34

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

SUSTAINABILITYSUSTAINABILITY: ENVIRONMENT

Sustainability is central to Oxford Instruments, with
our purpose, values, strategy and products all aligningaround the positive impact we seek to haveon our planet and the societies in which we operate

We are proud of the role our products play in supporting
decarbonisation, and we are committed to continuing
to minimise our own environmental footprint

Through our products and services,
we are working to accelerate thebreakthroughs that create a brighter
future for our world. And through ourcommitment to operating responsibly,
in line with our values, we strive tooperate with the highest standards
and integrity.
We take a holistic approach tosustainability, ensuring that it
is embedded throughout theorganisation, from our Board-level
Sustainability Committee, joined by
all Board members, to our workforce
around the world. We also seek toembed principles of sustainability in
our interactions with all stakeholders,
including customers, supply chain
partners and our local communities.
We are committed to building on
past progress and continuing tochallenge ourselves to go further. Our
environmental, social and governance(ESG) strategy focuses on driving
positive action across the following
areas: progress to net zero andenvironmental impact; sustainableproduct stewardship; health andsafety; investing in our people; culture
and engagement, ethical businesspractices and regulatory financial
compliance. We set out our progress
throughout this section.

Environment
For more information /Pages 35 to 39

SocialFor more information /Pages 51 to 55

GovernanceFor more information /Pages 56 and 57

www.oxinst.com

The United Nations Sustainable Development Goals provide an ambitious andpowerful framework for companies and other organisations to focus their efforts
and commitments. We fully support all 17 goals, but have focused our efforts
around those goals where we feel most able to have a positive impact.

Our products contribute toward the following goals:

The way we run our business and the actions we take throughout
our value chain support the following goals:

Introduction
We are committed to advancing ourpositive progress on sustainability
each year. This year we have set a
new level of ambition, accelerating
our emissions reduction targets toreach net zero in Scopes 1 and 2 by2030. We have also strengthened
and re-baselined our data acrossScopes 1, 2 and 3, providing a robust
foundation from which to address our
newly strengthened net zero targets.
Our next steps include setting out thedetail of our net zero roadmap anddeveloping interim Scope 3 targets.
Once complete, we will submit ouroverall carbon reduction targets to
the Science Based Targets initiative(SBTi) to be validated. See opposite
for more detail.
We were pleased to report a strong
health and safety performance, withno serious accidents in the year,
and a continued reduction in minor
injuries. We have strengthened ourreporting framework to support
continuing reductions. Notablehighlights of our social programme
have included:•

the development and launchof our equity, diversity andinclusion policy;•

the publication of our first ethnicity
pay gap reporting in the UK; and•the launch of new employee
impact groups focused onneurodiversity and women’s issues.

Our colleagues have completed
almost 14,000 training courses
and we have launched a new
Foundations programme to support
high-potential colleagues in theirearly career. We continue to extend
both the number of participants andthe range of opportunities offeredin our apprenticeship and graduate
programmes. On Governance, wehave continued to embed responsible
practices throughout our global
operations and supply chain, driving
employee awareness through training
and regular communications. For
more on our people and governancecentred initiatives, see pages 51 to 57.
Remuneration structures are a key
tool to drive sustainability-focused
behaviours and positive impacts.
This year, we have introduced newsustainability-related performancemeasures for Executive Directors.
For further information, see the
Directors’ Remuneration Reporton pages 120 to 143.

Strategy and targets
As a Group we have been proactively
reducing our own environmental
footprint over many years. We
embarked on our environmental
journey in the early 2000s, with thecreation of our first employee-led Go
Green teams; since then, we havedramatically reduced our carbon
footprint, leaving only a relatively small
footprint in our own operations.
In FY22/23 we set near-term targets of a
50% reduction in Scope 1 emissions anda 70% reduction in Scope 2 emissions,both calculated versus our FY18/19
baseline year, and set to be achievedby 2030. As the understanding of ouremissions has evolved, we have taken
the decision to redefine our baseline
year as FY22/23. The data for this year
is more mature and robust than inprevious years, putting us on a stronger
position to enact positive change in themost relevant areas of the business.

As set out opposite, following
this rebaselining, the Board andManagement Board have made thedecision to accelerate our near-termemissions reduction targets. We
have now set the target to reach net
zero (where we add no incremental
greenhouse gases to the atmosphere)
across our own operations (Scopes
1 and 2) by 2030. In addition tothese targets, we remain committed
to delivering net zero emissions
across Scopes 1, 2 and 3 by 2045,
putting us five years ahead of the UK
Government’s commitment.
With the work undertaken to reassess
our baseline year, we took the decision
to delay setting near-term 2030 targets
for our Scope 3 emissions. Work has
been progressing to refine and improve
our data collection techniques andnear-term targets will be set in FY24/25.
We intend that all our targets will alignwith, or exceed, the SBTi framework.

Once set, the near- and long-termtargets will be sent for validation to
SBTi. Through this process we havebeen incorporating sustainability
considerations into our new productdevelopment stage gate process, toensure the ongoing reduction of our
products’ carbon footprint throughenergy use, packaging and distribution,
as well as increased recyclability
and upgradability.
Today, our market-based carbon
intensity metric for Scopes 1 and 2
stands at 5.92 tonnes CO2e per £million
revenue. This is an increase from 2.96
tonnes per £million revenue in FY22/23,
primarily caused by temporarily losing
access to REGO-certified renewableelectricity, as described later inthis section.

CASE STUDY

Go Green Teams
Go Green is a long-standing employee-led initiative,
set up originally at our four UK manufacturing
sites to help promote environmental sustainability.
The scheme has been extended this year to cover
all our major sites internationally with the goal of
improving environmental performance and helping
the Group to hit its accelerated net zero targets. A
total of 14 highly engaged teams have now been
set up, covering 24 sites. As well as delivering
self-guided projects, teams have been given aworkbook of suggested projects to work through,covering topics such as energy, waste, water andtravel. Along with helping to identify larger site
infrastructure projects, Go Green teams are driving
behaviour change projects, helping to educatecolleagues Group-wide to make environmentallyconscious decisions.

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

SUSTAINABILITY: ENVIRONMENT continued

GHG emissions (tCO2e)2024

Our roadmap to net zero
We have been making significant
progress towards achieving net zeroacross our operations. This has beenstrengthened this year by announcing
our accelerated target to be net zeroin our own operations, that is Scope 1
and 2, by 2030. This ambitious target
will help us to drive positive change
within the business over the coming
years. In addition to this work, we will
also be working to reduce our Scope
3 emissions to ensure we hit our 2045
net zero target across all Scope 1, 2
and 3 emissions. The steps we will takebetween now and 2045 include:
•

•

•

•

•

developing a transition plan during
FY24/25 to map our pathway to
net zero;ensuring that all of our sales,
service and manufacturing
operations, wherever possible, arepowered by electricity backed byrenewable energy certificates, e.g.
Renewable Energy Guarantee ofOrigin (REGO) scheme in the UK.
Where this is not achievable we will
look to move from current sites asleases come up for renewal;
prioritising positive environmental
attributes when we are looking
for new sales, services or
manufacturing facilities;
looking for opportunities to reduceenergy usage at each of our sites.
We will continue to use and invest inenergy-efficient equipment to help
reduce the quantity of energy wepurchase;
early replacement of gas and oil
boilers (with the Board setting atarget to replace boilers at two UK
sites in the next three years (seepage 143));•

switching fleet vehicles to electricrather than internal combustion
engines; and•engaging with our supply
chain to understand theirdecarbonisation strategy.

Streamlined Energy andCarbon Reporting (SECR)
We have outlined our emissions andenergy usage across the whole Group,
accounting for all Oxford Instrumentsites. Absolute location-based Scope
1 and 2 emissions increased by 11.6%
as a result of a full year reporting at
our new Severn Beach site, in addition
to increased electricity usage atsome of our sites across Asia. Scope 1
emissions have reduced by 35% due toreduced company car and fleet usage.
Scope 2 market-based emissions haveincreased significantly due to supply
issues with our renewable energy
certificates at the majority of UK sites
this year. Our previous electricity
supplier is exiting the industrial sector,
and as it pulled back from the market,
it dropped certain services, such asproviding REGO-certified electricity. In
response, we negotiated an early exit
to our contract and have contractedwith a new supplier that can provide
REGO-certified electricity long term.
Due to the time taken to negotiate andset up these new contracts, six monthsof electricity was supplied to some UK
sites that was not REGO backed. The
target to have 100% of UK sites using
renewable electricity by April 2024 has
now been met.

