environmental reporting methodology memo - …€¦ · kering environmental reporting 2014 ......

ENVIRONMENTAL REPORTING

Methodology Memo 2014

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Kering Environmental reporting 2014

Organisation

Indicators to monitor our environmental impacts

Kering monitors the main environmental impacts of its

business activities since 2004. The 2014 list of indicators

fully covers the topics mentioned in the article 225 of the

July 2010 “Grenelle 2” French law (in a quantitative or

qualitative way) and its application decree of 24 April

2012.

These indicators are split into 10 main themes:

Energy consumption

Water consumption

Waste production

Paper consumption

Packaging consumption

Consumption of raw materials

Transport (BtoB, BtoC and company cars)

Air pollution

Environmental management

General data on the site (surface, turnover, …),

enabling ratios calculation

A dedicated web-based reporting tool

Since 2004, Kering has implemented and updated a

reliable and secure web-based platform dedicated to the

collection, validation and consolidation of its extra-

financial data. This IT tool is designed to allocate

indicators according to site and brand specificities (e.g. a

Gucci store won’t receive exactly the same indicators as

a PUMA store or as a Gucci warehouse).

The reporting is done at site level (each physical site),

which allows Kering to assess the environmental

impacts of 1716 sites. The sites are organized as

following:

Kering

Brand A

Business unit A1

Site A1Site A1-a

Site A1-b

Business Unit A2

Site A2-a

Brand B

….

Each data point goes through four successive checks:

The IT tool automatically compares the 2014 value

versus the 2013 value – if the difference is more

than 25%, the contributor has to explain the variation

The validator 1 assesses the variation between 2014

and 2013 for all the sites within his scope (one site,

all the sites of a country, a whole Business Unit…),

and compares the values with similar sites – he is a

different person from the contributor to ensure a

higher level of reliability – if needed, he corrects or

asks the contributor to correct the data

The validator 2 performs the same kind of analysis

for all the sites at brand level

The Kering sustainability team performs the same

analysis at Kering level

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A global network of users

More than 450 people (“contributors” and “validators”)

across the world perform two roles for the sites they are

responsible for:

Input primary data for each indicator (contributors)

Carry out verification checks and validate data

(validators)

Consistent methodology and guidelines

The Sustainability Leads of each brand manage their

network of users and define along with the Kering

sustainability department the list of indicators and the

main reporting guidelines (timeline, process,

extrapolation and estimation procedures, emission

factors, breakdown of indicators by brand and type of

site…). These guidelines and the precise definition of the

indicators are compiled and distributed in the network

through the Kering reporting protocol 2014, as well as

other supporting documentation.

The recommended guidelines are as follow:

Collect invoices to gather actual data

If the data does not cover the whole period,

extrapolate the invoices data to the whole year

If no invoices can be collected, estimate the figure

based on similar sites by applying a ratio of impact

per square meter (or per turnover), or if this is not

possible by applying the ratios provided by Kering

sustainability department that are specific (per

region/type of site/division) averages of past year

Group data

To ensure that these guidelines are properly understood

and followed, the Kering sustainability department, as

well as the Sustainability leads of each brands, organize

training sessions for users and provide them with

constant support.

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Scope

Indicators to monitor our environmental impacts

The sites covered in the reporting consolidation scope

are brands and business units over which the Group

holds operational control (i.e. more than 50% stake), and

with operational control takeover since July 1st 2014 at

least. However, in the event of a disposal or loss of

operational control, the site is automatically removed

from the reporting scope regardless of the time of year

when the disposal or closure occurred. Similarly,

activities listed as “discontinued” under the IFRS

standards on 31 December 2014 are removed from the

reporting scope.

Since the 2013 reporting, Kering has managed to collect

(or estimate) the environmental impacts of 100% of the

sites within its reporting scope. Moreover, within all

these sites, no indicator data has been excluded from

the reporting scope, as missing data have been

estimated and erroneous data corrected.

