METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT
2020
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METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
ORGANISATION OF KERING 2020 ENVIRONMENTAL REPORTING
To manage its environmental performance as closely as possible to operational sites, Kering wants its environmental reporting to cover all its activities throughout the world and therefore favors the collection of real data from 1,764 sites. Nevertheless, the Group allows itself the possibility of estimating certain data according to the methodologies defined in its reporting protocol. To reliably monitor changes in one year compared with the others, several of the Group's indicators are presented in this report on a pro forma basis. This method makes it possible to avoid changes in the scope of consolidation, by only considering sites present for three consecutive years. In order to improve the distribution of methodological support to each reporting stakeholder, a group has been created on the corporate social network allowing everyone to easily access the various contents but also to ask questions or exchange views on good environmental reporting practices.
Indicators used to monitor our environmental impacts Kering has monitored the main environmental impacts of its business activities since 2014. 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, …) – this enables ratios calculation In this document, CO2 stands for CO2e for simplification.
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 extra-financial data. This IT tool is designed to allocate indicators according to site and brand specificities (Warehouses, Stores, Industrial sites and Offices). The reporting is done at site level (each physical site), which allows Kering to assess the environmental impacts of 1,764 sites. The sites are organized as follows : • KERING Group (Niveau 1) o Brand : Balenciaga (Niveau 2) ▪ Business Unit : Balenciaga Europe (Niveau 3) • Sites : bureaux, boutiques, entrepôts et sites industriels (Niveau 4) ▪ Business Unit : Balenciaga Asia (Niveau 3) • Sites : bureaux, boutiques, entrepôts et sites industriels (Niveau 4) o Brand : Brioni (Niveau 2) ▪ Business Unit : Brioni US (Niveau 3) • Sites : bureaux, boutiques, entrepôts et sites industriels (Niveau 4) ▪ Business Unit : Brioni Italy (Niveau 3) • Sites : bureaux, boutiques, entrepôts et sites industriels (Niveau 4)
Each data point goes through four successive checks: • The IT tool automatically compares the 2019 value versus the 2018 value – if the difference is more than 20%, the contributor has to explain the variation in order to submit the data; • The validator 1 assesses the variation between 2018 and 2019 for all the sites within his or her scope and compares the values with similar sites taking into account the percentage that a site’s data represents on the total; if needed, he or she corrects the data 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 Group level.
A global network of users More than 300 people (“contributors” and “validators”) across the world perform two roles for the sites they 2
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
are responsible for: • Inputting primary data for each indicator (contributors) • Conducting verification checks and validate data (validators)
Consistent methodology and precise 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 to the users’ network through the 2020 Kering reporting protocol, as well as other supporting documentation. The guidelines recommend that contributors: • Collect invoices, weighing tickets or slips, IT systems extractions, meter readings to gather actual data; • If the data does not cover the whole period, extrapolate the invoices data to the whole year; • If no actual data 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 averages (per region/type of site/division) of past three years Group data.
To ensure that these guidelines are properly understood and followed, the Kering sustainability department, as well as the Sustainability leads of each brand, organize training sessions for users and provide them with constant support.
2020 REPORTING SCOPE
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 2020 at the latest. 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 2020 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 2020 reporting scope and reported scope of consolidated figures are identical • The 2018-2020 pro forma scope only excludes the sites that were not opened in 2018 or 2019 and 3
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
the sites that closed in 2019 or 2020.
Hereafter are the types of sites included in the 2020 reporting scope, and the exclusions due to the reporting methodology:
Marque Within reporting scope Outside of scope Offices with less than 10 Gucci All stores, offices, industrial sites and warehouses people Offices with less than 10 Saint Laurent All stores, offices, industrial sites and warehouses people Offices with less than 10 Bottega Veneta All stores, offices, industrial sites and warehouses people Offices with less than 10 Balenciaga All stores, offices, industrial sites and warehouses people Offices with less than 10 Alexander McQueen All stores, offices and warehouses people Offices with less than 10 Brioni All stores, offices, industrial sites and warehouses people Offices with less than 10 Boucheron All offices, warehouses and industrial sites people Offices with less than 10 Pomellato/Dodo All stores, offices, industrial sites and warehouses people Offices with less than 10 Qeelin All stores and offices people Offices with less than 10 Ulysse Nardin All stores, offices, industrial sites and warehouses people Offices with less than 10 Girard-Perregaux All offices, warehouses and industrial sites people Offices with less than 10 Kering Eyewear All offices, warehouses and industrial sites people Kering Corporate Within reporting scope Outside of scope Note: Richard Ginori are not consolidated in the 2020 environmental reporting in accordance with the financial consolidation rules.
