilst its activities are not judged to give rise to significant environmental impact, Signet aims to conduct its business in an environmentally responsible manner. As a minimum, Signet will comply with all relevant environmental legislation. Through the means of an appropriate environmental management system, environmental considerations are integrated into decision-making and relevant targets are set.

Signet recognises that environmental impacts are associated with its supply chain. While the supply chain is long and intricate, and thus beyond its direct control, Signet acknowledges its responsibility to raise the issue of environmental performance within it. We expect the Environment to be protected within the sphere of our suppliers’ influence. This includes undertaking initiatives to promote greater environmental responsibility along the entire jewellery supply chain and encouraging the development and diffusion of environmentally friendly technologies.

Organisational responsibility
The Signet Board’s policy is that relevant environmental management systems are in place in the operating divisions. Divisional management is accountable to the Board for ensuring compliance with local laws, defining roles and responsibilities as well as confirming that appropriate resources are provided.

Framework for management
Divisional management ensures that systems and relevant training are in place so that business decisions take due regard of environmental issues.

Through these systems Signet will endeavour to:

• Ensure compliance with legal requirements in the countries in which it operates


• Train employees on relevant environmental issues


• Monitor, review and report its environmental performance in accordance with local legislation


• Continually seek to improve its environmental performance through monitored targets.

Whilst the risk-based assessment of the environmental impact of the Group resulted in the direct environmental impact being considered to be relatively low compared to many sectors and others in the retail sector, Signet recognises that there may be opportunities to improve its performance. The relative environmental impact is considered to be low based on a number of factors which included jewellery having a very long life and very high recyclability; the Group’s ratio of sales to square feet of occupied space in stores or warehouse accommodation being very high compared to that of other retailers and above the jewellery sector average; and jewellery and watches having an extremely high value to weight ratio and value to volume ratio making transportation through the supply chain relatively low impact. Signet’s supply chain ultimately stretches back to the producers of the raw materials with whom the Group does not have a direct relationship but it is recognised that the extraction of minerals has an environmental impact that requires careful management. The Group believes that the best approach in this area is on an industry wide basis.

Procedures that help to minimise Signet’s direct environmental impact include the use of third party distributors to improve the efficiency of distribution from the Group’s central warehouses in the UK and US to its stores; the utilisation of reusable containers for transferring merchandise to and from the warehouses and the stores; and the recycling of merchandise that is traded-in, obsolete inventory and used watch batteries.

UPDATED NOVEMBER 2004