This means that:

The 2014 reporting scope and reported scope of the

consolidated figures are identical

The 2013-2014 pro forma scope only excludes the

sites that were not opened in 2013 and the sites that

were closed in 2014

Hereafter are the types of sites included in the reporting

scope 2014, and the exclusions due to the reporting

methodology:

Brand Within reporting

scope

Outside

reporting scope

PUMA

All stores, offices,

industrial sites and

warehouses

Sourcing offices of less

than 10 people

Volcom All stores, offices and

warehouses

Gucci



warehouses

Bottega Veneta



warehouses

Saint Laurent



warehouses

Alexander

McQueen

All stores, offices and

warehouses

Balenciaga All stores, offices and

warehouses

Brioni



warehouses

Stella McCartney All stores, offices and

warehouses

Girard-

Perregaux/

JEANRICHARD



warehouses

Pomellato/Dodo



warehouses

Qeelin All stores and offices

Christopher

Kane All offices

Kering

Corporate All offices

Note: Sergio Rossi is not consolidated in the 2014 environmental reporting in accordance with the financial consolidation rules.

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Pro forma scopes 2013 – 2014

To ensure reliable monitoring of trends over the years,

several Group indicators are presented on a pro forma

basis in this report. This method eliminates any bias due

to changes in scope, by taking into account only the

sites that were present in two consecutive years (in this

case 2012 and 2013).

This means that the pro forma excludes:

The 2014 sites that were not present in the 2013

reporting (which automatically excludes the new

brands that joined the Kering Group in 2014)

The 2013 sites that have been closed in 2014

The data from previous years may be corrected if errors

are identified or if the reporting methodology changes.

Coverage rate of pro forma scopes 2013 - 2014:

At Group level, 80% of the 1717 sites de 2014 are

included in the pro forma figures.

% of 2014 sites included

in the pro forma scope

Boucheron 100%

% of 2014 sites included

in the pro forma scope

Sowind Group 100%

Christopher Kane 100%

Kering Corporate 96%

Stella Mc Cartney 95%

Gucci 91%

Volcom 89%

Balenciaga 89%

Bottega Veneta 88%

Yves Saint Laurent 83%

Alexander Mc Queen 83%

PUMA 76%

Brioni 74%

Qeelin 65%

Pomellato 0%

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Freight Transport

Since every brand handles its own logistics, the

transportation flows are extremely diversified. In this

document, we present the methodology used for

reporting purposes at Kering to consolidate indicators on

goods transport.

Scope covered: paid flows

The transportation flows included in the environmental

reporting correspond exclusively to all transport carried

out under the brands’ control, i.e. paid by them.

Transport is split into two categories:

“B to B” transport:

deliveries from suppliers when paid by

Kering brands, regardless of the type of site

delivered (store, warehouse, industrial site,

etc.),

flows of supply to stores by the warehouses

or between warehouses

express deliveries (since 2014, to take into

account the Groupe evolution)

“B to C” transport:

deliveries to customers,

Indicators used to report on freight streams: litres of

diesel fuel, tonne.km and TEU.km

“B to B” units of measurement:

Road, rail, river or air freight: tonne.kilometer

(t.km). This unit corresponds to the total sum of

the distance travelled multiplied by the tonnage

transported. The weight used is the actual

weight of products when available or the taxable

weight otherwise.

Express deliveries: tonne.kilometer (t.km).

These deliveries correspond to the quick

transportation of small quantities of goods.

They include road and air transportation.

Express deliveries are made by service

providers and the CO2 emissions are

calculated based on the t.km data the

service providers provide to us (to Kering

headquarters directly).

Maritime shipping: TEU.kilometer (TEU.km;

TEU = Twenty-foot Equivalent Unit). This

unit corresponds to the total sum of the

distance travelled multiplied by the total

volume transported. A TEU represents an

estimation of the volume transported by a

20-foot cargo.

“B to C” units of measurement:

Deliveries to customers: litre of fuel (L). This

B to C flow covers deliveries of finished

products directly to clients from logistics

platforms or points of sale. Deliveries to

customer are made by the brands’ own (or

subcontracted) vehicles and the CO2

emissions are calculated based on the fuel

consumption consumed.

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Logistical flow patterns of brands (examples for the

Luxury and Sport division)

PUMA

The range of transportation modes used by Puma is the

most comprehensive of all Kering brands: road, rail,

maritime and air freight.

The diagram below details the Puma logistical system as

considered for reporting purposes:

Gucci

The diagram below details the Gucci logistical system as

considered for reporting purposes:

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Emissions Factors

CO2 emissions from transport

Emission factors are used to calculate and transcribe a

physical flow into its environmental impact (i.e. the

amount of CO2 release in the atmosphere). In the case

of transport indicators, the purpose is to estimate the

CO2 emissions related to logistical flows.