Pro forma scope 2018 – 2020 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 open during three consecutive years (in this case 2018, 2019 and 2020). This means that the pro forma excludes: • The 2020 sites that were not present in the 2018 or 2019 reporting (which automatically excludes the new brands that joined the Kering Group in 2019 or 2020); • The 2018 or 2019 sites that have been closed in 2020 (which automatically excludes the brands that left the Group in 2018 or 2019). Coverage rate of pro forma 2018-2020 At group level, 80% of the 1 764 sites open in 2020 are included in the pro froma figures.
% of 2020 sites included in the pro forma scope Alexander Mc Queen 62% Balenciaga 64% Bottega Veneta 88% Boucheron 89% Brioni 98% Girard Perregaux 100% Gucci 88% Kering Corporate 59% Kering Eyewear 79% Pomellato 76%
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Qeelin 77% Saint Laurent 75% Ulysse Nardin 64% Total général 80% Recalculation of 2018 and 2019 indicators for proforma comparison purposes with 2020 data
Recalculation of 2018 and 2019 indicators to allow pro forma comparison with 2020 indicators considers several parameters: perimeter variations and methodological improvements. In 2017, an analytical review has been conducted to target the major evolution of the emission factors. In 2018, some emission factors have been updated for the transportation (especially sea transport, air transport and rail transport). In 2019, calculation methodology of business travel has been updated, and several emission factors as well (noteworthy road, fluvial and, partially, rail transportation).
Hereunder the detailed methodology of pro forma data recalculation for each indicator group: Méthodology pro forma Energy(MWh) Pro forma on sites perimeter Energy (CO2) Pro forma on sites perimeter BtoB Transport Recalculation of 2018 and 2019 emissions with 2020 emission factors Pro forma on brands perimeter No pro forma on geographical perimeter (new transportation sections covered by carriers’ reportings) Express Transport Recalculation of 2018 and 2019 emissions with 2020 emission factors Pro forma on brands perimeter No pro forma on geographical perimeter (new transportation sections covered by carriers’ reportings) Business travel Recalculation of 2018 and 2019 data with 2020 methodology Pro forma on travel agencies coverage Packaging Pro forma on brand perimeter Water Pro forma on site perimeter Paper Pro forma on site perimeter Waste Pro forma on site perimeter
WATER The percentage of industrial water discharged is calculated on the basis of the sites reporting industrial water consumption (mandatory indicator) and the amount of water discharged. As some industrial sites do not have access to the exact quantity of water discharged, they are not taken into account in the calculation of the percentage of industrial water discharged by taking into account that these industrial sites discharge what is taken.
PACKAGING Packaging data collection is broken down by type of material. Collected data include primary and industrial packaging (used for goods transportation between industrial sites, warehouses and stores) as well as end packaging which goes to the customer. It must be noted that packaging quantities reported in 2019 cover a wider variety of materials. Reporting indicators have been created for wood, metal and textile used for packaging purposes. In 2018, only one new sub-category has been introduced (bioplastic). In 2019, distinction between Industrial and Client packaging has been made for most packaging materials. Moreover, three new materials have been introduced (linen, iron and other metals). In 2020, the notion of single-use plastic and reusable plastic was introduced in the reporting.
CONSUMPTION OF RAW MATERIALS In this section, we present Kering’s methodology to assess the estimated circularity performance of 5
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
its raw materials consumption through the calculation of the Kering Materials Circularity Index. This methodology will be refined in the following years.
Raw material consumption data collection is performed through EP&L methodology and broken down in material categories (Animal Fibers, Cellulose based Fibers, Plant Fibers, Leather, Precious skin, Metal, etc.). Each category includes the different types of materials (e.g. alpaca as part of the animal fibers category) that are sourced by the brands. Each material is analysed through whether: a) a circular sourcing 1 option exists for this material: for instance, animal fibers category has circular sourcing option, as cashmere or wool, which are part of this category, have regenerated options ; b) or no circular sourcing option exists: for example, natural stones category is considered as not having circular sourcing option ; c) or this category is not relevant to the Kering Materials Circularity Index in the case they do not have circular option as such, but present alternative benefits, such as viscose Canopy certified viscose, or restorative grazing wool. For each material that falls into a category identified with a circular sourcing option (a), the material is assessed as either circular (for instance, regenerated cashmere) or not (for instance, conventional cashmere). As a result, by mapping this raw material list to the corresponding volumes of raw materials used by the Group, the Kering Materials Circularity Index is calculated as, in percent: volume of circular materials / volume of materials that fall into a category identified with a circular sourcing option.