37

Financial Statements

Progress has been made on moving
global sites to use renewableelectricity. The new office in Tokyo
consolidated two sites and added
solar power, water-conservation andenergy-saving measures, as well as
having been constructed in part fromrecycled materials. The new site isa 4-star certified DBJ (Development
Bank of Japan) green building. We
also have an ongoing programme toimprove energy efficiency at existingsites. Actions taken during the year
have included continuing to replace
fluorescent lighting with LED lighting,and optimising heating, ventilation andair-conditioning systems to make themmore energy efficient.
In the near term, we will continue
to purchase renewable energy
certificates to reduce our marketbased Scope 2 emissions. In thelonger term we will explore further
development of onsite generationand power purchase agreements(PPAs) and pursue energy efficiency
opportunities.
We report our emissions and energy
intensity as tonnes CO2e/£m revenue
and kWh/£m revenue. Emissions
intensity has increased 5.5% thisyear, while energy intensity has
increased 3.6%.

Scope 1 fugitive emissions (tCO2e)
Scope 1 combustion emissions (tCO2e)
Total scope 1 (tCO2e)
Scope 2 location-based (tCO2e)

2023

UK

Global(exc. UK)

Group
total

UK

Global(exc. UK)

Group
total

1

1

2

–

49

49

372

51

423

571

41

612

373

52

425

571

89

660

2,315

803

3,118

1,874

641

2,515

Scope 2 market-based (tCO2e)

1,715

647

2,362

–

656

656

Total Scope 1 + 2 location-based (tCO2e)

2,688

855

3,543

2,445

730

3,175

Total Scope 1 + 2 market-based (tCO2e)

2,088

699

2,786

571

745

1,316

Upstream Scope 3 (tCO2e)––64,857––59,199Downstream Scope 3 (tCO2e)––

31,371––

29,853

Total Scope 3 (tCO2e)––96,228––89,052

Total Scope 1, 2 & 3 location-based (tCO2e)––

99,771––

92,227

Total Scope 1, 2 & 3 market-based (tCO2e)––

99,014––90,368

Scope 1 + 2 location based GHG emissions
intensity ratio (per Group turnover) £m

–

–

7.53

–

–

7.14

Total renewable fuels consumption (kWh)

0

0

0

0

0

0

Liquid fuel (diesel, petrol, fuel oil)

662,253

12,706674,959

1,388,935–

1,388,935

Gaseous fuel (natural gas)

1,091,919

261,036

1,352,955

1,240,159

223,210

1,463,369

Total non-renewable fuels consumption (kWh)1,754,172

273,7422,027,914

2,629,094

223,210 2,852,304

Total fuels consumption (kWh)1,754,172

273,7422,027,914

2,629,094

223,210 2,852,304

Consumption of purchased or acquired
electricity renewable (kWh)6,485,154

395,2026,880,356

9,689,500

64,317

9,753,817

Consumption of purchased or acquired
electricity non-renewable (kWh)4,695,603

1,893,110

6,588,713–

1,843,949

1,843,949

Consumption of self-generated non-fuelrenewable energy (solar) (kWh)–255,139

255,139–––

9,689,500 1,908,266

11,597,766

Energy consumption (kWh)Total electricity consumption (kWh)11,180,757

2,543,450 13,724,207

Consumption of purchased or acquired heating,steam and cooling non-renewable (kWh)–252,243

252,243–

153,520

153,520

Consumption of purchased or acquired heating,steam and cooling renewable (kWh)–64,96764,967–

66,852

66,852

6,485,154

715,3077,200,461

9,689,500

Total non-renewable energy consumption (kWh)6,449,775

2,419,094

8,868,869

2,629,094

2,220,679

4,849,773

Total energy consumption (kWh)12,934,929 3,134,402 16,069,330

12,318,594

2,351,848

14,670,442

Total renewable energy consumption (kWh)131,169 9,820,669% renewable electricity from total electricity

58%

16%

50%

100%

3%

84%

Energy Intensity ratio (per Group turnover) £m––

34,161––

32,9901.	This section has been prepared for the reporting period of 1 April 2023 to 31 March 2024. We report on all of the material emission sources inline with an operational control approach method, as required in Part 7 under the Companies Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013 and under the UK’s Streamlined Energy and Carbon Reporting (SECR) requirements.
	Our energy consumption and emissions data is reported in accordance with the reporting requirements of the Greenhouse Gas Protocol (‘GHG
Protocol’), Revised Edition and the Environmental Reporting Guidelines, including the SECR guidance dated March 2019. The GHG Protocol
standard covers the accounting and reporting of seven greenhouse gases (GHGs) covered by the Kyoto Protocol.
	We report on Scopes 1 and 2 GHG emissions, as well as select Scope 3 emissions, providing a detailed breakdown of the Group’s emissions by typeand intensity measurement.
	In our calculations, we have taken into account instances where sites generate their own renewable electricity or purchase electricity backed
by contractual instruments, such as Renewable Energy Guarantee Origin (REGO). Consistent with the Greenhouse Gas Protocol, we regularly
review our reporting procedures in response to changes in business structure, calculation methodologies, and data accuracy and availability.
Consequently, we have restated our Scope 1 and 2 2023 emissions data to reflect updated emissions factors and data availability.
	For Scope 1 emissions, we have utilised emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2023
(provided by the Department for Environment, Food and Rural Affairs (DEFRA)). Scope 2 emissions, calculated using the GHG Protocol locationbased method, have been determined using country-specific emission factors from the International Energy Agency (IEA) and DEFRA for UK sites.
For Scope 2 emissions calculated using the GHG Protocol market-based method, we have used residual mix emission factors from the Associationof Issuing Bodies (AIB) 2022 where applicable. In cases where residual mix emission factors were not available, we employed country-specificemission factors from the International Energy Agency (IEA) in accordance with GHG Protocol guidelines.

www.oxinst.com

38

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

SUSTAINABILITY: ENVIRONMENT continued
Scope 3 emissions
During the year we re-calculated
our Scope 3 emissions using datafrom FY22/23 and then updated ourfootprint for this year. Our evaluation
confirmed that our value chain
emissions are significantly greater thanour operational carbon footprint, with
our Scope 3 emissions accounting for
97.2% of our total emissions.
We calculated all applicable Scope
3 categories for our carbon footprint,
with five categories not applicableto our business. In line with theGreenhouse Gas Protocol, we continue
to review our reporting in light ofany changes in business structure,
calculation methodology and theaccuracy or availability of data.

Due to recognised inherent
uncertainties in calculating Scope3, we have adopted a continuous
improvement approach. We willcontinue to review our processes anddisclose any restatements in a timely
and transparent manner. Below is a
description of our most material scope
3 categories for our 2023/24 Scope 3
base year footprint.
Purchased goods and services (57.2%
of Scope 3) – We use purchase data by
spend of raw materials, components
and services. As this was our firstevaluation of our purchased goods
and services we have used a ‘spendbased’ approach which allocatesemissions to an amount spent on
specific commodities. While thismethod contains a certain degree of
uncertainty, it provides a view of our
hotspots in our supply chain emissions.

As more granular data becomes
available we will refine thismethodology and look to incorporate
supplier-specific emissions.

Environmental legislation

Use of sold products (32.3% of Scope3) – We calculate the lifetime energy
use for representative products of our
key product ranges, using our annual
sales volume, average power use per
product and estimated hours in use
over life. Emissions factors for our key
sales regions are applied to this data.

Water and waste

Upstream transportation anddistribution (3.3% of Scope 3) – Allinbound, intragroup and outboundlogistics paid for by the Group are
mapped against the transportationmode, weight and distance travelled
to calculate emissions on a well-towheel basis.

As a Group, we are committed to ensuring compliance with all environmental legislation in the countries where we operate.
No environmental fines or penalties have been placed on the Group in the last three years.