The emission factors considered by Kering include CO2

emissions originating from the “upstream” fuel phase (i.e.

during production and transport of fuels), even if the

Group doesn’t have direct control over such emissions,

in order to be consistent with the EP&L methodology

(the EP&L is described in the sustainability chapter of

the Kering Reference Document).

Road freight

Our brands carry textile products and leather goods

which are considered as light goods. It thus appears

relevant to use a truckload fill rate of 30%, an empty load

back-trip rate of 10% and an average consumption of

loaded truck of 35L/100km, which are the specific

assumptions given for light goods by the Institute for

Energy and Environmental Research of Heidelberg

(IFEU).

Moreover, we added to these figures a scope 3

coefficient to take into account the quantity of

greenhouse gases emitted during the extraction, refining

and transport of the fuel. This coefficient is evaluated

based on a LCA (Life Cycle Analysis) approach.

Using these assumptions, we calculated the 2013-2014

emission factors for road freight:

Type of Transport Value Unit

Road – unknown type of

truck 154.03 g CO2 / t.km

Road – Truck Euro V or VI 154.03 g CO2 / t.km

Road – Natural gas truck 154.03 g CO2 / t.km

Road – Electric trucks

(the value changes for each

country)

Min. 3.0

Max.166.8 g CO2 / t.km

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Sea freight

BSR’s « clean cargo working group » is the source

followed by Kering for emission factors. Indeed Kering’s

main sea transportation provider was part and even a

leading actor of this group.






The 2013-2014 sea freight emission factors are:


Sea - Asia – Asia 89.9 g CO2 / TEU.km

Sea - Europe – Asia 79.2 g CO2 / TEU.km

Sea - North America –

Asia 92.2 g CO2 / TEU.km

Sea - Europe – North

America 100.5 g CO2 / TEU.km

Sea - Europe – Europe 86.3 g CO2 / TEU.km

Sea - Europe – South

America 102.9 g CO2 / TEU.km

Sea - Europe – Africa 105.2 g CO2 / TEU.km

Sea - North America –

South America 100.5 g CO2 / TEU.km

Sea – South America –

Asia 95.8 g CO2 / TEU.km

Sea – Intra-Americas 120.6 g CO2 / TEU.km

Air freight

The British Department for Environment, Food and Rural

Affairs (DEFRA) publishes figures that take into account

the carrying of light goods in commercial flights, which is

a growing practice in the Group. Therefore this source

has been chosen by Kering.






The 2013-2014 air freight emission factors are:

TYPE OF TRANSPORT Value Unit

Air - short/medium-haul 1 601.7

g CO2 / t.km

Air - long-haul 666.6

g CO2 / t.km

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Rail freight

A major part of our rail transportation is done in the US,

Germany and in Canada, where the energy mixes for

electricity vary, so as the percentage of fuel or electrical

locomotives. Different sources are thus used to obtain

the most accurate emission factors in 2013.






The 2013-2014 rail freight emission factors are:

TYPE OF

TRANSPORT Value Unit Source

Rail - Denmark

44.6 g CO2 / t.km

ADEME –

INFRAS

Rail - France

20.7 g CO2 / t.km

Rail - Germany

37.8 g CO2 / t.km

Rail - Italy

34.4 g CO2 / t.km

Rail - Norway

9.7 g CO2 / t.km

Rail - Spain

40.8 g CO2 / t.km

Rail - Sweden

5.0 g CO2 / t.km

Rail - Switzerland

4.3 g CO2 / t.km

Rail - UK

48.8 g CO2 / t.km

Rail - Canada

18.9 g CO2 / t.km GHG

Protocol

Rail - US

20.1 g CO2 / t.km

Rail – Other

European

countries

26.8 g CO2 / t.km

ADEME

Rail - Other

20.1 g CO2 / t.km

GHG

Protocol

B to C Transportation

The emission factors used for B to C transportation are

the same as for B to B. However for some sites, the

brands have directly the fuel consumption of their fleet,

or the one of their transport suppliers. In that case the

emission factor used is the one of the French Base

Carbone:






TYPE OF

TRANSPORT

Value

scope 1 Value

scope 3

Value

scope

1 + 3

Unit

Diesel

consumption 2.518 0.348 2.866 kg CO2 / l

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Company cars

The brands report in priority their diesel or gasoline

consumption. When this information was not available,

the contributors could report the average emission factor

of their fleet (given by their leasing supplier or car maker)

together with the distance done.