Freight transport In this document, we present Kering’s reporting methodology to consolidate goods transportation indicators.
The emission factors used are taken from internationally recognised public information sources of an academic or institutional nature and have been updated in 2016 based on new publications. However, a monitoring exercise is carried out each year and the emission factors are updated if the variation from one year to the next is significant. These emission factors are also aligned with those used for EP&L. All the methods used are available in the methodological note on Kering's environmental reporting, on the Group's website. Work was initiated in 2016 on the methodology for calculating CO2 emissions related to "B to B" transport to better reflect the improvements and optimisations implemented by the Group's brands and logistics platforms. This process was continued in 2020 to include all "B to B" transporters. This allows them to use their CO2 emissions reporting to more accurately reflect the emissions linked to the various transport flows. Each supplier carbon report is scrupulously analysed in accordance with the European standard EN16258 to guarantee the consistency of the Group's reporting. Particular attention is paid to ensuring that the upstream Scope 3 (well-to-wheel) emission factors are properly considered.
Covered scope: 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. Transportation flows paid by customers, especially for jewellery and watches brands, are not part of the reporting scope because they are outside Kering operational control. In order to make things clearer, transportation was split in two categories for data collection: • “B to B” transport: o deliveries from suppliers when paid by Kering brands, regardless of the type of site delivered (store, warehouse, industrial site, etc.); o flows of supply to stores by the warehouses or between warehouses; o express deliveries. • “B to C” transport: • deliveries to customers.
1 Circular sourcing is defined as a sourcing that does not use virgin raw material but raw material that has been used previously. 6
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
It must be noted that the perimeter covered by the reporting does not include transportation of skins between tanneries and manufacturers. Those transportation flows account for a very negligible part of CO₂ emissions compared to the Group’s total CO₂ emissions.
Indicators used to report on freight streams: litres of diesel fuel, tonne.km and TEU.km • “B to B” units of measurement: o Road, rail, river, air freight and express transport: 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. Those transportation flows are handled by carriers and their CO₂ emissions are calculated on the basis of t.km data provided by the carriers. o Sea freight: 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: o Deliveries to customers: litre of fuel (L). The B to C flows cover deliveries of finished products directly to clients from logistics platforms or sales points. Deliveries to customers are made by the brands’ own (or subcontracted) vehicles and the CO₂ emissions are calculated based on the fuel consumption.
It must be noted that real distances are preferred and used whenever possible. Calculation of goods transportation distances is consistent between brands thanks to a common automatic calculation tool based on departure and arrival towns.
Co₂ emissions linked to transportation: calculation methods Use of carriers’ data compliant with EN-16258 In some instances, carriers are able to provide precise annual reporting of CO₂ emissions and activity data (tons.km) linked to the shipments they handled, with any kind of transportation. These CO₂ emissions are calculated according to the EN-16258 standard and are automatically communicated to the logistics managers in charge. When carriers are able to provide those figures, their data is used as a source for the annual reporting.
Use of emission factors (other carriers) Emission factors are used to calculate and transcribe a physical flow into its environmental impact (i.e. the amount of CO₂ released 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 extraction, 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 (Environmental Profit & Loss account) methodology (the EP&L is described in the sustainability chapter of the Kering Reference Document).
HEAT ENGINE ROAD FREIGHT
Our brands mainly carry textile products and leather goods which are considered as light goods. This leads Kering to use a truck-filling rate of 30%, a maximum load of 25 tons and an empty load back-trip rate of 10%. These assumptions come from the Institute for Energy and Environmental Research of Heidelberg (IFEU)2 for voluminous goods (high volume for a low weight). According to
2 Ecological Transport Information Tool for Worldwide Transports; Methodology and Data; Updated 4th December 2014 7
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
the Bilan Carbone® V18.13, these assumptions lead to an average fuel consumption for a loaded truck of 32.6L/100km and for an empty truck 28.83L/100km. Moreover, the emission factor include a “scope 3 coefficient” in order to take into account the quantity of greenhouse gases emitted during the extraction, refining and transportation phases of the fuel. This coefficient comes from the Bilan Carbone® V18.1.
