Environmental Responsibilities

In pursuance of the highest standards of environmental care and protection, commitments will be guided by international law and best practice voluntary norms on the following:

• Manage all issues of environment policy as integral parts of Company/Entity/Facility business and planning.
• Develop appropriate environment policies and programmes, monitor their consistent implementation by accountable and adequately resourced personnel, and ensure that these policies and programmes are communicated to all employees.
• Foster awareness of shared responsibility and accountability for the environment among workers through a communication programme which embraces interaction and co-operation with all stakeholders.
• Eliminate the use of chemicals and hazardous substances subject to international bans due to their high toxicity to living organisms, environmental persistence, potential for bioaccumulation, or potential for depletion of the ozone layer and employ alternatives to other hazardous substances used in production processes wherever technically and economically viable.
• Manage wastes, emissions, dust and the use of potentially harmful substances so as to prevent pollution.
• Conduct regular environmental audits to evaluate compliance and effectiveness of the environment policy of the business and report the outcomes annually to the supervisory board/ management of the company/entity/facility.
• Alternatives to hazardous substances used in business processes will be sought and employed where technically and economically viable.

Companies should report their carbon footprinting data and should follow the below recommended 5-step approach, which is aligned to the GHG Protocol Methodology:

• Define an organisational boundary and a reporting boundary
• Identify emissions sources
• Collect activity data
• Quantify the carbon footprint
• Ensure quality control

Where Companies are not currently calculating and reporting its carbon footprint, they should consider reporting typical activity data that can be employed in the estimation of an approximate carbon footprint. In this case, only consumption from those sources that are owned or controlled by the Company should be reported. Whether reporting activity data or calculating a carbon footprint, data quality should be a key consideration, preferring better quality data to the extent possible.

Companies are encouraged to report their carbon footprint in annual reports (e.g. Sustainability Reports or Integrated Annual Reports). While Companies are welcome to calculate their own carbon footprint, it is recommended best practice to employ a professional consultant to ensure accurate calculation and reporting.

Where Companies do not yet calculate, monitor and report its GHG emissions/carbon footprint, they must describe a forward-looking plan on how they intend to do this in the future.

Where Companies’ carbon footprint is independently assured or verified, they should explain the details of the third-party verification and provide proof of verification. While it is not mandatory to independently verify a Company's carbon footprint, it is recommended and considered best practice.

There are three general types of verification:

• Internal verification or quality control by the group’s own employees. This internal verification ensures the footprint methodology has been followed correctly.
• External verification by a third-party against recognised best practice. Third-party verification should be undertaken according to a robust methodology or standard, such as the GHG Protocol or ISO14064 Standard. Simply put, the third-party ensure that your footprint has been calculated according to best practice methodology of either the GHG Protocol or the ISO 14064 Standard.
• Third-party Assurance against specified standards. In the case that assurance is the type of verification employed:
  • Assurance of non-financial information should be carried out according to the ‘ISAE 3000 (Revised): Assurance Engagements other than Audits or Reviews of Historical Financial Information’ standard.
  • Assurance of GHG statements should be supplemented by the application of the ‘ISAE 3410’ Assurance Engagements on GHG Statements.

Companies should articulate any specific carbon reduction targets they have made or intend to make. Carbon and climate targets set an imperative to which Companies signal their wishes to be held accountable. The key components of a Company's carbon and climate targets should include:

• The explicit baseline and target to achieve (e.g., a percentage reduction in its carbon footprint from a chosen year)
• A timeline for achievement of these targets (e.g., by 2030)
• Buy-in and endorsement of the carbon and climate targets from senior management
• A credible strategy or plan of action to achieve the carbon and climate targets
• A monitoring and reporting system to track performance against the carbon and climate targets made

Where Companies have set or are intending to set carbon and climate targets, it is not immediately required to have a detailed plan of action or monitoring and review system in place (although these should be developed as a priority to align with best practices). Companies should be able to demonstrate taking proactive steps towards identifying the improvement mechanisms, and planning and affecting implementation once targets have been set.

Companies should consider whether their carbon and climate targets are quantitative or qualitative.

• Quantitative: for example, this can be a target to be carbon neutral by a certain date; or to achieve a 30% reduction in a Company's Scope 1 emissions by 2025; or sourcing 50% of energy/electricity from renewable energy sources by 2030.
• Qualitative: for example, implementation of a carbon and climate awareness training programme for all personnel; or certification to ISO 14001 Standard. The key consideration is for the target to be specific, understandable, and measurable.