Water withdrawal and waste data has been collected across the Group from sites with independent water supplies anddirect control of their waste collection services. This includes all the primary UK manufacturing sites, which account for 83% ofGroup revenue.
Some of our operations are in regions with high or extremely high levels of water stress. However, water is not seen as amaterial risk due to the low volume we consume. In total the Group recorded 10,553 m3 of water withdrawal.
UK sites are sending zero waste to landfill; our waste from these sites is either recycled or used to generate electricity atenergy from waste facilities. We are committed to reducing the quantity of hazardous waste we produce.
Total waste – treatment

Recycled

Category Description

Status55,02950,505––

1

Purchased goods and services

Relevant, calculated2

Capital goods

Relevant, included in category 1

3

Fuel- & energy-related activities

Relevant, calculated

395

296

4

Upstream transportation and distribution

Relevant, calculated

3,150

4,327

5

Waste generated in operations

Relevant, calculated

13

11

6

Business travel

Relevant, calculated

4,825

2,704

7

Employee commuting

Relevant, calculated

1,445

1,353

8

Upstream leased assets

Not relevant, not applicable––

64,85759,199

326

314

–

–

Upstream emissions
9

Downstream transportation and distribution

Relevant, calculated

10

Processing of sold products

Not relevant, not applicable11

Use of sold products

Relevant, calculated

31,03429,52912End-of-life treatment of sold products

Relevant, calculated

11

11

13

Downstream leased assets

Not relevant, not applicable

–

–

14

Franchises

Not relevant, not applicable

–

–

15

Investments

Not relevant, not applicable––

Downstream emissions

31,371

29,853

Total Scope 3

96,22889,052

38.9%

12,656

5.9%

117,743

55.2%

Total

213,302kg% split of waste

615

0.3%

Non-hazardous

212,687

99.7%

Total

213,302

Our Tubney manufacturing site and head office is set in acres of woodlandwww.oxinst.com

82,903

Energy from waste

Hazardous
FY22/23 Scope 3
emissions (tCO2e)% split of waste

Landfill

Hazardous vs non-hazardous

FY23/24 Scope 3
emissions (tCO2e)

kg

39

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT

Task Force on Climate-related Financial Disclosures (TCFD)
Statement for the year ended 31 March 2024
Introduction
In tandem with our net zerocommitment, this report addresses
our climate governance and describes
how we integrate climate risks andopportunities into our risk management,
strategic planning, and decisionmaking, in line with our ambition toachieve net zero emissions acrossScopes 1 and 2 by 2030, and acrossScopes 1, 2 and 3 by 2045.
As a global manufacturer of hightechnology products, mitigating,
adapting and responding to theimpacts of climate change is central to
our strategy, both in terms of how we
operate our business, and in terms of
the key role our products and services

play in the technology pathway toenable the transition from fossil fuels toa low-carbon economy. This year wehave updated our climate-related risk
and opportunity assessment, taking
into account their impact under various
timeframes and scenarios to gain adeeper understanding.

Compliance statement
For clarity around compliance of thefollowing information with the TCFD
framework, and requirements arisingfrom Listing Rule 9.8.6R(8), we consider
our disclosure to be consistent withall TCFD recommendations andrecommended disclosures as detailedin ‘Recommendations of the Task
Force on Climate-related Financial

Disclosures’ (2017) and the additional
guidance as set out in the 2021 Annex,‘Implementing the Recommendationsof the Task Force on Climate-related
Financial Disclosures’ and with theclimate-related financial disclosure
requirements under the Companies(Strategic Report) (Climate-related
Financial Disclosure) Regulations
2022, as shown in the TCFD crossreference and disclosure consistency
summary below.

TCFD pillar

Recommended disclosure

Disclosure location

Governance: Disclose theorganisation’s governancearound climate-relatedrisks and opportunitiesa.	Describe the Board’s oversight of climate-related risks
and opportunities.

Pages 41 and 42b.	Describe management’s role in assessing and managing climaterelated risks and opportunities.

Pages 41 and 42

Strategy: Disclose theactual and potential
impacts of climate-relatedrisks and opportunities
on the organisation’s
businesses, strategy, andfinancial planning wheresuch information is materiala.	Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.

Pages 44 to 49b.	Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.

Page 50c.	Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario.

Page 50

Risk management:
Disclose how theorganisation identifies,
assesses, and manages
climate-related risksa.	Describe the organisation’s processes for identifying and assessing
climate-related risks.

Pages 42 and 43b.	Describe the organisation’s processes for managing climate-relatedrisks.

Page 43c.	Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overallrisk management.

Page 43a.	Disclose the metrics used by the organisation to assess climaterelated risks and opportunities in line with its strategy and risk
management process.

Page 50b.	Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhousegas (GHG) emissions, and the related risks.

Pages 35 to 39c.	Describe the targets used by the organisation to manage climaterelated risks and opportunities and performance against targets.

Pages 35 to 39, 50

Metrics and targets:
Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks andopportunities where suchinformation is materialwww.oxinst.com

Governance
Board level
The Board of Directors has ultimate
responsibility for the oversight ofclimate change-related issues andis supported by its Committees(primarily the Sustainability Committee,
the Audit and Risk Committee andthe Remuneration Committee), theManagement Board, the Sustainability
Leadership Forum, and the wider
senior leadership team. Climatechange-related considerations areembedded throughout our governancestructure, and at every level acrossthe organisation, as set out in thegraphic and explained in moredetail below. The Board engages
regularly with a range of external
advisers and internal subject matter
experts on environmental legislation,
decarbonisation and climate risk.

The Group’s environmental strategy
and the management of climaterelated risks and opportunities is
set and directed by the CEO andManagement Board. Any major capital
expenditure, including climate-related
initiatives such as solar arrays orenergy efficiency upgrades to sites, isapproved by the CEO and CFO and, if
required, the Board.

The Audit and Risk Committee provides
oversight and governance in relation
to climate change-related risks andopportunities, while the Remuneration
Committee is responsible for setting
and overseeing climate changerelated remuneration incentives,
together with any other sustainabilityrelated incentives. The current climaterelated executive remuneration
objectives can be found on pages 142
and 143. The Sustainability Committee
in turn provides strategic guidance
and oversight to the managementlevel Sustainability Leadership Forum(SLF) primarily through the attendanceof relevant SLF members at theCommittee’s meetings.

The Board, through its Sustainability
Committee (comprising all the NonExecutive Directors), provides oversightand governance over environmental
strategy, including monitoring progressto net zero targets through its review
of emissions data, and assessing
how these are being managed. The
Sustainability Committee meets atleast three times a year.

Climate-related governance framework
Oxford Instruments plc Board

Audit and Risk
Committee

Remuneration
Committee

Board Sustainability
Committee

Sustainability Leadership Forum
Management
Board

Business unit andregional leaders

Managementof climate
risks andopportunities

Energyuse andreportingTarget setting Productand progress design
towards net
zero

Supplychain

Go Green teams

Note to graphic: Arrows indicate two-way transfers of information and guidance between forums.

Waste
management

Communications
and engagement

41

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Management level
The SLF is a cross-functional forum,
chaired by the Chief HR Officer, witha remit across the full spectrum ofsustainability, including environment,social and governance. It holds
responsibility for environmental
issues at a management level,
including climate-related risks andopportunities and the delivery of
the Group’s environmental strategy.
Representatives of the SLF attend
Sustainability Committee as required toshare strategic updates, and seek theBoard’s input on them. The SLF meetsat least quarterly, and is primarily
responsible for detailed developmentof strategy, together with theassessment, management and tacticaldelivery of the environmental remit.

Its membership includes functional
heads and subject matter experts,
who lead workstreams on:
•


the
management of climate risks
and opportunities;•

energy use and reporting;•development of target setting
and progress towards net zero;•product design;•

supply chain;•

waste management andrecycling; and•communications and engagement.

A key part of the SLF’s remit, working
in collaboration with the Management
Board, is to foster two-way engagementwith business units, regional leadershipand Go Green teams to drive andaccelerate Oxford Instruments’ progress
towards net zero and our managementof climate risks and opportunities. This
year our Go Green initiative (see page35) has expanded to 14 global sites tohelp Oxford Instruments drive progress
towards its 2030 net zero target for
Scopes 1 and 2, and its 2045 overall net
zero target through projects relating toenergy, waste, water and travel.

SLF members lead liaison withexternal consultant CEN-ESG on
climate, energy and progress to net
zero. In addition, members monitor the
KPIs outlined in the Metrics and Target
section on page 50.

Through this assessment, risks are
assigned a Risk Score and classified
as either Low, Moderate, High or
Significant. Risks that are classified as
High or above are reported to the Groupfor further assessment. This process
allows prioritisation of risks and ensuresthat the significance and scope ofclimate-related risks are considered inrelation to non-climate-related risks.

The decision to tolerate, transfer
or treat a risk is determined by theoutcome of the Risk Score; higher
scoring risks need to be managed
to bring the risk impact back in linewith the Group’s appropriate risk
appetite. Action plans for each risk areoutlined in the risk register including
mitigating actions and who is
responsible for these actions.

Climate-related risks scored as Highor above are reflected in the Grouprisk register which is reported to
the Audit and Risk Committee on
a quarterly basis. Risks below thisthreshold are still monitored andconsidered for future review.

Additional information regarding
each risk and opportunity has been
elaborated upon, including anassessment of their implications,
including but not limited to financial
and reputational implications, strategic
responses, associated costs, andthe variability within climate-related
scenarios, where feasible.

Risk Management

Strategy

Our process for identifying and assessing climate-related risks.

Climate-related risks
and opportunities

As a principal risk, climate-relatedrisks and opportunities are identified
and assessed in line with Oxford
Instruments’ processes for wider
enterprise risk management. This
allows the importance of climaterelated risks and opportunities tobe compared with other risks andopportunities. All physical andtransition risk categories (current
and emerging) outlined by the
TCFD are considered by Oxford
Instruments, regardless of whether
they occur within our operations,
upstream or downstream of theGroup. Our approach to identifying
and assessing risks and opportunities
is set out in detail in the Risk
Management section on pages 70
to 78 of the Annual Report 2024.