Final road emission factor for 2020, 164.27 gCO2/t.km, covers a WTW (well-to-wheel) scope including upstream activities (extraction, refinery and transportation).
ELECTRICAL ENGINE READ TRANSPORT
Selected emission factors depend on the energy consumption of electrical trucks in kWh/t.km. Selected assumptions are as follows: Source / explanation Maximum load 16 T Urban delivery Filling rate 43 % Emission factors guide V6.1 Average consumption CE Delft study on electric 1 kWh/km truck4 Empty load back-trip 18 % Emission factors guide V6.1 Associated emission factor 0.177 kWh/t.km
The emission factor in gCO₂/t.km depends on the country emission factor (see section « Electricity and renewable energy »). Type of transport Value WtW Unit Road – unknown type of truck 164.27 gCO / t.km 2 Road – Truck Euro V or VI 164.27 gCO2 / t.km
Road – Natural gas truck 164.27 gCO2 / t.km Road – Electric trucks Min. 3.7 gCO / t.km Max.252.3 2
SEA FREIGHT
The BSR’s (Business for Social Responsibility) « clean cargo working group (CCWG)5 » 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. Moreover, the emission factor includes a “scope 3 coefficient” in order to take into account the quantity of greenhouse gases emitted during the extraction, refining and transportation phases of the fuel. This 1.088 coefficient comes from BSR/CCWG’s methodological recommendations presented in June 2015 report.
The final WTW emission factors used in 2020 are as follows:
Maritime Route Emission factor Unit Source
South East Asia – North East Asia 62,7 g CO2 / evp.km Clean Cargo North East Asia – North East Asia 62,7 g CO2 / evp.km Working Group South East Asia – South East Asia 70,6 g CO / evp.km 2 (CCWG), Europe – Asia 29 g CO / evp.km 2 2019Progress North America– Asia 45,9 g CO / evp.km 2 Report - BSR, Africa – Asia 51,2 g CO / evp.km 2 2019 Global Europe – North America 58,5 g CO2 / evp.km Maritime Trade Europe – Europe 87,5 g CO2 / evp.km
3 The Bilan Carbone methodology was created by ADEME, the Environmental French Agency. Bilan Carbone® brand is now managed by ABC (Association Bilan Carbone) http://www.associationbilancarbone.fr 4 http://www.cedelft.eu/?go=home.downloadPub&id=1399&file=CE_Delft_4841_Zero_emissions_trucks_Def.pdf 5 BSR | CCWG: Global Maritime Trade Lane Emissions Factors (August 2014); BSR | CCWG C02 Emissions Accounting Methodology Report, June 2015 8
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
Europe – South America 46,1 g CO2 / evp.km Lane Emission Europe – Africa 68,9 g CO2 / evp.km Factors Europe – Oceania 54,9 g CO2 / evp.km North America – South America 56,1 g CO2 / evp.km South America – Asia 41,7 g CO2 / evp.km North America (internal) 97,2 g CO2 / evp.km South America (internal) 71,2 g CO2 / evp.km
AIR FREIGHT
Emission factors selected for air freight come from the Base Carbone ® v18.1 and v16.1 ADEME to ensure sources consistency with other emission factors. Those factors are used in the French methodological reference « Information on CO₂ from transportation services » which is consistent with the EN-16258 standard6. Moreover, the emission factors from the Base Carbone® v18.1 of l’ADEME include a “scope 3 coefficient” in order to take into account the quantity of greenhouse gases emitted during the extraction, refining and transportation phases of the fuel.
Emission Unit Source factor
Very short haul (less than 500kms) 2094 g CO2 / t.km Short-haul (between 500 and 1000 kms) 1604 g CO2 / t.km ADEME, Bilan Medium-haul (between 1000 and 3500 kms) 1154 g CO2 / t.km Carbone v18.1
Long-haul (more than 3500 km) 794 g CO2 / t.km
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, and so does the percentage of fuel or electrical locomotives. Therefore, different sources are used to obtain the most accurate emission factors for 2020. Exceptionally, those factors only include tank-to-wheel (TTW) emissions, and do not consider upstream emissions. The rationales for this assumption are as follows: - Rail freight emissions only account for about 0.5% of Kering total freight emissions; - Upstream emissions are not easily calculated for each rail network because of the variety of traction modes and power supply modes according to the countries.
