Context

Richemont’s carbon footprint is relatively small compared to that of energy-intensive industries. Whilst we do not see climate change as a significant area of direct risk for the company 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 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.

The data covers our subsidiary companies where the Group has management control (defined as a shareholding of greater than 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. The scope of our measurement is estimated at covering operations representing 93% of full time equivalent employees (FTE) in 2010/11. The scope has evolved in respect of business acquisitions, notably NET-A-PORTER.COM

In the year to March 2011, we have increased our global CO₂ emissions by 25 % in absolute terms to 79 Ktons. The 25 % increase in overall emissions is split into a 22 % increase in emissions related to buildings and a 34 % increase in emissions related to employee travel. This increase has been achieved against a backdrop of a 33 % sales increase over the same period, including business acquisitions. Our work to promote good environmental practice means that the average CO₂ emissions per employee (FTE) have only risen to 3.7 CO₂t.

Following a re-evaluation of the conversion factors used, the Group’s CO₂ emissions in the financial year ended 31 March 2010 were revised downwards to 63 500 tonnes. Previous years have also been re-stated in the table below. PricewaterhouseCoopers has provided an independent assurance report on the Group's consolidated CO₂ emissions.

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 projects in China, the USA and Russia, including waste heat recovery, wind farms and landfill gas capture.

* The 2010/11 figures were updated between 24 June 2011 and 30 June 2011.

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.

The Group participates in the Carbon Disclosure Project (‘CDP’). Richemont has reported its CO₂-related information to CDP since 2007.

Other emissions and discharges

The Group does not collect data regarding ozone depleting substances nor NO nor SO nor other significant air emissions. These are not material to the Group’s businesses. Similarly, the Group does not collect data regarding the weight of waste by type and disposal method. As described above, 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 fines or non-monetary sanctions for non-compliance with environmental laws and regulations.

As disclosed above, the Group does participate in the CDP and collects data to estimate its CO₂ emissions, which are offset through the purchase of carbon credits. The Group also collects data regarding water discharges, but does not currently disclose this data.