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Production Part 4

Climate

We are working with engaged suppliers that value sustainability and invest in energy and water saving technologies.

In 2020, for the second year in a row, we mapped the full emissions of our business. We follow the Greenhouse Gas Protocol methodology for our emissions mapping, which means we cover scope 1, 2, and 3: our own emissions and energy use, as well as the emissions of the full supply chain and user phase.

We have continued our engagement in the Swedish Textile Initiative for Climate Action (STICA), which is an important initiative for learning, benchmarking, and developing climate work in the Swedish textile industry.

The continuity entailed by mapping our emission data, with a significant share of actual data, has enabled us to compare data points and correct and clarify certain mistakes in the data for 2018. Data quality will improve each year and we already see the improved quality for the full year of 2019. We have therefore recalculated our base year according to the corrections. 

73% of our total emissions are based on actual data from our shops, offices, and suppliers. For the remaining data gaps, we have been able to use a Nudie Jeans average based on our suppliers’ actual data from last year, but applied for suppliers that did not report data, but that have similar processes, are similar in size, and have similar geographic locations. Where we could not use a Nudie Jeans average, we have used generic data. Estimated data accounts for 27% of our total emissions.

We reused the result of the customer survey we conducted in 2019 to map user habits of Nudie Jeans customers, but recalculated the data based on 2019’s sales numbers. By mapping our supplier's actual emissions and by working with a baseline based primarily on actual data instead of generic data, we hope to be able to see the real changes we are working toward in our supply chain reflected in the numbers moving forward.

We have set science-informed targets in line with the 1,5-degree pathway of the Paris Agreement following the methodology created by Science Based Targets (SBT). We will move towards officially applying for SBT’s in the coming years. 

Scope 1 and 2 – direct emissions 

According to the Greenhouse Gas Protocol, direct emissions from company-operated cars, direct heating. and refrigerant leakage in Nudie Jeans’ facilities are included in scope 1, while electricity for heating, cooling, and general electricity consumption is included in scope 2. In scope 1 and 2, we have a more direct impact and greater resources to shift toward using only renewable energy in our Nudie Jeans Repair Shops, sales offices, and head office. For the full year of 2019, our electricity use from renewable energy sources stood for 21% of the total energy consumption in scope 1 and 2. Increased use of renewable energy in our stores and offices has played an important part in the 6% decrease in emissions in scope 1 and 2 since the base year 2018.

In 2020, action plans were established for converting to completely renewably energy subscriptions for electricity in our Repair Shops and sales offices before the end of 2023. In markets with a limited supply of renewable energy subscriptions, investments in Renewable Energy Certificates are accepted as a temporary alternative solution. 

Scope 3 – indirect emissions 

We have continued to map all of our emissions in scope 3, indirect and direct emissions from upstream and downstream activities in the supply chain. Our scope 3 emissions mapping showed that 5% of our total energy use in scope 3 comes from renewable sources. Switching to renewable energy throughout the supply chain will significantly reduce our total emissions. But we are aware that there are national and regional challenges that can sometimes prevent a rapid shift to renewable energy. We will apply the same strategy for the change toward renewable energy in our supply chain as in our own stores; in markets where the supply of renewable energy subscriptions is limited, we will investigate the possibility of investing in Renewable Energy Certificates as a temporary alternative solution. 

Transports

All our transports are included in our scope 3 emissions. This includes all transports in between suppliers in the supply chain, incoming transport from our main suppliers to our warehouse, and outgoing transports from our warehouse to retailers and online customers. With transports to every continent, we inevitably generate CO₂ emissions. The emissions created by our transports stand for 21% of Nudie Jeans’ total emissions. 

We transport incoming goods by truck, boat, air freight, and train. For outgoing shipments from our warehouse in Sweden, we use trucks for delivery in Europe and air freight for all other destinations. The transport of online orders to customers is mainly done by air freight. The main reason for our high transport emissions is our distribution set up, with a global distribution but with one main warehouse in Sweden.

As seen in the numbers in the illustration airfreight is contributing to most of the emissions for our transports, that is why it is important for us to focus the transport-related emission reduction actions on air freights first and foremost. This work will begin in 2021 with the roll-out of our omnichannel solution that has the potential to decrease the airfreights related to online purchases in Europe, and we will start exploring the possible solutions for increased use of sea freight instead of air freights focusing on the Australian market.

We will continue to work with more efficient packing of our goods to decrease transports. We are working on our production planning to allow suppliers to deliver according to the established timeframe, to be able to use sea freight, and not having to compensate for delayed production by cutting transport time by using air freights. 

In 2020, we started to highlight the transport alternative in our online shop, in some markets, that are better from an emission perspective to push the customer to choose lesser emissions intense transport alternative. Given the innovations and developments in the logistics sector, such as bike couriers and smart delivery boxes, we see a potential to decrease our “last mile” emissions – transports from the terminal of the carrier to the end customer.

All emissions from transportation, both inbound and outbound are compensated for by carbon offsetting, either by our logistic partner's own carbon offset program or by our annual carbon offsetting for our business full emissions.

Climate neutral or climate positive 

We do not believe nice words will do the trick for the climate; we believe in working toward change. Therefore, we do not talk about being climate neutral or climate positive through carbon offsetting. We focus on creating roadmaps to real change. This is challenging, but it is the only way forward. Meanwhile, we are working toward our reduction targets, we are investing in carbon offsetting to cover emissions from our business in all three scopes. Others call it climate neutral; we see this as the minimum amount necessary to even begin to claim that we take responsibility for the climate impact of our business. 

Carbon Offsetting

Our climate work is a journey; we are gradually developing our strategy and actions as our knowledge and possibilities around our climate initiatives expand. We have mapped our emissions for two consecutive years, and we have offset our business’ full emissions for both these years. 

The offsetting projects we invested in are mainly done through the UN Carbon Offset Platform. We have invested in three different projects, two wind power projects; one in Jaisalmer, Rajasthan, and Tirunelveli, Tamil Nadu, and one in Barmer and Jaisalmer, Rajasthan and Shimoga, Karnataka, and one biomass power plants based in Chimur, Maharasthra. The latter is also certified, Gold Standard. All the projects are based in the proximity of either our suppliers or the areas where the Chetna cotton comes from. All the above projects generate renewable electricity to the regional grid, replacing energy from fossil-based sources. We aim to continue to invest in carbon offsetting covering our business’ full emissions as a complement to actual reduction activities. 

Since July 2016, we have been part of the UPS Carbon Neutral program, in which we offset the CO2 emissions generated by our exports, imports, and returns. Carbon offsetting is achieved through different projects, such as reforestation or the development and installation of renewable energy power plants. The projects are verified by Société Générale de Surveillance (SGS).

Our bags and packages supplier, Avisera, created its own label for all Its bags and packages. They plant trees to compensate for the carbon emissions generated by the production process. All of our bags and packaging are made under this label and thus, we support their tree-planting activities.