Protecting The Environment

THE USE OF ENERGY RESOURCES IN THE GROUP’S OPERATIONS

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The total consumption of energy deriving from non-renewable resources can mainly be attributed to the consumption of grid electricity and, to a lesser extent, the consumption of natural gas and diesel used to heat the production and logistics sites within the reporting scope. Meanwhile, the total consumption of renewable energy is connected with hot water from biomass and electricity from photovoltaic energy and refers exclusively to the Italian sites.

Total energy consumption(a)

(a) Energy consumption refers to Luxottica manufacturing facilities in Italy, China, United States, Brazil and the main distribution centers in Italy, China and the United States. Data exclude electricity consumption from the grid by Data Centers, whereas the energy consumption by the US primary distribution center has been estimated. The conversion factor used to calculate energy consumption in GigaJoules is 1 kWh = 0.0036 GJ (source: International Energy Agency, www.iea.org). The consumption in TeraJoules was 1,257 TJ in 2016, 1,370 TJ in 2017 and 1,401 TJ in 2018

Similarly to the trends recorded in previous years, also in 2018 the general increase in energy consumption in the Operations (+2.3% to 389.1 kWh at constant scope) is due to a series of factors, such as:

  • the continuation of the strategy of internalizing some production processes in Italy, China and the United States, with a consequent increase in installed capacity and the amount of fixed energy consumption;
  • increase of the installed power and therefore of the energy consumption in the new logistic hubs rolled out in Sedico, Atlanta and Dongguan during 2018;
  • the continue increase in the product complexity and the different production mix between metal, injected plastic and acetate eyewear, where metal processing involves around 70 different phases and the use of more energy-intensive technologies compared to other production technologies.

In 2018 energy intensity increased by 3.6% from 2017. Excluding the impacts deriving from insourcing some production processes and from the increased logistic capacity, energy intensity improves to 4.43 kWh/frame from 4.45 kWh/frame in 2017.
Electricity and methane gas are the Group’s two main sources of energy and account for almost all of the energy consumption of the production sites and distribution centers in the reporting scope. Diesel is used in the event of problems with the supply of electricity to the Chinese production site, and to supplement the thermal energy produced by the biomass plant in the Cencenighe site during the coldest periods of the year, typically January and December.

Total energy consumption from non-renewable sources

(a) The conversion factor used to calculate methane gas energy consumption in Kilowatt hours is 1 sm3 = 10.944 kWh (Source: Stogit measures converter)
(b) The conversion factor used to calculate diesel energy consumption for heating in Kilowatt hours is 1 l = 10.005 kWh (Source: Italian Greenhouse Gas Inventory 1990 – 2014 – National Inventory Report 2016 Annex 6 National Emission Factors – Istituto Superiore per la Protezione e la Ricerca Ambientale - ISPRA)

THE GENERATION OF ENERGY FROM RENEWABLE SOURCES

Since 2013, Luxottica has been investing in manufacturing plants that run on renewable energy, with the objective of reducing its Carbon footprint across the value chain.

The first one was the solar panel system in the Lauriano factory. Between 2014 and 2017, approximately 2,000 sqm of solar panels enabled the Company to reduce emissions by approximately 80 t/ CO2 per year.

In 2014, the first biomass heating system was built in the Cencenighe factory, which is used for heating the premises. In July 2016, the solid biomass fueled trigeneration system next to the Agordo factory was started. The system became fully operational during 2017. Built by Enel Energia, it has an electrical output of 199 kW and a thermal output of 1,220 kW, which is able to satisfy 40% of the heating requirements and 60% of cooling requirements within the factory. 

Consumption of renewable energy in Italy

In 2018 Luxottica activated a solar thermal plant for the production of hot water at the Chinese production site.

Monitoring the CARBON FOOTPRINT

One of the cornerstones of the environmental impact monitoring system is greenhouse gas emissions (GHG), which are reported on the basis of the international classification proposed by the GHG Protocol standard and used by the Global Reporting Initiative. 