Type of

Transport

Value

scope 1

Value

scope 3

Value

scope

1 + 3

Unit

Diesel

consumption 2.518 0.347 2.866

T

CO2e/m3

Gasoline

consumption 2.26 0.31 2.57

T

CO2e/m3

Air travel

Finally the CO2 emission factors for air travel are the

one of French Base Carbone. Moreover, we added to

these figures a scope 3 coefficient to take into account

the quantity of greenhouse gases emitted during the

extraction, refining and transport of the fuel. This

coefficient is evaluated based on a LCA (Life Cycle

Analysis) approach.


Air travel 127.2 g CO2 /passenger.km

Energy related CO2 emissions

The CO2 emission factors related to the consumption of

energy are obtained through the French Base Carbone.

The emission factors used to calculate the emissions of

greenhouse gases linked to the production of the

electricity consumed by Kering are specific to the

countries where the sites of Kering are located. In an

effort to match numbers with the reality of the different

types of energy mix in the various countries and regions

of Group operations, Kering used emission factors

specific to each of its countries and regions of operation.

These factors were extracted from the regularly updated

data bases published by the International Energy

Agency (IEA).


coefficient to take into account the extraction of the

energy, line losses, transport and nuclear waste

treatment, evaluated based on a LCA approach.

Type of

Energy

Value

scope

1

Value

scope

2

Value

scope

3

Value

scope

1,2,3

Unit

steam - 191.0 34.9 225.9

g CO2 /

kWh

heavy fuel 266.4 - 45.4 311.8

g CO2 /

kWh

light fuel 262.1 - 35.1 297.2

g CO2 /

kWh

natural gas 192.0 - 38.1 230.1

g CO2 /

kWh

Solar

electricity

(for onsite

production)

- - 18.0 18.0 g CO2 /

kWh

LPG 295.7 - 50.4 346.1

g CO2 /

kWh

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ELECTRICITY EMISSION FACTORS

Value scope 2 (conventional

electricity)


electricity)

Total value conventional

electricity (scope 2+3)

Value green

electricity (scope 3

only)

Unit

Argentina 403.91 137.68 541.59 20.42 g CO2 / kWh

Aruba 573.31 163.55 736.86 18 g CO2 / kWh

Australia 859.15 235.19 1 094.34 15.96 g CO2 / kWh

Austria 191.49 51.48 242.97 18.48 g CO2 / kWh

Bangladesh 531.17 133.09 664.27 21.8 g CO2 / kWh

Belgium 169.69 32.4 202.09 8.2 g CO2 / kWh

Brazil 72.71 44.95 117.66 20.15 g CO2 / kWh

Bulgaria 573.31 163.55 736.86 18.14 g CO2 / kWh

Cambodia 573.31 163.55 736.86 16.58 g CO2 / kWh

Canada 168.61 45.68 214.29 20.66 g CO2 / kWh

Chile 573.31 163.55 736.86 18 g CO2 / kWh

China 872.99 241.71 1 114.70 18.87 g CO2 / kWh

Croatia 573.31 163.55 736.86 18 g CO2 / kWh

Czech Republic 640.18 146.92 787.1 20.57 g CO2 / kWh

Denmark 410.03 288.24 698.27 0.08 g CO2 / kWh

El Salvador 573.31 163.55 736.86 18 g CO2 / kWh

Finland 251.97 46.13 298.1 11.14 g CO2 / kWh

France 53.69 15.76 69.44 16.48 g CO2 / kWh



electricity)


electricity)



Value green


only)

