Driving energy efficiency and transitioning to renewable electricity in our direct operations

Our Challenge

The significant effects that climate change may have on our planet, customers, the economy, and the community can’t be ignored. We are committed to proactively managing our impacts on climate change and we support the global goal of reducing greenhouse gas emissions (emissions), consistent with the 2015 Intergovernmental Panel on Climate Change Paris Climate Agreement (Paris Agreement).

Target consumes significant energy through store network and distribution centres (DCs) and achieving Net Zero Scope 1 and 2 emissions in our owned and controlled operations is therefore a medium-term priority for business.

However, we recognise that over 90 per cent of total greenhouse emissions are in our value chain and beyond our direct control. For example, our goods and services account for approximately 50 per cent of our Scope 3 emissions, with most emissions emanating from our use of materials and manufacturing processes in the areas of clothing, appliances, homewares, and outdoor product ranges. Developing a strategy to reduce these Scope 3 emissions is a priority for our business over the long term.

Our Approach

Scope 1 and 2 emissions (owned and controlled operations)

To reduce our emissions, we are focused on:

  • Constant monitoring of our entire store networks energy usage through Building Monitoring Systems and our Energy Centre
  • Improving the energy efficiency and performance of our air-conditioning and lighting systems
  • Installing automated and timed LED lighting Installing solar arrays on stores and distribution centres where possible
  • Working with landlords to access their roof space and/or power generated by their solar systems
  • Working with landlords to access their roof space and/or power generated by their solar systems
  • Purchasing renewable energy

Scope 3 emissions (full value chain)

Target is on an exciting journey working towards our NetZero future and we recognise the value of working together with our partners. Approximately ninety per cent of our overall greenhouse emissions are in our value chain and beyond our direct control (owned and controlled operations), which is why we have joined with other global brands and retailers and signed the Fashion Industry Charter for Climate Action.

Through the Fashion Industry Charter, we have started working in partnership with other signatories and our suppliers to build a carbon reduction roadmap for the industry. These partnerships are helping us explore and understand the different opportunities to reduce greenhouse gas emissions in our value chain

A key piece to the puzzle on our journey to a NetZero future is data. As we work to engage with our suppliers on the energy efficiency of their own operations, helping them to understand and benefit from reducing greenhouse gas emissions, we will estimate the emissions from our value chain.

Target has adopted the recommendations of the international Taskforce on Climate-related Financial Disclosures. These recommendations aim to help investors understand a company’s financial exposure to climate risk and help companies disclose this information in a clear and consistent way. Through the Taskforce on Climate-related Financial Disclosure process we undertake a rigorous risk assessment to understand the potential risks resulting from climate change, and the opportunities available to us to address them.

Drawing on our baseline data collection, risk assessments, and learning from the Fashion Industry Charter, we are developing a comprehensive strategy

Our Progress

Scope 1 and 2 emissions (owned and controlled operations)

We’ve been busy improving the energy efficiency in our stores, distribution centres and support offices including working to install solar at relevant sites.

Last financial year (FY21) Target's total emissions from our owned and controlled operations equated to 88 ktCO2-e, down 19 per cent from 108 ktCO2-e, in FY20. This decrease is attributed to closing and converting of some Target stores.

In December 2021, we entered an arrangement for renewable electricity that supports our 100 percent renewable electricity commitment by 2025 and thus far 20% of our energy used in operations has transitioned to renewable sources.

Scope 3 emissions (full value chain)

Our current focus has been on developing and refining our scope 3 baseline as a first step toward developing a long-term strategy and roadmap.

Last financial year (FY21), the emissions from our value chain (scope 3) as a part of Kmart Group were estimated to be approximately 15,088ktCO2-e up from 10,407 ktCO2-e (FY20). This overall increase is attributed to an expanded reporting boundary and updated methodologies that better reflect our supply chain emissions. For more information about how we calculate our supply chain emissions click here. We will continue to be refine this calculation as access to supplier specific data improves.

Of our total scope 3 emissions, we have estimated that approximately 1026ktCO2-e is embodied within our apparel business from upstream raw materials and manufacturing. We estimate the emissions embodied within our materials (as defined by the Higg Index) - such as cotton, polyester and cellulose - to be 486ktCO2-e.

Studies have shown that approximately 48% of emissions are generated in the apparel supply chain are from fabric production, dying and finishing facilities*. Kmart Group has captured and verified energy consumption data for the 2020 calendar year from 72 wet processing facilities in our supply chain (out of 399 facilities = 18% of our total). This data shows that on average 0.53% of energy is currently sourced from renewable sources (solar photovoltaic). As part of roadmap to reduce scope 3 emission, we intend to work with our supply partners to encourage further update of renewable energy among our wet processors in future years.

*based on product order volume, product unit weight, material composition data and the respective Higg MSI emission factor.

**See Quantis 2018, https://quantis-intl.com/wp-content/uploads/2018/03/measuringfashion_globalimpactstudy_full-report_quantis_cwf_2018a.pdf

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