Relevant risks and opportunities
are identified with help fromexternal consultants, CEN-ESG,
and involve collaboration with key
internal stakeholders such as senior
management, legal and regulatory,
product management and healthand safety functions. As part ofthis process, we carry out horizon
scanning to identify potential threats,
particularly regulatory changes, andany emerging risks and opportunities,
which allows for better preparedness
to support decision making. We
consider climate-related risks andopportunities across the short,medium and long term, with thesetimeframes defined on page 43.

Generally, transition risks are considered
at a macro level by the Group incollaboration with internal stakeholders
and senior management, while physicalrisks are typically more granular andtherefore more relevant at a business
unit and site level. Any new regulatory
requirements are implemented asthey arise, and further actions taken
as appropriate. During the year we
carried out a site-level physical climate
risk assessment using Munich Re’s
Location Risk Intelligence tool, which
provides a geospatial natural hazard risk
assessment and evaluation, to improve
our operational risk assessment.
As with all other Group risks, climate
risks and opportunities are assessedon a 4x5 matrix, which incorporates anassessment of both Likelihood (Highly
Unlikely to Highly Likely) and Impact(Insignificant to Severe1). The financial
impact of a risk is defined below.

Our approach to managing climaterelated risks and leveraging
opportunities is incorporated into
our business strategy. This year
we have performed a new climate
scenario assessment of climaterelated risks and opportunities.
Two separate climate risk
assessments have been carriedout to reflect the contrast between
transitional and physical climate risks.

Impact time horizon

Financial Impact2
Insignificant

NotableSignificant

Major

SevereFinancial impact ofFinancial impact ofFinancial impact ofFinancial impact ofFinancial impact of

250k

250k–£1m£1m–£2m£2m–£5m> £5m

www.oxinst.com

Transition risks
and opportunities
The TCFD defines transition risks infour categories (Policy and Legal,
Market, Technology, and Reputation)and transition opportunities in fivecategories (Resource Efficiency, Energy
Source, Products & Services, Markets
and Resilience). These categories wereconsidered as part of the transition risk
assessment. Risks and opportunities
identified in these categories wereranked, with only the most significant
being reported below. Short, medium
and long-term time horizons defined
below were used as part of thisassessment to identify the impact ofclimate on our business strategy.

Year fromYear toRationale

Short term

2024

2027

In line with the existing risk management time horizon and specificbusiness plan strategy.

Medium term

2027

2035

Encompasses Oxford Instruments’ near-term emission targets.

Long term

2035

2050

Encompasses the Group’s net zero by 2045 target, the UK Government’s
net zero by 2050 target and the useful life of the organisation’s assets.

The following International Energy Agency climate scenarios have been used to perform scenario analysis on our transition
risks and opportunities.
•

Net Zero 2050 (NZE): a narrow but achievable pathway for the global energy sector to achieve net zero CO2 emissions by
2050. This scenario meets the requirement for a ‘below 2°C’ scenario and is used as a positive climate pathway. NZE also
informs the decarbonisation pathways used by the Science Based Targets initiative (SBTi).

•

Stated Policies Scenario (STEPS): representing projections based on the current policy landscape and is used as a basecase pathway. Global temperatures rise by around 2.5°C by 2100 from pre-industrial levels, with a 50% probability.

1.	Likelihood is a measure of the risk occurrence while impact is a measure of the combination of financial, reputational and compliance impacts.
Impact is a combination of financial, reputational and compliance impact.
2.	Materiality limits are set in line with the Group’s financial statement materiality levels. Last year Group financial materiality was £3.68m based on
5% of profit before tax.

Both these risk assessments
involved a Group-wide review ofoperations and value chain to gain
an understanding of how climate can
impact our revenue, assets and otheraspects of our company. An external
consultant, CEN-ESG, was engaged
to facilitate engagement with key
stakeholders within the Group such as
procurement, product development
and senior management in tandemwith horizon scanning of externalindustry risks and a desktop review ofother climate initiatives.

This detailed analysis, coupled withevaluations of impact and likelihood,facilitates the determination of
appropriate risk responses, such as
mitigation, acceptance, or control.
Consequently, resources can beallocated effectively to address themost consequential climate-related
impacts, while other risks necessitate
additional scrutiny or are deemed
acceptable within the Group’s
customary risk tolerance.

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Oxford Instruments plc
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Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Significant risk/opportunity
Report to Group

Transition risks and opportunities

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Transition risks identified
Risk

Current andemerging
environmental
regulationand increasing
reportingrequirements

Price inflationin the value
chain

Increasing
stakeholder,
regulatory
and reporting
expectations

Potential impact
on the businessResponse/actions we are taking
and how they are managed

Rise in material prices forswitching to compliant
products or disruption
to production if unable
to react in sufficienttime. Could also
result in component/
process obsolescence.

We have product compliance processes
in place to manage the regulatoryenvironment. We use existing processes
to meet Restriction of Hazardous
Substance (RoHS) and Registration,
Evaluation, Authorisation and Restrictionof Chemicals (REACH) requirements,
which remain appropriate to manage
future changes in standards. Further,
our new product development process
considers environmental regulation.

Penalties for noncompliance withregulation. Further,cost of compliancecould increase
through being late toaddress regulation.

Oxford Instruments has dedicatedinternal risk, legal and environmental
management resource, as well as
investing in external consultancy, toensure that we are aware of, andremain compliant with, legislation.
Further, we implement any new
regulatory requirements as they arise.
Our certified ISO 14001 systems at ourfour UK manufacturing sites support our
mitigation of climate risk.

Potential of higher
supply chain costs
through increased
raw material prices.

Our target is to achieve net zero
emissions by 2045. We are in the processof assessing our Scope 3 emissions –including supply chain. This will be an
essential input into the development of
our net zero target, transition plan andability to identify key levers to reduce
supply chain emissions. We are also
engaging with our key suppliers on theircarbon footprint to identify our carbon
hotspots and mechanisms to reduce this.

Global supply chainsare implementing more
expensive production
methods and changing
raw materials to facilitate
Marketdecarbonisation, although
the extent to which increased
costs will be passed on islargely unknown.

Potential of higher
supply chain costs.

Oxford Instruments maintains close
relationships with key suppliers. ProductDevelopment and Strategic Sourcing
teams identify and evaluate viable
alternatives in materials and processes
and work closely with key suppliers todeliver supply chain solutions.

Key stakeholders aredemanding sustainability
performance from
Oxford Instruments.

Reputational damage
that could result inloss of customers
and shareholders
and reduced accessto capital.

Board-level scrutiny and oversight, andan organisation-wide focus on addressing
the risks and opportunities arising fromclimate change, together with a focus on
impact reporting, wider communications
and stakeholder engagement. Plans todevelop a transition plan will also reduce
exposure to this risk.

Risk description

Increased exposure toenvironmental regulation– such as regulation
on Perfluoroalkyl
and Polyfluoroalkyl
Substances (PFAS).

The global regulatory
landscape for ESG issues
is changing rapidly. Failure
to keep up with emerging
regulation could increase
costs of compliance.

Value chain exposure tocarbon pricing impacts.
Globally, there is anincrease in carbon pricing
mechanisms – both policy
and market instruments –for example Carbon Border
Adjustment Mechanism(CBAM) within the UK and
the EU. Our suppliers may be
exposed to carbon pricing
within their own operations.

Risk type

Policy and legal

Policy and legal

Policy and legal

Reputation*	Materiality limits are set in line with the Group’s financial statement materiality levels. Last year Group financial materiality was £3.68m based on
5% of profit before tax.

www.oxinst.com

NZE scenario
KPIs

2027

2035

STEPS scenario
2050

2027

2035

2050

Scenario Implications

Frequency of horizon
scanning for new
regulation

The pace and magnitude ofregulation would increase more
substantially under NZE – but
no foreseen long-term change
in risk exposure between
NZE and STEPS given our
mitigation processes.

•

Percentage of sites
with ISO 14001
certification

The pace and magnitude ofregulation would increase more
substantially under NZE – but
no foreseen long-term change
in risk exposure between
NZE and STEPS given our
mitigation processes.

•

Scope 3 – category
1, 4 emissions
Global carbon prices

•

•

•

•

•

Net risk= zero;companyplans to be
net zero by2045

Net risk= zero;companyplans to be
net zero by2045

Exposure is likely to be greater
under NZE due to the higher
cost of carbon and increased
global implementation ofcarbon pricing mechanisms.

Percentage of supply
chain spend withdecarbonisation
dialogue
Percentage ofsuppliers engaged tocollect emissions data

Change is more rapid under NZE
compared with STEPS. Pricing
implications under NZE are also
more significant.

Rating agency scores

Higher expectations ofstakeholders in short to medium
term under NZE. Oxford
Instruments’ emissions targets
will even out risk exposure underboth scenarios in the medium tolong term.