Unit

Georgia 573.31 163.55 736.86 18 g CO2 / kWh

Germany 489.16 148.45 637.62 10.75 g CO2 / kWh

Greece 702.74 213.51 916.25 14.44 g CO2 / kWh

Guam 573.31 163.55 736.86 18 g CO2 / kWh

Hong Kong 882.46 327.19 1 209.65 0.01 g CO2 / kWh

Hungary 366.99 102.26 469.25 1.72 g CO2 / kWh

India 944.79 540.08 1 484.87 15.57 g CO2 / kWh

Indonesia 573.31 163.55 736.86 21.46 g CO2 / kWh

Ireland 473.54 215.63 689.17 2.85 g CO2 / kWh

Italy 388.31 101.03 489.34 22.13 g CO2 / kWh

Japan 485.68 82.19 567.87 16.27 g CO2 / kWh

Kuwait 573.31 163.55 736.86 18 g CO2 / kWh

Lithuania 573.31 163.55 736.86 18 g CO2 / kWh

Luxembourg 573.31 163.55 736.86 18.83 g CO2 / kWh

Macau 573.31 163.55 736.86 18 g CO2 / kWh

Malaysia 770.84 188.43 959.27 18.52 g CO2 / kWh

Mexico 492.12 183.9 676.03 19.58 g CO2 / kWh

Montenegro 573.31 163.55 736.86 18 g CO2 / kWh

Netherlands 466.94 104.76 571.71 0.44 g CO2 / kWh

New Zealand 132.31 42.26 174.57 19.78 g CO2 / kWh

Norway 0.96 21.34 22.29 21.49 g CO2 / kWh

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Pakistan 573.31 163.55 736.86 21.8 g CO2 / kWh

Peru 573.31 163.55 736.86 18 g CO2 / kWh

Philippines 573.31 163.55 736.86 18 g CO2 / kWh

Poland 878.23 256.63 1 134.86 4.35 g CO2 / kWh

Portugal 311.99 157.48 469.47 11.2 g CO2 / kWh

Puerto Rico 573.31 163.55 736.86 18 g CO2 / kWh

Qatar 573.31 163.55 736.86 18 g CO2 / kWh

Romania 573.31 163.55 736.86 18 g CO2 / kWh

Russia 500.05 129.16 629.21 21.44 g CO2 / kWh

Serbia 573.31 163.55 736.86 21.8 g CO2 / kWh

Singapore 540.18 108.52 648.7 0.24 g CO2 / kWh

Slovakia 573.31 163.55 736.86 20.36 g CO2 / kWh

Slovenia 573.31 163.55 736.86 18 g CO2 / kWh

South Africa 573.31 163.55 736.86 18 g CO2 / kWh

South Korea 532.1 100.09 632.19 19.16 g CO2 / kWh

Spain 301.69 141.46 443.15 12.09 g CO2 / kWh

Sweden 15.57 16.09 31.66 16.96 g CO2 / kWh

Switzerland 9.52 15.01 24.53 20.37 g CO2 / kWh

Taiwan 673.87 143.98 817.85 12.79 g CO2 / kWh



electricity)


electricity)



Value green


only)

Unit

Turkey 462.77 165.66 628.43 19.83 g CO2 / kWh

Ukrain 573.31 163.55 736.86 21.44 g CO2 / kWh

United Arab Emirates 573.31 163.55 736.86 18 g CO2 / kWh

United Kingdom 444.83 124.26 569.09 5.16 g CO2 / kWh

United States of America 542.76 138.68 681.44 14.15 g CO2 / kWh

Uruguay 573.31 163.55 736.86 18 g CO2 / kWh

Vietnam 526.01 433.26 959.27 21.7 g CO2 / kWh

Precisions on the Group’s pro forma year-on-

year change in CO2 emissions

In order to have a comparable basis for the pro

forma variation, the emission factors in 2014 are

the same than in 2013.

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External verification by

statutory auditors

For the eighth year in a row, the extra-financial data

published in the Reference document were verified by

one of the statutory auditors, Deloitte & Associés.

Pursuant to Article L.225-102-1 of the French

Commercial Code, Kering has appointed one of its

Statutory Auditors as independent third party responsible

for the verification of the information published in

Chapter 3 of the 2014 reference document. The report

by the Statutory Auditor published page 113 of the 2014

reference document concerns the presence and the

fairly presentation of the qualitative and quantitative

published environmental, social and societal information.

In accordance with professional auditing standards

applicable in France, with the order of May 13, 2013

determining the methodology according to which the

independent third party entity conducts its assignment,

Deloitte & Associés’ work has consisted to:

verify data-collection processing and control

procedure to ensure the completeness and

consistency of the CSR Information;

perform analytical procedures on the quantitative

information and verified, using sampling techniques,

the calculations and the data consolidation;

consult the documentary sources and conduct

interviews to corroborate the qualitative information

(organization, policies, actions);

verify the consistency of the CSR Information

presented in the management report.

The report issued by our Statutory Auditors can be found

in page 122 to 124 of Kering 2014 Reference document.

CONTACT

[email protected]

mailto:[email protected]

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