With reference to Scope 1 (direct greenhouse gas emissions from proprietary installations or installations controlled by the organization), the greenhouse gas emissions (in CO2eq) are calculated on the basis of the emission factors applied to methane gas and heating fuel taken from the dedicated “GHG Protocol tool for stationary combustion”33 made available by GHG Protocol. As for Scope 2 (indirect greenhouse gas emissions deriving from electricity generation, heating, cooling and steam energy, imported and consumed within the organization), the emissions deriving from electricity consumption are calculated using the emission factor corresponding to the energy mix of each of the countries in which Luxottica operates. The emission factors applied here come from the dedicated “GHG Protocol tool for purchased electricity34”, also made available by GHG Protocol.

CO2eq emissions deriving solely from the Group’s manufacturing activities and logistics hubs (Scope 1 and Scope 2) came to 160,872 tons in 2018, an increase of around 5% compared with 2017 due to the same factors that led to the increase in energy consumption previously discussed. However, the breakdown shows improved trends in terms of direct emissions (Scope 1), which dropped by more than one percentage point between 2016 and 2018, and by half a percentage point from 2017 to 2018, thus further confirming the efficacy of the actions taken to support better energy consumption management at the plants. The greater quantities of indirect emissions (Scope 2) are instead due to increased energy consumption deriving from the internalization of production processes and the increased logistic capacity above-described.

Therefore, excluding these last impacts, the overall emissions per frame have dropped to 1.73 kgCO2eq/pz (-3% from 2017).

Greenhouse gas emissions

(a) Company car fuel is excluded from the calculation as this information is only partially available in the reporting scope. F-Gas emissions are included.

CARBON FOOTPRINT MEASUREMENT ACROSS DISTRIBUTION

The entire distribution chain is managed and controlled through a system of indicators that measure the service level on a global scale. Among the initiatives to improve the sustainability of logistics, in 2017 Luxottica launched a project to measure CO2 emissions deriving from the transport of its products to monitor their environmental impact.
The first phase of the project, carried out in 2017 and updated in 2018, quantified the emissions deriving from the transport of finished products (eyewear) among the primary distribution centers of Sedico, Atlanta, Dongguan and Jundiaì (mapping the replenishment flows), thus considering both air transport and road transport between the distribution center and the airport. In 2018, the analysis showed an increase in CO2 emissions deriving from the replenishment flows of 8.3% from 2017, to 76,591 tons of CO2eq (70,715 tons of CO2eq in 2017), which reflects the increase in the volumes of eyewear shipped.
As part of the progressive broadening of the analysis scope, the second phase of the project to quantify CO2 emissions deriving from the transport of finished products (eyewear) considers all the distribution channels used to reach the end consumers (wholesale, retail, e-commerce). For these shipping and transport services the Group involves suppliers that deal with national transport (typically by land) and international transport (typically by air) depending on the geographic location of the recipient.

As a consequence, the scope of the analysis covers the entire flow, from the distribution hub of origin to the customer’s destination, including the emissions generated by all the means of transport used along route. The first map of these shipments was launched in 2018, starting from the Sedico hub, as this is the main logistics center of Luxottica’s distribution chain in terms of overall volume of shipped finished products. In addition to the direct replenishment flows to the other distribution hubs of the Group in the world, eyewear shipments leave Sedico every day to reach customers in Europe, the Middle East, Africa, Mexico and Turkey, as well as some select destinations in the US and in the rest of the world. Furthermore, the Sedico hub manages customized services, such as Ray-Ban Remix, ensuring direct shipment throughout the world. By analyzing these shipments, Luxottica was able to estimate the consumption of energy and the related CO2 emissions, quantified at about 14,770 tons of CO2eq along more than 6 billion kilometers traveled.

For further information, please read THE NON-FINANCIAL STATEMENT

CONSUMPTION AND RESPONSIBLE MANAGEMENT OF WATER RESOURCES E

Over the years Luxottica has invested in the management and optimization of the use of water resources, starting from the monitoring, on a monthly basis, of the consumption of well and network water, thanks to the presence of meters installed in all production sites and logistics hubs.