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Oxford Instruments plc
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Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Significant risk/opportunity
Report to Group

Transition risks and opportunities continued

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Transition opportunities identified
Opportunity

Opportunity description

Opportunity
type

The transition to a low-carbon
economy requires significant
investment in R&D for moresustainable technologies. Innovation Products
and development in technology
and services
areas such as batteries are
critical for the transition to a lowcarbon economy.

Investment
in R&D for a
low-carbon
economyServices thatfacilitate thereductionof carbon
emissions anddeliver value
for customers

Operationalenergy andcarbonreductions

Resource
efficiency

www.oxinst.com

In-house R&D and our new productdevelopment process has thepotential to address the needfor products with sustainability
credentials, e.g. energyefficient products.

Products
and services

Proactive collaboration with
suppliers to drive low-carbon
innovation helps improve thesustainability credentials of
our product portfolio.

Products
and services

Remote Services Solutions is a
developing service across theGroup. This service area not only
Products
provides an area for growth but also
and services
allows for reduction of emissions
in our own operations and forour customers.
Local sourcing and strategic
placement of services delivers
efficiency to customers and allows
Oxford Instruments to reduce
logistics travel.

Obtaining renewable electricity
through renewable electricity
certificates (RECs) and powerpurchase agreements (PPAs)
reduces reliance on local grid andhelps to reduce Scope 2 emissions
as an interim measure whilst
exploring opportunities to reduceenergy usage.

Internally Oxford Instruments canimplement resource efficiency
programmes to improve waste,water use and energy savings.

Potential impact
on the businessResponse/actions we’re taking
and how they are managed

Increased revenue

Our products and services play a key rolein the technology pathway to enable thetransition from fossil fuels to a low-carbon
economy. Our enabling technologies, such as
materials analysis solutions, efficient powerswitching, and semiconductor equipment,
help customers address these challenges.

Increased revenue

Our new product development process
takes environmental considerations into
account. Developments in our semiconductor
equipment are implicitly geared towards
energy efficiency as well as our watersaving alternative to the standard chemicalmechanical planarization (CPM) processused to create a smooth surface on
semiconductor wafers.

Increased revenue

We have been working with key
suppliers to embed material andenergy efficiencies into the products
we purchase.

Increased revenue
and decreasedtransport costand emissions

Almost all our products are already shippedwith remote connectivity and we are building
business system infrastructure to enableremote service capabilities.

Resource
efficiency

Decreasedtransport costand emissions

We are engaging in strategic building of
capabilities and services to deliver efficiency
to customers. Load optimisation in logistics is
also part of this strategy. We continue to lookfor opportunities in this area.

EnergysourceReduced costs andScope 2 emissions.
Renewable
electricity can also
provide operating
cost savings andreduce operational
exposure tocarbon pricing.

Our current renewable energy programme
utilises REGO-certified or REGO-equivalentcertifications of renewable electricity. We
make use of solar arrays on our Severn Beachand Scotts Valley manufacturing sites, alongwith our Tokyo office. We are investigating
adding additional renewable generation
capacity to suitable sites.

Reduced costs
and emissions

Group-wide, we are continually looking foropportunities to embed resource efficiency
into our operations. Opportunities can besmall, such as reducing waste or water
usage, or part of larger capital projects, e.g.
replacement of boilers at our Tubney head
office and manufacturing site, and all-electricheating at our new site in Severn Beach.
We seek to invest in long-term, alternativetechnologies as they become suitable andeconomically feasible.

Resource
efficiency

NZE scenario
KPIs

•
•

Low-carbon market
segments growth
Industry investment in
low-carbon R&D

2027

2035

STEPS scenario
2050

2027

2035

2050

Scenario Implications

Under NZE, there is significant
investment in renewables andalternative technologies. Slower
change under STEPS.

Internal R&D investment
Scope 3 category 11,
12 emissions

Under NZE, there is significant
investment in renewables andalternative technologies. Slower
change under STEPS.

•

Number of suppliers
carbon data obtained
from Scope 3 –category 1, 11 emissions

Under NZE, more significant
investment in renewables andalternative technologies. Slower
change under STEPS.

•

Revenue fromremote services

Slightly increased exposure
under NZE due to additive effectof organisation seeking carbon
reduction opportunities.

•

Scope 3 – category 4,
9 emissions

Slightly increased exposure
under NZE due to additive effectof organisation seeking carbon
reduction opportunities.

•

Scope 2 marketbased emissions
Percentage of
renewable electricity
out of total electricity

Greater availability of supply
under NZE. STEPS lags slightly,
reduced availability of REC.

Scope 1 and Scope
2 (location-based)emissions
Total waste
Total water

Greater exposure under NZE due
to more investment in resource
efficient products and services.

•
•

•

•

•
•

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Oxford Instruments plc
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Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Physical risks
The frequency of physical climaterelated impacts is expected to increasein the future through an increased
frequency and severity of extreme
weather events. Oxford Instruments
has used Munich Re’s Location Risk
Intelligence tool to assess the Group’s
sites and key suppliers’ current andfuture risk exposure to climate-related
disruptions. Sites have been assessed
for both acute and chronic physicalrisks, including potential risks such as
drought stress, tornados, storms, sealevel rise and flooding events
among other hazards.

Particular attention has been paid
to the four UK manufacturing sites(Severn Beach, Tubney Woods,
High Wycombe and Belfast) as they
contribute roughly 80% of Grouprevenue. Due to the nature of physicalclimate-related risks manifesting
more over the long term, different time
horizons have been used from thoseused to assess the transition risks andopportunities. These are: 2030 (shortterm), 2050 (medium term) and 2100
(long term).

Significant risk/opportunity
Report to GroupThe following scenarios have beenused for the physical risk assessment:•

RCP 2.6 is an optimistic
scenario whereby atmosphericconcentrations of greenhousegases lead to a global temperaturerise of less than 2°C by the end of
the century relative to the preindustrial period (1850–1900).

•

RCP 8.5 is a pessimistic highemissions scenario, consistent witha future with no policy change toreduce emissions and leading to a
global temperature rise of around
4°C by 2100.

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Physical risks identified
Opportunity
type

Potential impact
on the businessResponse/actions we’re taking
and how they are managed

Opportunity

Opportunity description

Flooding

One manufacturing site is
projected to be a Zone 50 (2%chance each year of a flood event)site under all future scenarios
from 2030 onwards. A further
Acutemanufacturing site is located ina Zone 100-year return period
for storm surges (1% chance ofoccurring each year).

Increased costs anddecreased revenue
through decreased
manufacturing output,
delayed production
times and damage
to site infrastructure,equipment, or inventory.

Oxford Instruments’ sites are insured
for asset/property damage as well as
business interruption. Each site has abusiness continuity plan and emergency
response measures in place to deal
with significant events. At our new
Severn Beach facility, the building wasconstructed on a 1.5m raised platform
to mitigate flooding risk exposure.

One manufacturing site is currently
at a high-risk level and projected
to remain high against futurescenario projections. A further
Acutemanufacturing site increases
from medium to high risk acrossall projections including the most
optimistic scenario by 2030.

Increased costs anddecreased revenue
through disrupting
manufacturing output
such as road closures,
evacuation orders,
restricted access,or damage to site
infrastructure.

Oxford Instruments’ sites are insured
for asset/property damage as well as
business interruption. Each site has abusiness continuity plan and emergency
response measures in place to deal withsignificant events.

Decreased revenue

Business interruption insurance provides
a degree of cover in the event that supply
chain issues cause significant disruption
to production.

Wildfire

Supplier
disruption
from extreme
weather

www.oxinst.com

Increasing extreme weather
events can cause supply chain
disruptions or site shutdowns.
Analysis indicates low physicalrisk for our key suppliers currently. Acute
However, two of our key suppliers
are at increasing risk of riverflooding and sea level rise acrossboth scenarios in the long term.

2.6 Scenario
KPIs

•

•
•

•

•
•

•

2030

2050

8.5 Scenario
2100

2030

2050

2100

Scenario Implications

Number of days
operations are
disrupted due toflooding events
Revenue loss fromsite disruption
Insurance premiums

Minimal change in exposure
between RCP2.6 and 8.5.

Number of days
operations are
disrupted due to fire
events
Revenue loss fromsite disruption
Insurance premiums

Increased exposure under
RCP8.5, particularly in the longterm 2100 projections.

Number of days
our operations are
disrupted due tosupply chain issues
resulting from extreme
weather events

Minimal change in exposure
between RCP2.6 and 8.5.

