ENERGY CONSUMPTION

The overall energy consumption of the various Inditex facilities, expressed in Gigajoules (GJ) and Megawatt hours (MWh), comes mainly from electricity consumption from the grid and, to a lesser extent, the consumption of fossil fuels (natural gas and diesel oil). In this indicator we include the energy consumptions derived from all our own factories, headquarters and brand head offices, as well as our logistics centres and all our own stores located in different countries around the world.

In 2016, we expanded the headquarters of Pull&Bear in Narón, which, together with the increase in our commercial area, produced a slight increase in energy consumption of 2% in absolute terms compared to the previous year. However, if we look at the relative consumption per garment, we achieved a reduction of 13% in relation to 2015. Regarding sales, we have reduced energy consumption by 6%, showing the improvement in efficiency in our activities. Likewise, all our facilities are built according to sustainable architectural criteria and their equipment features the most innovative technology for efficient energy management and saving.

The total electricity consumption in these facilities is tending to increase slightly. However, we continue to reduce consumption per garment by 12% and 8% relative to sales compared to 2015. Of note is the purchase of energy of certified renewable origin, which this year has amounted to 520 million KWh that were consumed in our facilities in Spain and Germany.

At Inditex we prioritize renewable energies, reducing our consumption of diesel oil and natural gas in both absolute and relative terms, as can be seen in both graphs. In their place, our energy supply scheme features photovoltaic and solar thermal panels, as well as facilities for the use of geothermal and wind generation. If we add the trigeneration and cogeneration plants and the purchase of energy from certified renewable sources, the result is that we meet 30% of the Group’s energy needs sustainably and we avoid emitting 178,508 tonnes of carbon dioxide into the atmosphere.

Own logistic centres, own head offices and own factories

These facilities are built according to eco-efficiency criteria; in their daily management we promote the development of sustainable practices among our employees to guarantee the exemplary respect for the environment. In addition, we are implementing an Efficient Management Plan whose objective is to reduce the consumption of resources.

Due to the increase in the logistics area resulting from the expansion of our Pull&Bear headquarters in Narón this year, we have slightly increased our energy consumption in absolute terms. Although thanks to the various measures carried out, such as the Efficiency Plan in logistics centres and offices started in 2015, we have managed to improve the efficiency of the installations, reducing the consumption of electricity in logistic centres, offices and factories per garment on the market by 14% and per sales by 9% compared to 2015. Measures carried out include the replacement of fluorescent tubes with high-efficiency LED bulbs and the renovation of old equipment with lithium-ion batteries, reducing their energy requirements.

Own stores

Thanks to the measures of the Eco-efficient Store Manual applied in our new openings and renovations, we reached a total of 4,519 eco-efficient stores in 2016. This represents 71.6% of the total of our own stores, without counting the franchises, and we expect to reach 100% in 2020. Likewise, we continued to increase the number of stores connected to the centralized platform for efficiency to 2,246 connected stores around the world at the end of the year. These sustainability and energy efficiency measures have reduced the consumption of electricity per garment put on the market in our stores by 12%. And this in spite of the increase in the number of openings and the increase of the surface area of our facilities. Compared with sales, it decreased by 8% on the previous year.

INDITEX GREENHOUSE GAS EMISSIONS (GHG)

The Group’s Greenhouse Gas (GHG) emissions are calculated and reported in line with the international directives of the Intergovernmental Panel on Climate Change, the IPCC (Guidelines for National Greenhouse Gas Inventories, 2006) and the World Resources Institute (GHG Protocol, 2015). The emission factors applied to natural gas and diesel are taken from the GHG Protocol tool for calculating emissions derived from stationary combustion, v.4.1 by the World Resources Institute (WRI), 2015. Emissions from electricity consumption have been calculated using the emissions factor corresponding to the energy mix of each of the 93 countries in which Inditex operates. The database used corresponds to the GHG Protocol tool from purchased electricity, version 4.9 of the World Resources Institute (WRI), 2017. The Inditex Group’s GHG emissions inventory includes direct and indirect emissions for the period from 1 February 2016 to 31 January 2017.