Water consumption

The consumption of water in the Operations has further fallen during 2018, from 3.07 million m3 in 2017 to 2.86 million m3, showing a reduction of over 11% from 3.22 million m3 in 2016 and also additional reduction of discharge water. This result is particularly important as it epitomizes the benefits deriving from the continuous improvement of the consumption monitoring process and of the activities implemented in the previous years to promote the correct use of water in the manufacturing sites and logistics hub, such as:

  • the introduction of the new eco-sustainable galvanization technique in Luxottica’s manufacturing sites in Dongguan (2014) and Agordo (2016), researched and adapted by Luxottica for the specifics of eyewear production. It is an integrated water treatment and recycling system used to turn all three phases - washing, nickel-plating and finishing – into a continuous linear flow. This system fitted with a purification plant that allows the water to be reused in the process;
  • nstallation, started in Italy at the end of 2018, of closed-circuit water systems in the galvanizing plants and in painting processes inside the other Group sites dedicated to the processing of metal in Italy;
  • installation and continuous improvement of the consumption measurement system and valves to optimize consumption based on processes.
  • In 2019 Luxottica will further pursue water consumption optimization and improvement actions, and the roll-out of closed-circuit water systems inside the other Group sites dedicated to the processing of metal in Italy.

WASTE TREATMENT

In line with the Group’s policy concerning the overall reduction of the environmental impact along the value chain, in 2016 and 2017 a waste water treatment system was installed at the Agordo site in order to reduce the quantity of waste produced, which led to a reduction in the total quantity of waste produced in 2017.

Disposed and recovered wastei(a)

In 2018 Luxottica applied the same methods of punctual collection and weighing even where local legislation does not require to monitor and declare the weight of non-hazardous waste, starting from the Dongguan site.

This decision is part of the implementation of the environmental management system required to receive the ISO 14001 certification for the sites in Dongguan, Foothill Ranch and Atlanta.

The application of this new methodology, instead of the estimate made in relation to the previous years 2016 and 2017, allowed to:

  • measure with greater precision the quantity of waste generated in the course of 2018 and to correctly define the quantity of hazardous waste and non-hazardous waste according to the classifications indicated in the laws of the countries in which the Group operates. Hazardous waste represents around 54% of the total in 2018 compared to 61% in 2017;
  • identify a higher number of waste types, which may have a different destination other than disposal. The quantity of waste recovered or recycled rose by approximately 2,000 tons (+26% from 2017) and represents 23.9% of the total waste generated by the Group’s activities.

The increase in the total amount of waste generated by the Group’s activities (+13.8% from 2017) is mainly due to the higher quantity of non-hazardous waste that have been identified in Luxottica’s facilities in Dongguan as an effect of the new method applied in 2018.

The waste per frame generated by Luxottica’s manufacturing and logistics sites in Italy improved by 2%. No significant accidental leaks took place in the Group’s facilities in 2018.

(a) The breakdown between disposed and recovered/recycled waste is not available for the Foothill Ranch site

(a) The representation of the waste generated by the Group's activities has been updated during 2018 to ensure the full compliance with the requirements of the GRI Standards (GRI 306-2). Waste also referred to the years 2017 and 2016 have been reclassified to show the disposal method of hazardous waste and non-hazardous waste.
(b) In 2016 and 2017 this figure was estimated for some types of waste and some geographies, such as China and the US, where the legislation in this area is different. For the Chinese sites the figure was estimated on the basis of the average volume of waste transported and the number of journeys made by waste transportation vehicles. From the end of 2017, Luxottica has chosen to apply methods of punctual collection and weighing even where local legislation does not require to monitor and declare the weight of non-hazardous waste.
(c) With reference to the Atlanta Service Center, as the information is not available for the years 2016 and 2017, but only for the year 2018, it was decided not to include the data in the table, thus ensuring the right temporal comparison. The information on the waste generated in 2018 by the activities of the hub in Atlanta is contained instead in the table on 2018 consolidated environmental data, at the end of the chapter. The waste generated by the logistics hub and the laboratory for the production of ophthalmic lenses in Atlanta are not objectively divisible and since the waste is mainly produced by the laboratory, they are imputed in their entirety to the latter.