Companies' carbon and climate targets should be related to its carbon footprint from its operations and businesses within it. They should ideally represent “stretch goals” while being achievable, and relate to opportunities to make a meaningful impact, whether addressing harm or making a positive contribution. The nature of the carbon and climate target is dependent on a Company's core values and strategy. Examples include but are not limited to:

• Carbon and climate targets relating to reducing carbon emissions across Scope 1, 2 and 3 emissions,
• Using more renewable energy across operations, or investing in technologies that will support climate action beyond a Company's value chain (for example, investing in nature-based solutions, green hydrogen technology, carbon capture technology etc.), the adoption of management frameworks, methodologies or tools, that are intended to drive positive performance and impact through management implementation (for example, becoming a signatory to the UN Global Compact, becoming a signatory to the We Mean Business Coalition, adopting the recommendations of the Task Force on Climate-Related Financial Disclosures (FSB TCFD), or committing to the Science-based Targets initiative to set a science-based carbon reduction target).

Where Companies undertake verification of carbon and climate targets, this should be against a recognised external Standard, for example:

• Validation by the SBTi for science-based carbon emissions reduction targets and/or Net Zero targets validated against the SBTi Net Zero Standard
• In the case of Carbon Neutral targets: verification against the PAS 2060, Australian National Carbon Offset Standard for Organisations, or another credible alternative.

Carbon and climate targets should be supported by measures to meet (or exceed) these targets. Strategies or action plans can include a suite of technological, behavioural and structural measures to meet carbon and climate commitments. The measures employed to reduce a Company's carbon and climate impacts will be unique to that Company's settings but may typically include interventions related to: energy efficiency, renewable energy, carbon offsets, climate change policy development, education and awareness campaigns, process innovation, disruptive technology adoption, and circularity measures (waste minimisation can help reduce carbon emissions, for example).

Where strategies, action plans or measures include carbon offsetting, Companies should elaborate on the measures planned or adopted, and describe internal or external guidance and standards applied (for example, Oxford Principles for Net Zero Aligned Offsetting or PAS2060 Offsetting Residual GHG Emissions).

Where Companies are making carbon and climate targets, they should devise a carbon and climate performance monitoring and reporting system. The system should be effective in tracking Companies' performance in respect to their carbon and climate commitments.

The means by which progress is measured and communicated by Companies over time, may be entity-level specific and driven by the objectives Companies have defined. Typically, progress and performance are reported with the use of indicators that translate data into decision-useful information. Indicators may communicate:

• absolute performance (for example, 25 tCO2e of carbon emissions avoided), intensity performance (for example, the carbon intensity per carat - 0.5tCO2e/carat)
• relative performance (for example, 33% carbon emissions reduction against prior year performance) or
• progress against a target (for example, 30% of the carbon emissions reduction target achieved in 25% of the target period)

An effective carbon and climate performance monitoring and reporting system should have the following elements:

• A suitable baseline for each measure being disclosed and reported against. A baseline reflects the starting point against which future performance, targets and objectives will be measured. A carbon emissions baseline should be derived from a representative data set and ideally not, for example, during a period of major disruptions to operations (for example, using a 2020 baseline for carbon emissions is not representative of business-as-usual due to business disruptions from Covid-19).
• A robust system in place to record carbon and climate data, such as electricity consumption, fossil fuel consumption, and refrigerant gas purchases throughout the period. This may involve appointing internal champions or designated roles to personnel for the collection and reporting of this data. Alternatively, third-party contractors and service providers can help to provide data to Companies (such as landlords collecting energy use information for billing), and converting expenditure into carbon emissions (such as spend on company vehicle fuel purchases to litres of fossil-fuels used and carbon emissions produced).
• Rigorous data validation and verification procedures to ensure that the carbon and climate data collected are accurate, reflective, complete, and usable for Companies' carbon and climate reporting. This may involve having quality checks in place, requiring substantiation, and supporting documentation with data collection and entry into the Companies' records.
• Regular and consistent carbon and climate impact reporting that clearly shows the progress made between periods and demonstrates alignment between Companies' carbon and climate performance and the carbon and climate commitments made.