Energy management is about minimising the amount of energy we use across our operations, from the electricity we use it stores, to the vehicles we drive.
We measure our energy use from our carbon footprint and in Financial Year 2015 this was almost 40,000 tonnes of carbon dioxide, for other years (including any updates) go to our annual reports. A typical Kiwi household uses almost 21 tonnes of Co2-e a year (if you are interested in knowing your carbon footprint click here).
We get our emissions independently audited annually and The Warehouse Group has achieved CEMARS® certification.. CEMARS® stands for Certified Emissions Measurement and Reduction Scheme and is run by Enviro-Mark Solutions, a part of Landcare Research, which is a Government research institute.
In early 2016, we updated our emissions reduction target to be in-line with the reduction internationally committed to at a UN climate change conference in December 2015. The target relates to the level of emissions reductions necessary to keep global temperature increase below 2°C by 2050 – the level at which of the most significant impacts of climate change would be mitigated. For The Warehouse Group this means a 10% reduction (on Financial Year 2015 emissions) by 2020 and 32% by 2030. This is an ambitious, challenging and necessary target.
The strategy for reducing emissions is a built on two step process: first, reducing the amount of energy by eliminating inefficient use (e.g. replacing inefficient lighting with efficient lighting); and then substituting to less carbon-intensive energy sources (e.g. replacing grid electricity with solar electricity).
FY16 Greenhouse Gas Emissions
This year is the second year of reporting the greenhouse gas (GHG) emissions generated by all the major Group businesses: The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7, and Financial Services. We have achieved Certified Emissions Measurement and Reduction Scheme, (CEMARS®) certification for these emissions, which recognises our commitment to managing and reducing our GHG emissions. To receive CEMARS® qualification, our GHG emissions and emissions reduction plans were independently reviewed and audited.
The Group’s top emissions activities are electricity (34.0% of emissions), international shipping (31.9%), and domestic freight (9.9%), which includes road, rail and sea freight. International shipping emissions are reported for the products we directly source from overseas; we do not include international shipping emissions for products sourced within New Zealand (our suppliers are responsible for these emissions). Overall, Group emissions rose 2.8% to 41,105 tonnes of carbondioxide equivalent (CO2e). This increase makes our 2020 emissions target (see below) more challenging, requiring significant savings over the next three years.
The Warehouse generates 78.0% of the Group’s emissions, reflecting their greater store footprint and sales within the Group. In addition, The Warehouse directly sources the greatest proportion of products from overseas, and so has a significantly greater amount of international shipping emissions. The Warehouse’s emissions grew 3.6% last year, driven largely by emissions increases from international shipping and air travel. This growth offset emission reductions from improved control over the vehicle fleet (moving to more efficient vehicles and better management of fuel purchasing), reduced landfill, and improved domestic logistics with rail freight reducing considerably with a minimal impact on road freight. Electricity emissions fell slightly, partially due to reduced heating needs of stores as a result of the warmer winter. We began to implement highly efficient LED lighting in a small number of stores from November, though this would have a minimal impact on emissions – greater results will be seen in the future as we expand this to more stores.
Warehouse Stationery’s emissions grew 1.1%, largely due to increases in electricity and air travel, which offset significant reductions in emissions from our vehicle fleet and air-conditioning systems emissions. Noel Leeming’s emissions grew 2.9% as a result of increased emissions from air travel. A significant reduction in emissions from air conditioning systems reflects an improvement in the information used to calculate these emissions.
Torpedo7’s emissions fell 5.5% with the greatest reduction in company vehicle fuel. This decrease reflected vehicle policy changes, which has caused a very small increase in employees’ private mileage claim emissions.
Emissions from Financial Services fell 37.4%, from an already low level. The emissions reductions primarily came from travel and vehicle use.
During FY16, we reviewed our current emissions targets, replacing them with ambitious, ‘sciencebased’ target of a reduction (on FY15) of 10.0% by 2020 and 32.0% by 2030. A science-based target is one that provides the level of emissions reductions necessary to keep the global temperature increase below 2°C by 2050 – the level at which the most significant impacts of climate change would be mitigated. This is the level nations internationally committed to at the 2015 United Nations Climate Change Conference, COP 21.
To achieve these targets The Warehouse Group is focusing on two key steps. The first one is to reduce the amount of energy we use by eliminating inefficient use; for example replacing inefficient lighting with efficient lighting or making sure we utilise shipping containers fully by not shipping partially empty containers. The second step is then substituting to less carbon-intensive energy sources; for example, on-site power replacing grid power, or electric forklifts replacing LPG-powered ones. Extensive research has been done to identify and prioritise activities in both steps based on their potential impact on emissions. The following activities have been prioritised for FY17 to FY20: continued roll-out of LED lighting systems, improved electricity monitoring and management, improved sea-freight container utilisation, conducting and acting on site energy audits, and minimising standby appliance power.
While we have been developing our emissions targets and identifying our priority activities, we have still continued to work on reducing our emissions. Many of the activities in the past year have focused on putting in place the policies and processes to realise future emissions savings.
In FY16, we began to implement highly efficient LED lighting, which will provide our greatest source of emissions reductions over the next few years. For The Warehouse stores, switching to LED required comprehensive testing as we sought an LED technology that would provide bright enough lighting for our larger stores, and be dimmable to reduce output when more natural light was available through roof skylights. In November 2015, we switched on our first stores with full LED lighting at The Warehouse and Noel Leeming in Kaitaia. Since then, LED lighting has been installed in four more Warehouse stores and will be used in all future lighting upgrades. The previous lighting technology, T5, is in 55 of our Warehouse stores and will be replaced with LED when this lighting reaches the end of its financial life.
We are also working on electricity savings through improved monitoring and management of electricity at site level. Systems are in place to monitor electricity trends to identify under- and over- performing stores so corrective actions can be established to prevent electricity being inefficiently used.
Changes are being made to where we ship products into the country and how we move them around nationwide. We are currently expanding our South Island Distribution Centre in Canterbury, allowing us to ship more products directly to the South Island.
This reduces the amount of products shipped from the North to the South Island, saving on road and inter-island sea-freight emissions. In addition, we are working with the Sustainable Business Council together with several other New Zealand businesses on improving freight efficiency solutions through reverse logistics, moving to lower emission modes of freight, like sea and rail, and strengthening transportation procurement requirements.
A small but important source of emissions is those coming from our own leased fleet of passenger and delivery vehicles. All new vehicles must meet the highest European Union vehicle emission standards, currently ‘Euro 6’, the highest emissions standard internationally. These standards ensure that any vehicles, petrol or diesel, are both fuel-efficient and have the latest technologies to clean exhaust emissions. Because of a limited range of Euro 6 vehicles available locally, it is not possible for all of our vehicles to be Euro 6; these vehicles must be Euro 5.
We do not have any electric vehicles in our fleet, as the current range available in New Zealand is not suitable. We are committed to adopting electric vehicles in the future and recently installed two electric vehicle charging stations at our Support Office.
Partnering with ChargeNet, we have a public charger at The Warehouse’s Albany store. We are considering others for several more of our Red Sheds.
We are committed to adopting electric vehicles in the future and recently installed two electric vehicle-charging stations at our Support Office