Selected emission factors for 2020 rail freight are: Emission factor Unit Source
Denmark 37,8 g CO2 / t.km
France 5,6 g CO2 / t.km
Germany 32,0 g CO2 / t.km
Italy 29,1 g CO2 / t.km ADEME, Base Carbone v18.1 Norway 8,2 g CO2 / t.km
Spain 34,5 g CO2 / t.km
Sweden 4,3 g CO2 / t.km
Switzerland 3,6 g CO2 / t.km
United Kingdom 25,6 g CO2 / t.km DEFRA, Conversion factors 2020, v.01-00 Canadien National (CN) - Compagnie des Canada 15,2 g CO / t.km 2 chemins de fer nationaux du Canada US EPA - Department of Transportation USA 13,2 g CO2 / t.km (DOT) - Emission Factors for Greenhouse Gas Inventories - March 2020 Other European 22,6 g CO / t.km ADEME, Base Carbone v18.1 countries 2
6 CO₂ information related to transport services – Report on the scheme implementation – 14/12/2015, p. 16 9
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US EPA - Department of Transportation Rest of the world 13,2 g CO2 / t.km (DOT) - Emission Factors for Greenhouse Gas Inventories - March 2020
TRANSPORT B TO C
The emission factors used for B to C transportation are the same as for B to B. However the brands report the fuel consumption of their vehicle fleet or their service provider’s fleet. In that case the emission factor used is the one of the Base Carbone® v16.1 of Ademe (updated on September 2019).
Value scope 1 TYPE OF TRANSPORT Value scope 1 Value scope 3 Unit + 3 Diesel consumption 2.51 0.66 3.16 kg CO₂ / L
COMPANY CARS
The brands report in priority their diesel or gasoline consumption. When this information is not available, the contributors can report the average emission factor of their fleet (given by their leasing supplier or carmaker) together with the distance travelled by the fleet. Emission factors used in this case are the ones provided by the Base Carbone® v16.1 of Ademe (updated on September 2019). The upstream emission factor comes from the same source.
Value scope 3 Value scope TYPE OF TRANSPORT Value scope 1 Unit 1 + 3 Consommation de diesel 2.51 0.66 3.16 kg CO₂/ L Consommation d’essence 2.28 0.53 2.80 kg CO₂/L
BUSINESS TRAVEL
The CO2 emission factors for business travel are obtained in 2020 directly from travel providers to have a finer follow-up of professional transport (actual distance, class reserved, etc.). The CO2 values provided in the air reports are based on the guidelines produced by DEFRA's GHG conversion factors. This method evaluates flights according to the location of the airports and calculates emissions according to the actual distance flown. Total carbon dioxide equivalent emissions (CO2e kg) include carbon dioxide, methane (CH4) and nitrous oxide (N2O), converted to carbon dioxide equivalents. Emissions related to the radiative forcing are not considered. The following criteria are considered in the calculation: - The method evaluates flights based on airport locations and calculates emissions based upon the actual distance flown - Class of flight7. The available class type are : o Economy o Premium Economy o Business o First o Unknown class - Flight type8 Class flight Value WtW Unit
Domestic All class 129.2 g CO2/passager.km
Short-haul All class 82.23 g CO2/passager.km
Short-haul Economy 80.88 g CO2/passager.km
Short-haul Business 121.32 g CO2/passager.km
7 For shorter flights class is not applicable 8 Short-haul < 3,700km Long-haul > 3,700 km 10
METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
Long-haul All class 100.9 g CO2/passager.km
Long-haul Economie 77.27 g CO2/passager.km
Long-haul Premium Economy 123.63 g CO2/passager.km
Long-haul Business 224.08 g CO2/passager.km
Long-haul First 309.08 g CO2/passager.km energy related to CO2 emissions FUELS
The CO₂ emission factors related to the consumption of energy come from the Base Carbone® v11.4 of ADEME (updated on August 5th 2016). The emission factors for liquid, gaseous and solid fuels are composed of a combustion phase and an upstream phase.
