Climate change

Climate change is currently one of the biggest environmental issues for our planet. The nature of our business means that our own carbon footprint is relatively small compared to that of energy-intensive industries. We also believe that climate change is not a significant area of direct risk or opportunity for the company at present. However, the scale of the issue means that all businesses, regardless of their sector, need to address the challenge.

Our carbon footprint

We are committed to playing our part in combating the man-made causes of climate change. Following last year’s mapping of our global carbon footprint, we have repeated this exercise and improved the quality of our data and the scope of our measurement (estimated at covering operations representing 94% of full-time equivalent employees FTE in 2007/08).

We measured our 2007/08 global carbon footprint to be approximately 67.4 thousand tones of CO₂, an 8% increase versus the previous year in absolute terms. This compares with the growth in sales of 10% and the 14% increase in the number of employees (FTE).

The increase in overall emissions is split into a 3% increase of emissions related to buildings and a 16% increase related to employee travel. These increases are partly due to an improvement in scope coverage.

In 2007/08, 13% of our electricity was purchased under "green" contracts (versus 8% the previous year). This has resulted in a 3% reduction of our total emissions. We will continue to evaluate the use of such alternatives where they are available to our businesses.

While overall emissions have increased compared to 2006/07 we are pleased that average emissions per employee have decreased. We will continue to work on improving our infrastructure, energy management and employee behaviour to reduce our emissions further.

GRI	CO₂ emissions	Units	2006/07	2007/08
	Total	1 000 tCO₂	62.6	67.4
EN16	Scope 1	1 000 tCO₂	15.6	17.0
EN16	Scope 2	1 000 tCO₂	33.0	33.7
EN17	Scope 3 (Business travel)	1 000 tCO₂	14.0	16.6

Our carbon footprint was calculated using a template adapted from the Greenhouse Gas (GHG) Protocol of the World Business Council for Sustainable Development (WBCSD) tools. This protocol is the internationally accepted template for accounting and reporting on GHG emissions.

Key definitions are:

Scope 1: Direct GHG emissions from sources that are owned or controlled by the company. It includes energy use from buildings and emissions associated with the vehicles we operate.
Scope 2: Indirect emissions associated with purchased electricity, heat and steam.
Scope 3: All other indirect emissions that are a consequence of the activities of the reporting company but occur from sources owned or controlled by another company. We have measured emissions resulting from the usage of private cars and the mileage from the use of commercial airlines for business travel.

Offsetting Greenhouse Gas emissions

We have committed to offset the emissions we have not been able to reduce by March 2009. We will purchase CO₂ certificates equivalent to our 2007/08 CO₂ emissions during the current financial year and make a retrospective adjustment once the final 2008/09 figures are available.

Scope and quality of data

Consolidated data covers our subsidiary companies where the Group has management control (defined as a shareholding of greater than 50%). Our principal activities are manufacturing, distribution and retail. Data has been collected through our financial control function as an integral part of our approach to business reporting. We believe that integrating environmental reporting into our normal business reporting requirements will help focus attention and effort on environmental improvement within the Group and this is a model that we intend to continue. Data is not always available for some smaller retail outlets, in particular where we operate from shared sites. However, we expect the quality of this type of reporting to improve and mature over time.

Case Study: Cartier Horlogerie carbon reduction programme

Cartier Horlogerie, based in La Chaux de Fonds, Switzerland has taken a long-term and collaborative approach to reducing its carbon emissions. The company has signed a convention with the Swiss Agency for Energy committing to a 5% reduction in heat and electricity usage from 2004 by 2010. Improvements have already been implemented by investing in new equipment, switching to energy-efficient light bulbs, switching-off equipment when not in use and switching from fuel oil to gas. The initial target has already been achieved, resulting in an annual saving of more than 180 tonnes of CO₂.

Case Study: IWC employee environmental programme

Not content with reducing its own company carbon emissions, IWC, located in Schaffhausen, Switzerland has launched an innovative new programme to engage and support its employees in their efforts to be more environmentally responsible outside of work. The programme provides positive incentives to encourage employees to take carbon reduction measures in terms of travel and at home.

From January 2008, IWC has subsidised 80% of the cost of public transport for its employees and provided financial support to those who purchase low CO₂ emission cars. In addition, IWC has established a rule that employees should make use of public transport for all business meetings within Switzerland. Employees who invest in energy-saving or alternative energies in their homes, an example being solar panels, are financially supported through IWC subsidies. In a new move, from the spring of 2008, the IWC intranet will include a feature to allow employees to calculate their personal carbon footprint and offset this by investing in an environmental project. IWC will match 50% of this contribution.