Climate change


Brochure Context

Richemont’s carbon footprint is relatively small compared to that of energy-intensive industries. As discussed elsewhere in this report, whilst we do not see climate change as a significant area of direct risk for the Group at present, we recognise that managing the issues arising from climate change helps us to reduce our energy costs. Accordingly, our policy is to focus on reducing our own carbon emissions.

We measure our emissions each year and aim to reduce them. As the business is growing in absolute terms, we purchase ‘carbon offsets’. This has been our practice since 2008. We raise awareness of the cost of these offsets by re-invoicing the cost of carbon credits to each Maison within the Group. This approach allows a financial cost to be placed on carbon, which helps drive performance improvements, as does the motivation of employees in general.

Our approach

Carbon footprint

We calculate our carbon footprint based on the internationally recognised Greenhouse Gas (‘GHG’) Protocol of the World Business Council for Sustainable Development (‘WBCSD’). This protocol is the internationally accepted template for accounting and reporting on GHG emissions.

The data covers our subsidiary companies where the Group has management control (defined as a shareholding of at least 50 %). Data has been collected through our financial control function as an integral part of our approach to business reporting. Data is not always available for some smaller retail outlets, in particular where we operate from shared sites. Richemont uses energy estimations (per m2) to estimate the impact of these locations. The scope of our measurement is estimated at covering operations representing more than 97 % of full time equivalent employees (‘FTE’) in 2012/13 and includes retail outlets, offices, research and manufacturing sites, and distribution centres.

In the year to March 2013, our global CO2 emissions decreased by 1.4 % in absolute terms to 98.2 Ktons compared to 99.8 Ktons one year earlier. The calculation methodology, which was revised in the 2011/12 financial year, was unchanged in the 2012/13 year.

The 1.4 % decrease is comprised of a 7.6 % decrease in buildings-related emissions, largely offset by a 6.8 % increase in employee travel-related emissions. The significant decrease in buildings-related emissions reflects a great effort in purchasing fully renewable electricity. This programme is deployed in most of our manufacturing sites in Europe, and will be continued the coming years.

This welcome decrease has been achieved against a backdrop of a 14 % increase in sales and a 10 % increase in employees over the same period. Moreover, a growing proportion of the Group’s supply chain in fine jewellery and watchmaking has been internalised. Such manufacturing processes consume more energy per person than assembly processes. At the same time, the expansion of our boutique networks, and the energy consumed in lighting, heating and cooling such premises, has contributed to overall emissions. Our work to promote good environmental practice means that the average CO2 emissions per employee (‘FTE’) have dropped by 11 %: from 4.06 CO2t/FTE to 3.58 CO2t/FTE. The Group’s five-year targets relate to building, surface and FTE, whereas business travel relates to FTE only.

We aim to reduce our emissions as much as possible and neutralise the rest by participating in offsetting projects. Our prior year CO2 emissions were offset by a gold mine-related project in South Africa, the support of fuel efficient stoves in Ghana, reforestation in Colombia and other projects linked to zero-carbon energy in Indonesia, India and China. To raise awareness, the centrally-purchased carbon offsets are re-invoiced to Richemont’s individual Maisons based on their reported GHG emissions.

Since 2011, an independent assurance report has been provided on the Group’s consolidated CO2 emissions.

The Group participates in the Carbon Disclosure Project’s (‘CDP’) annual data collection process. Richemont’s 2012 submission received the following ratings by the CDP’s assessors: 79 % for disclosure (2011: 83 %) and level C for performance (2011: C).

 

GRI indicator
reference
CO2 emissionsUnits2008/09

2009/10

2010/11

2011/12

2012/13

Total 1 000 tCO2 59.9 63.5 79.3 99.8 98.2
EN16 Scope 1 1 000 tCO2 11.3 18.3 20.8 19.3 18.6
EN16 Scope 2 1 000 tCO2 31.4 31.5 40.2 49.6 45.2
EN17 Scope 3 1 000 tCO2 17.2 13.7 18.3 30.9 34.4

 

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.

Other emissions and discharges

The Group does not collect data regarding ozone depleting substances, NO, SO or other significant air emissions. These are not material to the Group’s businesses. The Group’s manufacturing facilities are located in Switzerland and elsewhere in Western Europe, where environmental controls are rigorously enforced.

No significant spills have been brought to the Group’s attention in the context of either the environmental or health and safety reporting processes. Similarly, the Group has not been subject to any material fines or non-monetary sanctions for non-compliance with environmental laws and regulations.

Following the preliminary findings from a Screening Life Cycle Analysis of certain watch and jewellery products carried out during the year, Richemont has a better understanding of our overall carbon footprint, i.e. the emissions generated by the so-called upstream and downstream activities of our business partners, including the mining of new raw materials.

Looking ahead

The Group’s five-year targets to reduce the carbon intensity (kilo/FTE) of buildings and business travel have been communicated to all Maisons and shared service platforms. Each reporting unit will elaborate its own plan to contribute to the achievement of those targets. In the meantime, carbon emissions will continue to be offset through the purchase of certified carbon credits.

Improving energy efficiency forms a key part of our strategy to reduce carbon emissions. We will continue to evaluate the use of ‘green electricity’ contracts where they are available.

The Group is also reviewing the potential to measure and subsequently offset carbon emissions generated by the freight and other logistics services carried out by third parties (Scope 3).

Case studies