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Overview

SUSTAINABILITY: TCFD STATEMENT continued
Impact on strategy andfinancial planning
We consider climate change to be aprincipal risk for Oxford Instruments,
but also a source of material
opportunity, given our focus on
accelerating breakthroughs, and theend markets we serve. Our assessment
is based on having evaluated key
climate-related risks and opportunities,
including understanding the potential
impact of each in terms of its time
horizon, likelihood and magnitude,
and the stakeholders or areas of thebusiness that may be affected.
Although there is not a dedicatedclimate-related R&D budget,
our existing R&D expenditure
incorporates climate change. Our
products are designed to address
our structurally growing markets inadvanced materials development
and semiconductors, which both havea key role to play in decarbonisation
and addressing the impacts of climatechange. In terms of the direct impactof our products, considerations areincorporated into the Group’s New
Product Development process, toensure the ongoing reduction of
the carbon footprint of our products
through energy use, packaging anddistribution, as well as increased
recyclability and upgradability. In
addition to R&D considerations, thecosts of planned climate initiatives
are included within each business
unit’s annual budget plans of capital
expenditure requests. For example,
when purchasing new offices andmanufacturing sites we always takeenvironmental considerations into the
procurement process.

Resilience of theorganisation’s strategy
to climate change
The scenarios used in our climate
scenario analysis are explained in
more detail above. They have been
selected to provide contrasting
scenarios which allow us anunderstanding of how resilient theGroup is under different situations andtemperature pathways. Our identified
climate-related risks and opportunities,
and action plans to address these,
highlight that in aggregate our overall
climate risk exposure is moderate. We
believe, given our current mitigationplans, that we can incorporate
climate risks into our business-asusual activities and that the Groupis financially resilient to climatechange. Therefore, we do not currently
envisage any additional significant
capital expenditure or changes tobusiness strategy as a result of climatechange that sits outside of our normalplanning. Please see page 156 of our
financial statements where the impactsof climate have been considered.
The outputs of the scenario analysis
we have carried out can be found on
pages 43 to 49. The limitations of this
scenario analysis are:•scenarios often only provide highlevel global and regional forecasts;•

not all risks are easily subject toscenario analysis;•

scenario analysis requires analysisof specific factors and modellingthem with fixed assumptions;•

impacts are to be considered in
the context of the current financial
performance and prices;•

impacts are modelled to occur ina linear fashion when, in practice,
dramatic climate-related impacts
may occur suddenly after tipping
points are breached;•

the analysis considers each risk
and scenario in isolation when, in
practice, climate-related risks may
occur in parallel as part of a wider
set of potential global impacts; and•carbon pricing is informed by
the Global Energy Outlook 2023
report from the International
Energy Agency.

Metrics and targets
Climate-related metrics
We disclose our Scope 1, 2 and 3
emissions in line with the Greenhouse
Gas (GHG) Protocol A Corporate
Accounting and Reporting Standard,with additional guidance from the GHG
Protocol Corporate Value Chain (Scope3) Accounting and Reporting Standard
and the GHG Protocol Technical
Guidance for Calculating Scope 3
Emissions. This covers the accounting
and reporting of the seven greenhousegases covered by the Kyoto Protocol.
An operational control approach was
adopted, with all material emissions
sources reported.
We also disclose a wide range of
metrics to help us to track our progress
across a number of climate-related
and sustainability-related areas. This
includes electricity consumption, GHG
emissions intensity and water andwaste usage. The specific metrics used
to track our climate-related risks andopportunities are identified on pages
37 to 39. Please see the environment
section, pages 35 to 39 for further
information, and for this year’s SECR
reporting, the primary means by which
we report our progress and track
our impact.

Climate-related targets
As set out in the environment section,
we are committed to reaching net zerocarbon emissions (where we add noincremental greenhouse gases to theatmosphere) against Scopes 1, 2 and 3
by 2045. This year we are also pleased
to announce further ambition on our
Scope 1 and 2 net zero targets, with a
new target to be net zero in Scopes 1
and 2 by 2030. In the coming months
we are planning on setting ambitious
Scope 3 targets and also to have our
Scopes 1, 2 and 3 targets validated by
the SBTi. We subsequently also planto publish a net zero plan that will
detail our costed actions to achievethese targets.

Governance

Strategic Report

SUSTAINABILITY: SOCIAL

Social: We believe that businesses have avaluable contribution to make to society
We are acutely aware of our
responsibility to our employees, thecommunities that we impact and thegenerations to come.

Our social
sustainability agenda
Our social sustainability agenda
comprises six key subject areas,
as follows:• Culture, values and engagement• Equity, diversity and inclusion• Health, safety and wellbeing• Investment in our people• Next-generation talent• Community impact

Culture, values andengagement
We strive to create an open, inclusive andvalues-driven culture, where colleagues
feel able to share their views in a two-way
dialogue with senior leaders.
Our Chief Executive Officer and theleaders of our business units andregional teams based around the world
hold regular in-person and virtual
briefing meetings where employees
are encouraged to, and do, ask awide range of questions. The Board
discusses current workforce issues
regularly with management, andmeets a broad range of employees,
for example at site visits by the Chair
and Non-Executive Directors. We also
gather our people’s views annually
through our global engagement survey,
monitoring a range of cultural KPIs
and taking action on opportunities for
improvement at business unit, regional
and Group level.

Our overall engagement score in our2023 global survey, completed by
86% of employees, was maintained
at 78%, comparing favourably withexternal benchmarking1.
This year, we have carried out an
extensive piece of engagement work
led by Chief Executive Officer Richard
Tyson and the Management Board,
focused on our culture and ways
of working (see page 95). Informedby employee focus groups, this has
resulted in a new articulation of how
we work together, which will support
the delivery of our strategy (see pages
10 to 15 and 22 to 23). Both the strategy
and the ways of working (summarised
below) have been rolled out to all
employees via a global roadshow led
by the Chief Executive Officer, and arebeing fully integrated via leadershipinteractions with teams and ongoinginternal communications.

Our ways of working

We start withthe customer

We succeedby being
focusedWe makeand keep
our promises

We work
together as
one team

We help andtrust each otherto succeed

Our values

Inclusive

Innovative

TrustedPurposeful

By seeking out different
perspectives and diverse
collaboration, we deliver
better solutions andlasting success.

Through our knowledge,
expertise and focusedcuriosity, we create new
possibilities for ourselves
and for our customers.

We build successful,long-term relationships
based on accountability,
integrity and respect.

We care, and our passion
and commitment drive
positive change inthe world.

1.	Gallup 2023 research indicating an average global engagement rating of 23% across a range ofsectors www.gallup.com/394373/indicator-employee-engagement.aspx

www.oxinst.com

Financial Statements

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Overview

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Strategic Report

Financial Statements

SUSTAINABILITY: SOCIAL continued
Equity, diversity and inclusion
We are committed to creating adiverse and inclusive culture. We
use the term equity, rather thanequality, as not everyone is startingfrom the same place, has the samechallenges or requires the same levelof support. Equity, therefore, refers togiving everyone what they need tobe successful, and reflects our focus
on equality of outcomes. At Oxford
Instruments, we want to encourage
everyone to achieve their potential
by actively ‘levelling the playing
field’ wherever needed. We seek todevelop and sustain a supportive andcollaborative working environment
where difference is recognised,valued and celebrated. However, we
also recognise that we operate in 17
countries around the world in which
the legislative frameworks and culturallandscapes vary hugely. In each of thecountries in which we operate, we aim
to be ahead of the curve in our equity,
diversity and inclusion targets, and ourworking practices, but will ensure that
we are not in conflict with legislative
frameworks.
Our approach to equity, diversity andthe prevention of discrimination isoverseen by the Board Sustainability
Committee. Our global Equity, Diversity
and Inclusion policy, covering 100% of
our operations, and publicised to allcolleagues via our intranet, sets out our
expectations in this area, www.oxinst.
com/corporate-content/diversity-andinclusion.
We have identified several key areasof focus, including gender, ethnicity,disability and sensitive medical
conditions, family responsibilities,
sexual orientation and gender identity,
pursuing a range of initiatives to recruitfrom a diverse pool of talent, and tosupport our existing workforce.
We have joined Business in theCommunity (BITC) and the Business
Disability Forum as part of ourcontinual drive to improve ourawareness and understanding of bestpractice in diversity and inclusion
for businesses. In 2024, we signed
up to the BITC Race at Work charterto underline our commitment toimproving equity of opportunity inthe workplace. We also engage
in externally run schemes offeringinternships and career opportunities inour diversity and inclusion focus areas.