Value scope 1 Value scope Value scope Value scope TYPE D’ENERGIE Unit 2 3 1+2+3 Heavy fuel 279.81 - 45.28 325.09 g CO₂ / kWh Light fuel 265.89 - 57.95 323.84 g CO₂ / kWh Natural gas 204.93 - 38.90 243.83 g CO₂ / kWh Solar electricity (for - - 55 55.00 g CO₂ / kWh onsite production) LPG 232.72 - 39 271.72 g CO₂ / kWh Coal (Lignite)9 364 - 32 396 g CO₂ / kWh
PURCHASED ENERGY (STEAM, ELECTRICITY)
Steam The selected emission factor for Scope 2 emissions linked to steam comes from the Base Carbone® v11.4 of Ademe (updated on August 5th 2016). A 10% line losses coefficient was applied. For scope 3 (upstream of fuels to produce steam), a conservative assumption was made. Upstream Scope 3 associated with fuels used to generate steam (natural gas, coal, etc.) comes from the Base Carbone® v11.4 of Ademe (updated on August 5th 2016)10 and is a percentage of emissions due to combustion. Therefore, the highest percentage presented in the Base Carbone® v11.4 of Ademe (updated on August 5th 2016) was selected, i.e. the percentage linked to natural gas combustion11 (18.1%).
Value Scope Value Scope Value Scope Value scope ENERGY TYPE Unit 1 2 3 1+2+3 Steam - 182.4 33 215,4 g CO₂ / kWh
Electricity and renewable electricity Since 2014, the monitoring of energy consumption in shops has been reinforced thanks to the NUS energy bill management system. This system enables monthly computerised monitoring of consumption, directly integrated into the environmental reporting tool, thus limiting the risk of data entry errors, the use of estimates and making it possible to react in the event of deviations from targets. In 2020, the service was extended to water management and district heating and cooling. By the end of 2020, 608 sites are connected to the NUS monitoring system. On this basis, Kering
9 None of the Kering sites uses coal. However, an emission factor was defined, in particular for environmental assessment in the supply chain. In order to make a conservative assumption, emission factor from lignite was chosen as an average value for the different coal types. 10 http://www.bilansges.ademe.fr/static/documents/[Base%20Carbone]%20Documentation%20g%C3%A9n%C3%A9rale%20 v11.0.pdf 11 P. 44 of Documentation on emission factors of Base Carbone® v11.4 by ADEME, the Environmental French Agency (updated on August 5th 2016).
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has set up a tool for classifying its shops on the basis of their energy performance, thus enabling brands to easily identify the most energy-intensive sites and to target these sites as a priority when deploying energy efficiency solutions.
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. 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. Energy mixes used by Kering come from the International Energy Agency (IEA) databases, which are regularly updated. Emission factors related to Scope 2 (i.e. emissions linked to combustion during the electricity production) and Scope 3 (i.e. emissions linked to extraction, refinery and transportation of fuel as well as emissions linked to the construction of energy generation units for renewable energy and nuclear energy) are evaluated based on an LCA approach (Life Cycle Analysis). It should also be noted that the consumption of refrigerating energy (district refrigeration system / chilled water network - which represents 0.4% of total energy) is accounted for and consolidated under total net electricity, by approximation in order to have an emission factor per country (and therefore overestimated).
Purchase of green certificates
For many years now, Kering has favored the signing of purchase contracts for locally produced green electricity when the site pays its bills directly and when the local electricity market allows it. For geographical locations where this practice is not possible, Kering uses certificates (Energy Attribute Certificates). Furthermore, to accelerate the energy transition in the countries where Kering operates, Kering only acquires certificates for new or recent (less than 10 years) installations of photovoltaic or wind power production systems. Thus, since 2019, the Group has completed the purchase of green certificates for various countries to cover 100% of electricity consumption. The breakdown of certificates for 2020 is as follows: - RECs (Renewable Energy Certificates): Australia, Canada, the United States, Guam, New Zealand and Puerto Rico; - iRECs (International Renewable Energy Certificates): Africa, Brazil, Chile, China, Hong Kong, India, Macao, Malaysia, Mexico, Panama, Russia, Singapore, Taiwan, Thailand, Turkey, United Arab Emirates, United States and Viet Nam; - GOs (Guarantees of Origin): Aruba, Austria, Belgium, Czech Republic, France, Germany, Greece, Holland, Hungary, Ireland, Italy, Luxembourg, Monaco, Romania, Serbia, Spain, Switzerland, United Kingdom and United States; - REGO (Renewable Energy Guarantees Origin): United Kingdom; - TIGR (Tradable Instruments for Global Renewables): Bangladesh; - J-Credits: Japan.
