2019

The Journey Towards Carbon Neutrality

We had a five strategic planning kick off in February 2018. As a result of that effort, we wanted to make sure we emerge as a leader in sustainability in our market. We evaluated many ways we could reduce our impact on the environment, including our carbon footprint.

To date we have completed a full Scope 1 to 3 calculations and purchased certified offset covering a biomass project in Vietnam, as well as wind power, landfill gas capture, and methane capture from abandoned coal mines.

Mowilex remains committed to maintaining its carbon neutral position by reducing waste, and voluntarily paying for the emissions we generate when we can reduce or offset in different ways.

In mid 2018 we started a process of determining the right approach, realizing that as a new and first time effort, we would need expert guidance.  And, would need to follow a process that is well established and respected.

The baseline greenhouse gas (GHG) inventory was evaluated for calendar year 2018 according to the organizational and operational boundaries specified by The Greenhouse Gas Protocol.

Engagement of SCS Global Services

By September 2018 we had engaged SCS Global Services (SCS) to guide us through the process.  We chose SCS

because they have:

• A long and credible track record of certifying companies, since 1984

• Certified various products from consumer to building materials for many fortune 500 companies.

• A calculation process is transparent and follows the  GHG Protocol

• A complete process to calculate emissions from scope 1 to scope 3

• A vast network of professionals organizations who would be able to show us projects from whom we could buy offsets

This effort captured our emissions from 1 January 2018 to 31 December 2018, and will be used as our baseline period.    The process covered all our emissions from 11 facilities in 8 cities, covering:

• Factory operations

• Warehouses, including those in our branches

• Head office

• Branch offices

The primary source of our GHG emissions were attributed to purchased electricity and diesel fuel. The assessment done for this phase of our effort encompassed:

• Emissions (direct emissions);  from mobile and stationary equipment used in offices, warehouse and plant.

• Emissions (indirect emissions);  associated with the generation of purchased electricity required for lighting, air-conditioning, operating motors and other equipment. The amount of carbon attributed to our operations will be reported to our auditors and any governmental agency who requests it.

Scope 1 and Scope 2 Carbon Neutral as of July 2019

Prior to SCS completing our Scope 3 emissions, we purchase offsets in excess of our footprint from a subsidiary of publicly listed Canadian company Just Energy Group, Inc. with operations in North America, Europe and Asia. This effort was a form of self certification. However, we wanted to both expand the scope and to get certified form a third party.

Offset for Scope 1 and 2

The purchased offset for our Scope 1 and 2 exercise was through Terrapass, a subsidiary of Just Energy.  The captured emissions are from the following projects:

Landfill gas capture: Landfill gas capture projects turn garbage into power. As organic waste breaks down, it releases methane, a greenhouse gas multiple times more powerful than CO2. Through the installation of gas collection and control systems, these projects result in the destruction of powerful greenhouse gases, and the gas can be burned in a generator to create renewable electricity.

Clean energy from wind power: Wind energy displaces electricity that is generated by dirty fossil fuels like gas and coal (the way that most power is currently generated in the United States). In this sense, the amount of carbon dioxide emissions that are avoided depends upon the “carbon profile” of the electricity grid where the energy is produced.

Abandoned coal mine methane capture: Coal mines are a major source of methane emissions.  Methane gas naturally exists in coal beds and is released into the atmosphere through mine shafts. Just Energy entities support methane capture projects at abandoned coal mines.  Like other methane capture projects, powerful greenhouse gases are destroyed and can also be used to generate electricity, thus providing a “double” benefit.

Expanding to Scope 3: Indirect Emissions

We reengaged SCS Global Services again, to expand the scope of our emissions output to cover Scope 3.  This was a rigorous process required by SCS to become third-party certified.

Scope 3 emissions include indirect emissions.  Such emissions include those from extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by Mowilex, outsourced activities, waste disposal, etc.    We accounted for emissions from in-bound and out-bound deliveries, third party logistics emissions, employee commute and business travel.

Scope 3 emissions (also known as value chain emissions) often represent the largest source of greenhouse gas emissions and in some cases can account for up to 90% of the total carbon impact.  In our case, our scope 3 emissions were approximately 4 times larger.

Certified Offsetting – Scope 1 through 3

To become certified neutral, we purchased additional offsets above and beyond what we had already purchased for Scopes 1 and2.   The certified source for this purchase was Natural Capital Partners (NCP) of California.  NCP also validated our Scope 1 and 2 offsets purchased.

NCP was a trusted source and recommended by SCS Global Services.  NCP has been the winner of best offset source for nine straight years though 2019, and has certified many large companies, including publicly listed ones, in the US and around the world.

The offset purchase arranged by NCP was from a Vietnam biomass project that converts

household and agricultural waste into energy supplied to 800,000 people.   The project is described as:

This Ashden award winning Gold Standard project has installed over 170,000 small scale biogas plants in households and small livestock operations across 55 provinces in Vietnam. Small fixed-dome biogas plants, also known as anaerobic digesters, provides a clean, affordable, and convenient form of energy to some of the two million rural families 

with pig farms that create huge odour and waste problems while reducing greenhouse gas (GHG) emissions. In addition, jobs are created for local populations, improved sanitation and reduced air pollution enhances health, and the replacement of synthetic fertilisers greatly reduces the environmental impact on surface and groundwater.

Next Steps

With a baseline established, Mowilex aims to reduce its carbon emissions to minimize offset costs. Our model is a simple approach which our employees can understand and follow: avoid, reduce, offset.

As offsetting carbon emissions is very expensive in terms of time and capital resources, the self-imposed discipline directs us to look for efficiencies in our operations.

We commit to measuring our emissions and minimizing our impact to the environment, disclosing our footprint and offsetting costs to our shareholders and government entities, as and when requested.