During the year, employees havelaunched a women’s group and aneurodiversity group; these join existing
impact groups focused on race andethnicity and LGBTQ+ issues andhave been enthusiastically adopted
by both members and allies of each
community. During the year we havesuccessfully piloted new inclusive
leadership training, with a wider rollout planned for 2024/25.
We are committed to eliminating our
gender pay gap. We monitor, measure
and take action globally,. Our external
data reporting is focused on our UK
workforce and is published in our
Gender and Ethnicity Pay Gap Reportwww.oxinst.com/corporate-content/
gender-pay-report. The gap for our
Oxford Instruments Nanotechnology
Tools entity in the UK, representing 758
employees in 2023, currently stands at
10.4% (median).
We are also committed toaddressing the gender balance of
our workforce, with targets of 30%
female employees overall by 2030
and 40% female leadership by theend of 2025. A particular area of focus
is on increasing the diversity of ourmanagement board, which is being
actively addressed.
We continue to build on the work wehave done so far to establish balanced
recruitment shortlists (that is, shortlists
including candidates from groups which
are underrepresented in our workforce,
including women). We only engage
executive search firms who have signed
up to the Voluntary Code of Conduct ongender diversity.

CEO Richard Tyson makes his Pride pledge

www.oxinst.com

Our inclusive approach to recruitment
includes the use of technology toensure that the language used in job
advertisements is free from gender bias.
We operate a hybrid working policy
which helps employees to balance
work and personal commitments.
We also offer support and, whereappropriate, special leave, for thosewith caring needs for dependents.
Following the reconfiguration of ourinternal employee data portals to
include the Office for National Statistics
ethnicity categories, some 90% of UK
employees and 78% of employees
globally have provided data on theirethnicity. This year, for the first time,
we have reported on our UK ethnicity
pay data. This indicates that 10% of our
UK workforce identify as being part ofan ethnic minority group, and that on
average, these colleagues are paidslightly more than their peers (1.4%
mean and 1.7% median).
We are committed to using this datato help to ensure that our processes
and pay are fair and equitable withrespect to race and ethnicity, as wellas the characteristics on which wehave had full data for several years.
The Parker Review recommends
that we devise and work towards a
specified target for the percentage of
our senior management team to befrom ethnic minorities by the end of
2027. As an international company, we
recognise the importance of ensuring
we have strong ethnically diverse
leadership role models and a diverse
decision-making team that reflects ourcustomer base and the communities inwhich we operate.

This year we have taken steps to broaden the ethnic diversity of our wider seniorleadership team which, as of the date of the Annual Report, comprises 14 persons,of whom 14% are Asian. There are 102 direct reports of this team, of whom 22%
identify as belonging to an ethnic minority group. In that context, we will beseeking to maintain and improve the ethnic diversity of this cohort (ie, our wider
senior leadership team and their direct reports) on a year-on-year basis, within atarget range of 20% to 25%.

New employees in
FY23/24 by gender

Our Gender and Ethnicity Pay Gap Report provides more information on all theseareas: www.oxinst.com

Gender split
Male

FemaleGlobal Oxford Instruments

73%

27%

Plc Board

50%

50%

Management Board

92%

8%

Male69%

Managers

76%

24%

FemaleEmployees

72%

28%

Male

Female

UK

77%

23%

Europe

68%

32%

Asia

68%

32%

America

69%

31%

31%

Gender split by region

Targets:
Objective

Target (with date if applicable)

Progress to date

Balanced shortlists
for recruitment

100%

End of 2023/24: 82%

Ethnic minority representationon the Board

1 person of colour

Met

Women on the Board

By end of 2023/24: 40%
women in line with FTSE
Women Leaders target

Met

Women as a proportionof senior leadership

By end 2025:
40% women

34% (2023: 31%)

Women as a proportion of total
Oxford Instruments population

By end 2029/30:
30% women

Currently 27%(2023: 26%)

Three cohorts undertook the Oxford Instruments Leadership
Programme during the year

Team-building at the Foundations early careers programme

53

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: SOCIAL continued
We are proud to support our local community groups andcharities alongside being inclusive of our people and culture
through the celebration of events and achievements.

Health, safety and wellbeing

We are committed to fostering a healthy, safe and productive
work environment for our entire workforce, and to driving continuous
improvement in our health and safety (H&S) performance.
The Board is responsible for oversight of our approach to
H&S, supported by the Sustainability Committee.
Our six-step strategic framework, rolled out in 2023/24,
supports continuous improvement via six key areasof management.

CultureCollaboration

Controls

Employee turnover rates

We have achieved our objective of increasing H&S
awareness and reducing the actual number and severityof incidents. Our accident frequency trend remains on
a downward trajectory, with no serious incidents and adecrease in minor accidents reported in 2023. There havebeen no employee or contractor fatalities in the fiveyear reporting period from 2019 to 2023. While our H&S
performance compares favourably with industry standards,
we remain vigilant and prioritise global safety through ourPush for Zero initiative, which aims for a sustained reductionin accidents over time.

Health and safety five-year performance5

Healthy, safe andproductive working
environments

43
30

CompetenceCommunication

Clarity

1

1

34

35

21

2019

2020

Serious injury

Overall, our management approach is based on the ongoing
identification and control of risk. We focus on preventative
measures to remove hazards before they can escalate into
accidents or near misses.
Recognising that our entire workforce has a role to playin creating a safe working environment, this year we haveenhanced the Shield incident reporting system throughwhich we record, manage and monitor accidents and safety
observations, and to which all employees have access. The
system has supported our improved performance since its
introduction in 2019.

Increasing health and safety awareness
1,349
1,121
876

810

288
77

100

144

2019

2020

2021

Safety notifications raisedwww.oxinst.com

188

2022

283

2023

Shield contributors (allemployees can contribute)

19

2021
Minor injury

0

0

42

41

21

2022

18
2023

Accidents per
1,000 employees

Our structured H&S management systems, subject toexternal audits as required, underpin our commitment tosafe work practices. At our primary manufacturing facilities
in the UK, representing 83% of revenue, we maintain ISO
45001 certification. The effectiveness of our management
systems is further supported by a robust internal audit
programme across all operational domains.
During the 23/24 financial year more than 1,000 employees
have received H&S training. This figure comprises training
renewals and onboarding of new joiners. This year, we havelaunched an Institution of Occupational Safety and Health(IOSH)-accredited training programme globally, acrossall business units and regions. Over a 24-month period,
training will be provided to executive team members andeligible members of our management, production andservices workforce, further enhancing their H&S competency
and awareness.
We support our employees and their families by providing
an increasing range and number of opportunities to enhancetheir wellbeing, including readily accessible support services
on a wide range of topics from financial wellbeing to mental
health and health assistance programmes.
We strive to empower individuals coping with mental healthchallenges or disabilities to thrive in their professional roles,
encouraging colleagues to seek assistance when needed,
via our team of Mental Health First Aiders and through theprovision of independent and confidential digital platforms
and services, accessible to employees globally.

Year

Turnover2023/24

12%, of which 9% was voluntary

2022/23

11%, of which 9% was voluntary

2021/22

14%, of which 11% was voluntary

2020/218%, of which 6% was voluntary

2019/20

15%, of which 7% was voluntary

2018/19

14%, of which 10% was voluntary

Employee numbers

This year, three cohorts (35 employees) have undertaken
our bespoke Oxford Instruments Leadership programme,
which brings together high-potential candidates from acrossthe Group and covers a wide range of topics includinginterviewing skills, self-development, developing others andmanaging remote teams. We have delivered Management
Essentials training to 61 managers Group-wide, andrelaunched programmes focused on Project Management
Fundamentals and Project Leadership. We have also piloted
a new Foundations programme for emerging talent, designed
to give aspiring leaders a variety of tools and techniques toallow them to work effectively as they progress their career at
Oxford Instruments.
We have a robust system of regular feedback. 100% of ouremployees have undergone an evaluation process in theyear, embedded through our annual performance review,which also encompasses career development with a focus
on training opportunities.

Full time

Part time

Contract workers

2023/24

2,090

144

69

2022/23

1,894

134

86

Next-generation talent

2021/22

1,662

126

70

2020/21

1,518

107

100

2019/20

1,448

114

70

We take our responsibility towards developing the nextgeneration workforce seriously and are committed toinspiring the next generation of scientists, engineers andbusiness people by showing them the difference they canmake in the world.

All employees are guaranteed a fair salary and other
employment benefits in accordance with their role andresponsibilities. We ensure compliance with minimum wage
legislation and strive to offer competitive compensation
packages suitable for each position and our business needs.
All employees, regardless of location, are entitled to legallyrequired benefits such as annual leave, sick leave, maternity
leave and standard working hours. A number of employee
benefit changes have been implemented over the lastyear to improve the competitiveness, attractiveness andcost-effectiveness of our total remuneration propositions.
These include the doubling of the potential award under
the growth incentive plan available to all employees notin another bonus scheme to £1,000 (or equivalent). We
also have achieved Living Wage accreditation in the UK. In
addition, all UK-based employees have access to our Share
Incentive Plan scheme after six months’ service. Furthermore,in compliance with UK regulations, all UK employees havethe option to enrol in our workplace pension scheme.