A data history based on each of the scopes considered by the GHG Protocol is presented below.

Emissions Scope 1 and 2

• Scope 1: Direct emissions. These are GHG emissions associated with sources under the Inditex Group’s control. It includes:
  • Emissions associated with electricity and heat generation in owned premises, detailed at the beginning of the section. Emissions associated with occasional leaks (or isolated leaks) of HFC and PFC gases from air-conditioning equipment are not included.
  • Emissions from the use of own vehicles.
• Scope 2: Indirect emissions. They are associated with the generation of electricity acquired by the Inditex Group. The calculation was based on the GHG emissions from all the Group’s facilities, as defined at the beginning of the section. Electricity used in international offices is not included.

* The Scope 2 data is calculated using the market-based method, following the GHG Protocol guide for calculating Scope 2, World Resources Institute (WRI), 2015.
** The efficiency ratio includes emissions associated with the Group’s operations (scope 1 and 2).
(1) Includes all garments released on the market through all the stores, both owned and franchised.

The set of actions to promote energy efficiency coupled with the materialization of our commitment to renewable energy through the purchase of 520 million kWh of electricity from certified renewable sources, has allowed us to reduce GHG emissions in absolute terms. On a relative basis, we note a reduction of 26% per garment, as well as 22% in relative terms with respect to sales compared to 2015.

Scope 3 Emissions

• Scope 3: Optional scope that includes indirect emissions associated with the goods and services supply chain produced outside the organization. Included are emissions from the transport of products from our suppliers to our logistics centres (upstream) and from these to our stores (downstream), both being performed by external logistics operators (air, land and sea transport) as well as the emissions associated with electricity consumption in franchise stores.

In the case of the indirect emissions of our franchised stores, we see a slight increase, due to the growth of the franchised commercial surface area.

*Electricity consumption for calculating emissions was obtained from real data from the central monitoring platform. To estimate the average consumption data has been considered from 766 stores, with 100% being eco-efficient. The goal is 100% of our own stores will be eco-efficient by 2020.

The transport calculation has been carried out based on the weight of the product dispatched and the number of kilometres travelled by each means. The following emission factors, as proposed by the GHG Protocol for mobile combustion V2.6, are used: (World Resources Institute (WRI), 2015).

• Kg de CO₂ /tonne and km truck (load over 33 t)= 0.08678
• Kg de CH₄/tonne and km truck (load over 33 t)= 2.3973*10-6
• Kg de N₂ /tonne and km truck (load over 33 t)= 1.8494*10-6
• Kg de CO₂ /tonne and km short haul flight (< 463 Km)= 1.96073
• Kg de CH₄/tonne and km short haul flight (< 463 Km)= 2.8562*10-5
• Kg de N₂O /tonne and km short haul flight (< 463 Km)= 3.2809*10-5
• Kg de CO₂ /tonne and km medium haul flight (between 463 and 1108 Km)= 1.47389
• Kg de CH₄/tonne and km medium haul flight (between 463 and 1108 Km)= 2.8562*10-5
• Kg de N₂O /tonne and km medium haul flight (between 463 and 1108 Km)= 3.2809*10-5
• Kg de CO₂ /tonne and km long haul flight (> 1108 Km)= 0.61324
• Kg de CH₄/tonne and km long haul flight (> 1108 Km)= 2.8562*10-5
• Kg de N₂O /tonne and km long haul flight (> 1108 Km)= 3.2809*10-5
• Kg de CO₂ /tonne and km ship= 0.0079
• Kg de CH₄/tonne and km ship= 2.8083*10-6
• Kg de N₂O /tonne and km ship= 9.5892*10-7

INDITEX, ZERO WASTE TO LANDFILL

In the framework of our Sustainable Strategic Plan, we continue to work on integrating the circular economy into our business model. The aim is that by 2020, none of the waste from our activities ends up in a landfill. To this end, we use different tools, such as the Waste Minimization Plan or the In-Store Waste Management Manual, which enable us to manage waste more efficiently in our centres. In addition, we develop training projects aimed at our employees, in which we promote actions for reducing in origin and improving recycling, such as the use of reusable bottles.

