Carbon & Energy
We are committed to addressing climate change impacts from our own operations, including in offices, stores and manufacturing and distribution sites. One of our goals to 2022 is to become carbon neutral in our own operational energy use, with a focus on driving energy efficiencies and renewable energy procurement.
We aim to achieve a zero-carbon footprint by improving energy efficiency, reducing absolute consumption and switching to renewable energy sources, before offsetting any remaining emissions. Our retail network is responsible for 76% of our direct carbon emissions. We have set energy targets for all our stores globally, spearheaded by regional leadership and reinforced by a training programme and technical support. Over the last year, we established a network of Responsibility champions in key stores, whose objective is to inspire and support retail teams to improve energy efficiency and engage with the Responsibility Agenda more broadly. We are now carbon neutral across the Americas region, EMEIA retail stores and our UK operations.
We have reduced our global, absolute energy consumption by 7%, primarily through behavioural changes and LED lighting. We then used the cost savings from energy reductions to finance additional renewable energy procurement. We are on track to achieve our RE100 commitments as we now obtain 58% of our total energy (including 68% of our electricity) from renewable sources, an increase of 13% from last year. We assess our progress towards carbon neutrality by looking at the reduction in our total market-based carbon dioxide equivalent (CO2e) emissions year on year and since the launch of our strategy in 2017, we have reduced our emissions by 43%.
To manage energy use in manufacturing, we continue to evolve our energy reduction programme, which for wet processing facilities has been modelled on the Natural Resource Defence Council’s “Clean by Design” principles. Through this programme, we work directly with both finished goods and raw material facilities to identify and implement energy saving opportunities.
During FY 2018/19, 19 facilities were involved in the programme, with the aim of achieving at least a 5% reduction in carbon emissions. Examples of energy-saving measures include lighting replacements and process improvements. We also work with our supply chain partners to promote the use of renewable energy across our supply chain. As a result, in FY 2018/19, 7% of our products were manufactured in facilities that procure a significant proportion of their energy from renewable sources.
EXPANDING OUR AMBITIONS
We are also looking beyond 2022, setting ambitious carbon goals for 2030. Our targets have been approved by the Science Based Target Initiative (SBTi) and include a commitment to reduce our Scope 1 and 2 emissions by 95% by 2022 and our Scope 3 emissions by 30% by 2030, both from a 2016 base year. Targets are classed as science based if they are in line with the level of carbon reduction required to keep the global temperature increase to 1.5 degrees Celsius, compared to preindustrial levels, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change.
In December 2018, we joined the UN Fashion Industry Charter for Climate Action. One of its aims is to reduce aggregate GHG emissions across the fashion industry by 30% by 2030. Representatives of the Responsibility team actively participate in the working groups and chair one of them.
As members of the Prince of Wales Accounting for Sustainability (A4S) initiative, we are working towards implementing the recommendations of the Financial Stability Board’s Task Force for Climate-related Financial Disclosures. In line with their recommendations and to future-proof our business, climate change is included as a principal risk in our Risk and Viability Report.
During FY 2018/19, we conducted three scenario-planning workshops, involving senior leadership from key functions across the business, including Risk, Strategy, Investor Relations, Customer Insight, Responsibility, Supply Chain, IT and External Communications. Facilitated by Forum for the Future, the workshops helped us identify and assess long-term environmental, social and technological trends that could significantly impact Burberry’s business model and operations over the next 20 years. These trends will inform our long-term supply chain strategy and our strategic response to climate change risks, a process that has already started with the presentation of key insights to the Board in March 2019.
ENERGY AND GLOBAL GREENHOUSE GAS EMISSIONS
The disclosures required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 are included below.
(Year to 30 March 2019)
year 18/19Reporting year 17/18Reporting year 16/17Total energy (KWH) - including energy from fuel used in vehicles76,575,371^82,309,19785,150,844Combustion of fuel and operation of facilities (Scope 1) (Kg CO2e)2,096,267^2,144,0912,128,334Electricity, heat, steam and cooling purchased for own use (Scope 2) (Kg CO2e)29,111,338^32,072,00133,839,522Total emissions location based (Scope 1 & 2) (Kg CO2e)31,207,605^34,216,09235,967,856Electricity, heat, steam and cooling purchased for own use (Scope 2) (Kg CO2e) MARKET BASED APPROACH12,729,675^18,060,68623,027,948Total emissions market based (Scope 1 & 2) (Kg CO2e)14,825,942^20,204,77725,156,282Total emissions offset by Verified Emissions Reduction Certificates (Kg CO2e)352,729^170,4110Intensity measurement (Location based Kg CO2e per £1000 sales revenue)11.5^12.513.0% of Energy (kWh) from Renewable Sources76,575,371^58%^48%37%
|Reporting year 17/18||Reporting year 16/17|
|Total energy (KWH) - including energy from fuel used in vehicles||76,575,371^||82,309,197||85,150,844|
|Combustion of fuel and operation of facilities (Scope 1) (Kg CO2e)||2,096,267^||2,144,091||2,128,334|
|Electricity, heat, steam and cooling purchased for own use (Scope 2) (Kg CO2e)||29,111,338^||32,072,001||33,839,522|
|Total emissions location based (Scope 1 & 2) (Kg CO2e)||31,207,605^||34,216,092||35,967,856|
|Electricity, heat, steam and cooling purchased for own use (Scope 2) (Kg CO2e) MARKET BASED APPROACH||12,729,675^||18,060,686||23,027,948|
|Total emissions market based (Scope 1 & 2) (Kg CO2e)||14,825,942^||20,204,777||25,156,282|
|Total emissions offset by Verified Emissions Reduction Certificates (Kg CO2e)||352,729^||170,411||0|
|Intensity measurement (Location based Kg CO2e per £1000 sales revenue)||11.5^||12.5||13.0|
|% of Energy (kWh) from Renewable Sources76,575,371^||58%^||48%||37%|
Note: Burberry applies an operational control approach to defining its organisational boundaries. Data is reported for sites where it is considered that Burberry has the ability to influence energy management. Data is not reported for sites where Burberry has a physical presence, but does not influence the energy management for those sites, such as a concession within a department store. Overall, the emissions inventory reported equates to 94% of our sq. ft. (net selling space). Emissions resulting from activities in the UK amount to 22% of total global emissions (29% of total energy consumption). The Company uses the Greenhouse Gas Protocol (using a location and market-based approach to reporting Scope 2 emissions) to estimate emissions and applies conversion factors from Defra and IEA guidance. All material sources of emissions are reported. Refrigerant gases were deemed not material and are not reported. Burberry has updated GHG data for FY 2016/17 and FY 2017/18 to account for updated emission factors and improvements in data availability and estimation methods. Further detail is available within Burberry’s basis of reporting at www.burberryplc.com.
^ Assured by PWC, see page 54 of Burberry's Annual Report FY2018/19.