By 2020, the supply of green certificates has expanded to Japan, Taiwan, New Zealand and Australia.
A summary of the sources used is presented below:
Information for calculation Source Energy Mix International Energy Agency (IEA), 2016. The IEA’s report published in 2016 is based on 2014 data.
Line losses International Energy Agency (IEA), 2016. The IEA’s report published in 2016 is based on 2014 data.
Scope 2 emissions « DEAM » database of Life Cycle Analysis (PwC) Scope 3 emissions (except solar energy) « DEAM » database of Life Cycle Analysis (PwC) Solar energy emissions Ecoinvent 3 Proportion of solar energy for non OECD International Energy Agency (IEA), 2015. countries The IEA’s report published in 2016 is based on 2014 data.
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Proportion of wind energy for non OECD International Energy Agency (IEA), 2015. countries The IEA’s report published in 2015 is based on 2013 data.
Coal, fuel and natural gas yields Energy Efficiency Indicators for Public Electricity Production from Fossil Fuels, IEA, 2008.
Total value ELECTRICITY Value scope 2 Value scope 3 Value green standard EMISSION FACTORS (strandard (standard electricity electricity (scopes (In gCO2/kWh) electricity) electricity) (scope 3 only) 2+3)
South Africa 1,032 150 1,182 41 Germany 522 87 609 24 Argentina 451 99 550 21 Aruba 925 158 1,083 8 Australia 903 145 1,048 25 Austria 122 37 160 19 Bangladesh 695 145 840 37 Barhein 573 164 737 Belgium 183 42 224 22 Brasil 204 52 256 20 Bulgaria 575 91 666 31 Cambodia 494 88 582 23 Canada 173 44 217 21 Chile 534 93 627 18 China 925 139 1,065 20 South Korea 327 65 392 24 Croatia 284 60 344 20 Denmark 368 61 429 8 United Arab Emirates 572 129 701 8 Spain 307 62 369 23 United States of America 594 100 695 16 Finland 218 40 258 11 France 36 12 49 22 Georgia 125 46 171 21 Greece 767 129 895 39 Guam 787 153 940 - Hong-Kong 1,084 168 1,252 0 Hungary 383 66 449 18 India 1,219 182 1,402 20 Indonesia 893 145 1,038 13 Irelande 510 96 605 9 Italy 367 79 446 28 Japan 607 110 717 26 Koweït 839 156 995 - Lituania 287 72 359 15 Luxembourg 194 56 250 23
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METHODOLOGICAL NOTE ENVIRONMENTAL FOOTPRINT - 2020
Macau 925 139 1,065 20 Malaysia 826 148 974 22 Mexico 558 113 671 18 Montenegro 618 102 720 23 Norway 11 21 32 21 New Zealand 132 38 170 16 Pakistan 539 108 648 24 Netherlands 571 103 675 9 Peru 328 85 412 22 Philippines 794 132 926 10 Poland 970 143 1,113 6 Portugal 321 61 382 16 Puerto Rico 787 153 940 - Qatar 640 145 785 - Czech Republic 655 100 755 25 Romania 452 81 533 20 United Kingdom 470 82 551 12 Russia 563 115 678 22 El Salvador 368 69 438 10 Serbia 831 128 959 23 Singapore 535 120 655 2 Slovakia 215 41 256 22 Slovenia 251 47 298 23 Sweden 9 12 22 17 Switzerland 5 15 20 21 Taiwan 740 121 861 15 Thaïland 650 127 777 15 Turkey 598 109 706 25 Ukrain 523 82 605 26 Uruguay 82 31 113 19 Vietnam 547 106 653 22
EXTERNAL VERIFICATION BY STATUTORY AUDITORS
For the thirteenth year in a row, the extra-financial data published in the Reference document was 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 the Extra-financial Performance Statement, in Chapter 3 of the 2019 Reference Document. The report by the Statutory Auditor concerns, among other things, the presence and the fairness of qualitative and quantitative published environmental, social and societal information.
The report issued by our Statutory Auditors can be found on page 225 of Kering 2020 Universal Registration Document. 14
www.kering.com/en/sustainability