Similarly, we are aware of the need to generate less waste in our value chain, and so we implement projects such as Closing the Loop, an initiative for collecting used clothes, or the Green to Pack, which contributes to the efficiency of shipments. The waste generation data presented below, refers to the waste generated in headquarters, brand headquarters, all Inditex factories and logistics centres. It does not include the waste generated in stores.

Evolution of recovered products to send to recycling (kg)

All waste generated by Inditex is collected and managed by a legally authorized body that sends the waste for recycling (in the case of paper and cardboard, plastic, metal, textile remains, among others), and other appropriate treatments which allow it to be recovered. In 2016, more than 87% of our waste was managed in a way that does not harm the environment.

Annual generation of urban waste or similar

Waste is classified by the European Waste List (EWL) and its transposition into national and regional legislation. The main waste generated is cardboard and paper, plastic, wood, metal and textile remnants, which are managed by legally authorized waste managers who send it to be recycled. The increase in the generation of these wastes is due to the expansion of the logistics capacity of the Group, as well as the maintenance of the current capacity and improvement in source separation processes.

Evolution of principal hazardous waste

In 2016 we achieved recycling and recovery of 90% of our hazardous waste, preventing it from going to a landfill and reducing the need to obtain new raw materials. Thanks to separation at source and subsequent shipment to legally authorized waste managers, we promote recycling or other suitable treatments that allow recovery of hazardous waste.

Below is the generation of the main hazardous wastes. The increase of certain residues such as fluorescents or batteries is a consequence of the implementation of the Efficiency Improvement Plan in the logistics centres. These are being replaced by more efficient equipment such as lamps with LED technology and lithium-ion batteries. Both fluorescents and batteries have been managed by authorized waste managers for recycling.

Destination of waste according to type and treatment

Thanks to the Waste Minimization Plan and the effort and commitment of our employees, the waste generated by Inditex is separated at source. All waste is collected and managed by legally authorized managers, who send it to be recycled (mainly paper and cardboard, wood, plastics, metal and textile remnants) and other appropriate treatments that allow its recovery and environmentally suitable management.

The packaging materials released on the market (paper and plastic bags, tags, protective elements) along with the products sold by Inditex are properly managed by authorized bodies. Inditex subscribes to the Integrated Management Systems for Packaging and Wrapping available in countries that employ them. The company’s commitment to these systems means that each Inditex brand pays a non-profit management agency to collect and manage the waste generated by the stores. This management entity, established with the recognition of each country’s authorities (for example in Spain, Ecoembes), guarantees that the waste generated by the stores is properly collected, managed and recycled.

With regard to the recovery of marketed products, it is not possible to assess the volume generated and the management carried out at a global level, since there is no specific collection and management system for textile materials at a global level. Through our Closing the Loop we contribute to generating a channel that allows the reuse and recycling of said products.

WATER CONSUMPTION IN INDITEX’S HEAD OFFICES, FACTORIES, LOGISTICS CENTRES AND OWN STORES

Water consumption data come from direct measurements and receipts from suppliers (public supply networks) of our headquarters, Inditex’s factories, logistics centres and our own stores.

Thanks to the efficiency and water-saving measures carried out in our centres, we continue to improve the downward trend in relative water consumption per garment and in relation to sales (€), by 13% and 8% respectively. The increase observed in absolute terms is due to the growth of our sales area.

Water supplied to all the centres for use in processes and for consumption comes from public, authorized supply networks. The greatest water consumption is for domestic use, fundamentally cleaning and sanitation, guaranteeing its discharge to municipal sewage systems.

In industrial activities, water is mainly required for steam generation and industrial refrigeration in a closed cycle, where recirculation systems are used. The amount of wastewater can be calculated as equal to the amount of water consumed, as there are no productive processes that consume water and the cooling systems use a closed cycle. Discharge of wastewater from all installations is carried out via sanitation networks, in all cases with the corresponding administrative authorization. In addition, periodic analyses are carried out to ensure compliance with current legislation. Inditex has no impact on protected habitats.