ESG Spotlight: Xtrac
ESG Spotlight: Xtrac
The automotive industry faces unique challenges when it comes to reducing emissions and improving impact. Xtrac is an ESGmark® Certified transmissions manufacturer forging new paths in the industry with their Environmental, Social, and Governance (ESG) practices. Kirsty Knight, Xtrac’s People & Culture Director and Neil Johnston, Head of Finance, share Xtrac’s approach to responsible ESG practices and how they aim to lead by example.
ESGmark®: Tell us about Xtrac and about your role.
Xtrac is the world’s leading supplier of high-performance transmissions for top-level motorsport and high-performance automotive applications. Headquartered in Thatcham, UK, with operations in Mooresville, NC, and Indianapolis, IN in the USA, Xtrac designs, manufactures, and assembles all transmissions in-house. Trusted by top motorsport teams, Xtrac leads the transformation from internal combustion engine (ICE) to hybrid and electric vehicles (EV), delivering next-generation transmission solutions for motorsport and high-performance automotive.
The company’s ESG agenda is led by Kirsty Knight, People & Culture Director and Neil Johnston, Head of Finance.
ESGmark®: What sparked Xtrac to engage more closely with the ESG agenda?
At Xtrac we believe having an ESG Strategy is the right thing to do and having goals which are aligned to the UN Sustainable Development Goals supports not only a healthy financial performance but also drives a broader awareness of the impact we are having on our environment and society.
From the environment perspective this can be viewed through two distinct lenses.
Helping our customers both in the high performance automative and motor sport sectors navigate through a once in a generation change from ICE to electric powertrains via hybrid powertrains. In the last three years we have seen the percentage of our sales relating to hybrid and electric projects increase from 25% to 45% of total sales.
How we make our products. Focusing on both reducing our overall energy and water consumption and ensuring we use 100% certifiable renewable electricity. This has seen our energy intensity (energy/revenue) fall by 22% in the last three years and our Scope 2 Carbon emissions (using the market-based measure) fall by over 90% in the last three years. We also aim to use as much recycled material as possible and have zero to landfill policy for our waste.
The social aspects of ESG for Xtrac include understanding the diversity of our company, how we treat our customers and suppliers as well as how our employees are treated and how well they are taken care of. This includes things such as maternity leave, sick leave, holiday allowance, pay equality, wellness provision and so on. All these things affect both the employees and their families as well as how they interact with society.
Our governance element of ESG refers to how well we hold ourselves accountable for our actions and monitoring for our targets. This includes how transparent we are with the public, our employees, stakeholders, customers, and the communities we serve. This means we disclose information such as our carbon footprint, pay equality, and more. It also means ensuring we treat all our stakeholders appropriately and ethically.
In summary ESG is very important to us because:
1. It helps to improve our company image and reputation, from all our stakeholders, (employees, customers, suppliers, and wider community).
2. It can positively impact our financial performance.
3. It forces us to innovate, which uncovers all kinds of new opportunities for both us and our customers.
4. It is good for the environment and future generations to create a sustainable business.
5. It is just good practice!
ESGmark®: Tell us about recent ESG initiatives at Xtrac that you are proud of.
Recently we achieved the FIA 2-Star Environmental accreditation which demonstrates our commitment to ESG. The FIA Environmental Accreditation Programme is aimed at helping motor sport and mobility stakeholders worldwide to measure and enhance their environmental performance, so we were extremely pleased to be awarded this certification which demonstrates we have clear and consistent environmental management.
We also have received our third Princess Royal Training Award for our Apprenticeship programme which demonstrates our commitment to not only building the next generation of Xtrac Engineers but also provides opportunities for young people.
During 2024, we also put an increased focus on our STEM programme and enrolled over 25 internal STEM ambassadors who have engaged in c.280 hours of community activity across local schools and colleges showcasing the types of careers you can have at Xtrac as well as engage in some practical engineering exercises too.
ESGmark®: To date what has been the biggest challenge to improving Xtrac's ESG performance and how have you overcome it?
The biggest challenge we have faced has mainly been gathering all the evidence we need to monitor our Environmental performance to demonstrate and quantify the improvements that we know we have been making.
ESGmark®: What’s next for Xtrac on your ESG journey?
We are very keen to gain the FIA 3-Star Environmental accreditation so this will mean moving from complying with best practice principles to demonstrating a clear commitment and leadership to Environmental management and evaluation. This is also a stepping stone towards ISO14001 accreditation which we are targeting to achieve in 2026.
About ESGmark®:
ESGmark® is the community for people and organisations who care about the planet and society. We support organisations to credibly demonstrate and improve their Environmental, Social and Governance (ESG) credentials. The ESGmark® certification is a symbol of trust and distinction which allows consumers to identify organisations who believe in and act to deliver a fairer, more sustainable future.
Through our ESG Spotlight Q&A series, ESGmark® Certified organisations share their approach to responsible business practices and how they create positive impact for the environment, their clients, employees, and communities. Discover more Q&As here.