Our reliance on fossil fuels has caused the current climate emergency. A transition in the next few years to an economy powered by clean and renewable energy is paramount. At Lush, we align our definition of renewable energy resources with that outlined by RE100, therefore only recognise wind, solar, geothermal, marine (wave and tidal), sustainably sourced biomass (including biogas), and sustainable hydropower as renewable energy. 

At present, we are actively moving away from fossil fuels and nuclear energy through a number of different strategies. This is a combination of powering down – reducing energy demand first, replacing all fossil fuels and then powering up with renewables. We invent, manufacture and retail our products in buildings that we control but don’t own, so we need to partner with landlords for fabric improvements and invest in energy efficiency like LED lighting to reduce our demand. 

Procurement

Our renewable energy journey began in 2008 when we switched our UK manufacturing units to Ecotricity, and within a few years, all UK sites under our control had followed suit. Ecotricity is one of the few UK energy utilities that only invests in renewable energy—what we call ‘deep green’ energy companies.

Many markets followed over the ensuing years, including our biggest market in North America. 

Then finally in the financial year that ended in 2024, we hit a major milestone — 100% renewable electricity across Lush operations (excluding partner markets).  

We created an Electricity Procurement hierarchy that maps out where each market sits on their renewable journey, helping us figure out next steps for moving everyone forward. Ideally, we buy renewable electricity straight from ‘deep green’ energy providers – companies that only do renewable energy.

When deep green utilities aren’t around or just aren’t doable, we buy Renewable Energy Certificates (RECs) from suppliers who actually build new renewable infrastructure to match what we’ve had to purchase from regular utilities. We go for RECs with extra due diligence and benefits – what we call ‘Impact RECs’ in our diagram.By mixing deep green tariffs with quality RECs, we’ve hit 100% renewable electricity status (excluding partner markets). It’s a big win in our renewable power journey, and we’re working to get our partner markets on the same page.Our Germany and North America markets have also continued buying gas from renewable sources, using renewable landfill gas or biogas. The diagrams below show our move from fossil fuels (Brown Energy) to renewable (Green Tariffs).

This recent financial year, Italy, Australia and New Zealand moved to deep green tariffs, leaving us with ~40% of our properties on deep green renewable tariffs versus 60% on standard electricity tariffs with matching impact REC purchases, as shown in the chart below.

Impact RECs have additional sustainability criteria and benefits such as community solar, including pollinator-friendly habitats or additional consideration for impact on animals. EKOenergy label, for example, provides finance for additional projects that combat energy poverty. In FY24, 17% of our REC purchases were EKOenergy labeled. Our North American REC purchases (61%) are all certified green-e. In Japan, 37% of our RECs are purchased through small-scale local generators via the strict procurement policy of Updater/Minna and certified by the Carbon Disclosure Project.

Our focus for next year will be moving more markets to Deep Green Renewable Tariffs where available. Additionally, we’re seeking ways to purchase Taiwan T-RECs for our growing Taiwanese operations rather than purchasing Chinese RECs for this market.

We’re at 41% biogas and 59% fossil gas for heating. Our gas-to-electricity ratio is at about 30:70.

Moving Away from Fossil Fuels

Moving away from fossil fuel heating is tricky, especially with high heat demand in manufacturing and where local power networks can’t supply enough electricity. We still rely on natural gas or fuels like kerosene in these circumstances. We’re reducing this reliance by improving operational efficiency and switching to less carbon-intensive interim fuels.

We dig deep into potential downsides of fuel switching. Biogas production can include animal waste feedstock, while plant-based oils like HVO may increase monocultures and land use change. We are almost fossil gas-free in retail and are gradually electrifying our factories.

As a stepping stone toward electrification, we buy renewable natural gas (RNG) or biogas for Vancouver and Toronto factories, plus North American retail (9% of shops use gas). Vancouver’s biogas comes from local agricultural and wastewater sources, while Toronto manufacturing and retail locations support a methane-capture project from a Michigan landfill.

In the UK, our main R&D building (Unit 1 Witney) and Essential Oils/Perfumes factory can run completely on electricity, with Unit 1 supplied by 126kWp rooftop solar providing over 30% of annual electricity demand. Our Japanese manufacturing facility is already 81% electrified!

We’ve done a deep-dive energy audit of our Japanese facilities, which has given us a solid roadmap for energy improvements in FY25. Since 2011, we have been switching our lighting to LED and just upgraded shops in Germany, and replaced old LEDs with more efficient ones in UK bath bomb manufacturing facilities. Indeed, we were the first all-LED shop on the high street back in the day!

Our Croatian team has been exploring super energy-efficient, electrified building options as part of their upcoming move and lease renewal. On the retail side, we’ve been tweaking new shop designs—like adding double doors to cut energy waste in our new Glasgow store and we have a set of energy efficient measures like presence sensors and centralised building management controls in North America. We also kicked off the year by relaunching our ‘power down’ communications pack, games and a video packed with energy-saving tips for our retail teams.