Investing in our people
Our people and their capabilities are core to what makes us
a great company. We are committed to being the company
where the best people in our sector want to work, and to
training our people and enabling their career development
and employability.
We provide a range of opportunities for our employees
across technical, commercial, operational and businesssupport functions to gain knowledge, skills and experience.
This includes challenging assignments, learning fromcolleagues and targeted training. Colleagues havecompleted almost 14,000 online training courses in
FY23/24, pursuing more than 750 different courses.
We continue to strengthen our Oi Academy, which offers
development programmes, core skills training courses
and e-learning opportunities. We also offer a broad rangeof secondments, career breaks, apprenticeships andsupport towards external qualifications.

For us, this begins in schools, colleges and learning institutions,where we equip and encourage our employees around theworld to take any opportunity they can to talk to young people
about careers in our industry. We partner with universities andpost-graduate schools to help students understand the rangeof careers available in a technology company, supporting thiswith work experience and engagement with employees froma broad range of backgrounds. A popular benefit we offer all
employees is the offer of work experience to family members
between the ages of 16 and 25.
We remain committed to providing structured
apprenticeships, sponsorships, internships, early career jobs
and graduate programmes. We intentionally reach out toattract a diverse range of people and those from untapped
talent pools, ensuring we are inclusive and accessible.

Community impact
We actively engage in locally focused activities that makeour communities and environments a better place to live andwork. All employees are offered up to two paid volunteeringdays a year to share their professional or practical skillsin the community; we also participate in charity outreachprogrammes and offer sponsorship of local community events.
Our network of Go Green teams (see page 35) drives action
to be more environmentally friendly, both as a business andas individuals.
When we arrange gifts, celebrations, events and activities
for our teams we aim to support the small, independent
businesses near our sites. We also participate in a rangeof charity outreach activities, including raffles, marathon
sponsorships, pub quizzes and coffee mornings.

55

56

Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: GOVERNANCE

Governance: Upholding high ethical standards
Inclusive, innovative, trusted and purposefulWe are wholly committed to conducting our business
responsibly and holding ourselves to high ethicalstandards. Our strong values (see page 51) underpin
everything we do; from how we work with each otherand our customers to how we trade with suppliers. Every
representative of Oxford Instruments is expected tobehave in a way which is consistent with these values.
Our approach to governance is summarised in our Codeof Conduct, which is updated regularly, issued to all new
joiners and communicated regularly to existing employees.
All colleagues, customers and suppliers also have roundthe-clock access to our widely publicised and independentwhistleblowing hotline, Safecall (www.safecall.co.uk/en/
clients/oxinst/), should they encounter any behaviour not in
keeping with our ethical standards.

Our governance sustainability agenda
comprises eight key areas
Our overarching governance sustainability agenda, set out
below, is overseen by our Board Sustainability Committee,(see pages 117 to 119); with the exception of anti-bribery
and anti-corruption, sanctions, export control and customs,
and financial sustainability and tax transparency, which areoverseen by the Audit and Risk Committee (see pages 110
to 116).
1

Anti-bribery and anti-corruption

When dealing with business partners, suppliers andcustomers, or when engaging with public officials, we expect
our employees to act in a transparent and fair manner. We
choose our business partners and suppliers carefully andavoid working with anyone who does not meet and adhere
to the same high standards.
The key principles we expect everyone to follow include
not offering or accepting bribes or improper payments;
not improperly influencing any individual; and notparticipating in any kind of corrupt business activity, either
directly or through a third party. To help our employees
understand what is expected of them we have developed
a comprehensive training course, refreshed this year, which
all new joiners must complete to pass their probationary
period, and which all employees must retake annually; wealso maintain a detailed policy document, www.oxinst.com/
investors-content/compliance/anti-bribery-and-corruption.
No one has been dismissed during FY23/24 as a result of
having committed bribery.

2

Sanctions, export control and customs

We review our Sanctions Policy regularly (most recently in
May 2024) to align with UN, UK, EU and US sanctions.
We are committed to adhering to both the letter and thespirit of export controls governing our activities, and engage
regularly with the UK Government’s Export Control Joint
Unit and its equivalents in other jurisdictions. In response
to geopolitical shifts, we have pivoted our regional focus
towards less sensitive applications and customers in China
this year, and exited the quantum market in the country.
3

Inside information and share dealing

As a listed company on the London Stock Exchange,
Oxford Instruments and its employees must comply withthe relevant laws relating to inside information and sharedealing, including the UK Market Abuse Regulation, as wellas our internal Share Dealing Policy. We ensure that there
are adequate procedures, systems and controls in place toidentify, manage and disclose inside information and also
support our employees and anyone working on our behalf
with understanding their obligations.
4Supply chain responsible sourcing

We operate our business in compliance with all applicablelaws and regulations and expect our suppliers to do thesame. The overarching standards we expect from our
suppliers, covering all operations, are set out in our Supplier
Quality Manual, which incorporates our Code of Conduct
for Representatives and Suppliers, www.oxinst.com/assets/
uploads/documents/OI_COC_REPS_SUPPLIERS.pdf.
In addition, as part of our supplier contracts, suppliers are
required to warrant that they and their sub-contractors willcomply with all applicable laws, statutes, regulations andcodes relating to modern slavery, anti-bribery and anticorruption, and Oxford Instruments’ Supplier Quality Manual,
which incorporates our Code of Conduct for Representatives
and Suppliers.
We are committed to avoiding the use of controversial
materials and proactively eliminating the use of so-called‘conflict minerals’, i.e. minerals sourced from mines in the
Democratic Republic of Congo and adjoining countries
which support or fund conflict from products and the supply
chain. Our conflict minerals policy covers all operations. We
undertake due diligence on our key suppliers and expect
them, in turn, to conduct due diligence on their own supply
chain to help eliminate the use of conflict minerals.
Our online supplier portal allows us to store and audit
our key supplier documents and has been extended
and updated in 2024 to collect information on productenvironmental compliance, quality and sustainability.

5

Human
rights and modern slavery

We are committed to preventing acts of modern slavery
and human trafficking from occurring within our businessand supply chain. We take a zero-tolerance approach to all
forms of modern slavery, including servitude, forced bonded
and compulsory labour, and human trafficking. We require
our suppliers to guarantee the applicable national statutory
minimum living wage.
Bespoke training is mandatory for relevant employees tohelp them recognise where there may be risks of modern
slavery and human trafficking within our business and our
supply chains.
We have an established Whistleblowing Procedure for
employees to report any concerns, and further guidanceis also made available in our Global Human Rights
Policy. In addition, we have extended the availabilityof our Whistleblowing hotline to all our suppliers andrepresentatives.
Our global Code of Conduct sends a clear message to
our employees, business partners, investors and otherstakeholders about our business principles and ethics.
Our Anti-Slavery and Human Trafficking Statement is
updated annually and can be found both on our website andon the Government’s Modern Slavery Statement Registry.
6Intellectual
property and confidentiality

Our intellectual property (IP) is one of our most important
assets; it is key to our success in the market and enables
us to secure and maintain a competitive advantage. We
have comprehensive policies and procedures in place toprotect it, including templates, guidance and training forcolleagues. We continue to protect our inventions, brandand designs through the use of registered IP rights. In theyear we filed a number of new priority patent applications.
Oxford Instruments often collaborates with third parties
on projects which generate new IP, further enhancing our
product offerings to our customers. In these situations,
we will not use any IP without it first being legitimately
acquired or licensed.

7

Dataprotection, data privacy and data security

Our global privacy standard www.oxinst.com/corporatecontent/privacy sets out the principles that guide ourapproach to handling personal information, and all
employees are required to undertake mandatory training
on data protection.
Our marketing teams work closely with our legal teams
to ensure our marketing activities are compliant with theEuropean General Data Protection Regulation (GDPR), UK
GDPR and related privacy legislation in other territories. We
have invested in high-quality CRM and marketing businesssystems infrastructure that have enabled us to enhance our
security and controls.
Our legal team develops compliance programmes aroundthe world to ensure we can respond quickly to any changes
made in the data protection legislation and guidancefrom regulators.
This year we reduced our internal IT vulnerabilities
significantly as a result of upgrading or decommissioning
approximately 100 IT systems globally. We also conducted
several phishing exercises and rolled out mandatory
training for individuals who were identified as requiring
additional assistance.
8

Financialsustainability and tax transparencyWe manage our tax affairs in accordance with thefollowing objectives:•

ensuring compliance with all relevant tax law inall jurisdictions in which the Group operates whilst
managing the associated tax costs in a manner that is
consistent with our Code of Conduct and its attitude tocommercial risk;•

seeking to maintain stable effective and cash tax rates
which reflect the geographic markets in which we
operate, and the Group’s tax attributes, such as broughtforward losses and special deductions such as forresearch and development; and•ensuring that all communication with tax authorities isconducted in a transparent and professional manner.

Our Group Tax Strategy is available on our website
at oxinst.com.

www.oxinst.com

57