Brambles Environmental Policy is available on its website.

Environmental policy is set by the Board. Responsibility for the implementation of the policy is with the Executive Leadership Team, which is assisted by the Sustainability Committee. The Environmental Policy is communicated to all employees.

Brambles holds regular meetings with relevant regulatory bodies, government and non-government organisations, and also conducts customer and supplier surveys and consultation forums. Representatives of Brambles' businesses attend and participate in local industry environmental issues and working groups.

Each Brambles business operates its own environmental management systems which are monitored by the Group Risk Committee. The Group Presidents of CHEP and the Group President and Chief Operating Officer of Recall have operational responsibility for environmental management. Senior managers are required to provide a statement on environmental compliance twice each year. Each business also prepares regular environmental compliance reports for the Group Risk Committee and the Board.

While some operations are ISO 14001-certified, including CHEP European automotive container service centres and pallet service centres in the UK and Spain, Brambles is no longer expanding the number of certified sites. Brambles is focused on improving the environmental management plans for each site to ensure compliance with the principles of its Environmental Policy. Periodic audits are conducted to evaluate compliance.

Business units may from time to time operate environmental incentive programs. For example, CHEP USA launched a hybrid vehicle incentive program in May 2008. Under the program, employees are eligible to receive US$2,000 if they purchase an environmentally friendly vehicle, such as a hybrid car or truck.

During the year CHEP USA received Supply and Demand Chain Executive magazine’s ‘Green Supply Chain’ Award, which recognises organisations that are taking steps to realise green goals. CHEP was also recently featured in a logistics focused segment of the television series Sustainable Planet.

CHEP Europe continued to successfully deploy its environmental impact and benefits calculator, developed in conjunction with Leeds University. The calculator demonstrates the environmental benefits of using CHEP’s pooling model to existing and prospective customers, which has helped prospective customers decide to join the CHEP program.

Potential future costs of environmental regulations are factored into capital expenditure proposals, in accordance with their estimated likelihood of eventuation. Brambles environmental emissions are a relatively small component of its operations and investment decisions.

* CO2-equivalent (CO2-e) is the universal unit of measurement to indicate the full global warming potential (GWP) of a particular greenhouse gas emission. It takes into account the GWP of each of the six Kyoto greenhouse gases, and expresses them in terms of the equivalent units of carbon dioxide. It is used for measuring and reporting different emissions sources on a common basis. At the corporate level, CO2-e is typically reported in kilotonnes (kt).

CHEP and Recall continually work to optimise networks and automate processes to improve plant capacity and make them more energy efficient. Network optimisation reduces transport distances and associated emissions. CHEP’s Total Pallet Management (TPM) program offered to major manufacturers and retailers allows CHEP to manage all of a customer’s pallet needs on-site and supply CHEP pallets without the need for additional transport. Customers’ use of the TPM program help optimise the network and reduces the energy requirements associated with the pallet pool.

Network optimisation focuses on the number and location of service centres based on, sourcing requirements and locations, location of manufacturers, transport costs and plant capacity. For example, CHEP Europe employs a central planning team to address these issues across the whole of Europe.

Recall SDS performs route optimisation. This has resulted in fewer large secure destruction centres and more depots that send material on to the centres. By increasing route density, not only are operations consolidated but emissions per tonne of paper shredded and recycled are reduced.

Recall ensures purpose-built, state-of-the-art megacentres address energy efficiency and other environmental initiatives in the building’s design.

Like most businesses Brambles impacts on climate change through the consumption of energy, which entails the burning of fossil fuels.

However, Brambles has a relatively light greenhouse gas (GHG) emissions footprint. For instance in Australia, Brambles is not obliged to report under Australia’s new National Greenhouse and Energy Reporting (NGER) scheme, which came into effect in the 2009 financial year.

Although Brambles' GHG emissions footprint is light, it recognises the need to improve its processes in capturing GHG data and during the year it undertook a standardised and improved process for GHG reporting.

Third party industry advisors were engaged to guide the use of the most appropriate and accurate measurement protocols and externally review Brambles’ methodology.

As a result, Brambles has improved the completeness and accuracy of GHG emissions data. This was achieved through the provision of additional and consistent guidelines for the estimation of GHG emissions.

The improved process uses globally accepted conversion and emissions factors:

• The World Business Council for Sustainable Development and the World Resources Institute’s GHG Protocol conversion and emissions factors for fuel and gas consumption across all global operations;
• The National Greenhouse Accounts (NGA)* emissions factors for electricity consumption of all Australian operations;
• The Energy Information Administration (EIA)** emissions factors for electricity consumption of all US operations; and
• The International Energy Agency (IEA) *** emissions factors (as prescribed by the GHG Protocol) for electricity consumption for all other global operations.

In previous years Brambles used GHG protocols from government bodies wherever available. GHG emissions were calculated from energy purchases in accordance with government-published averages per unit of energy consumed.

Brambles did not report energy data for Scope 1 (direct purchases of fuel, eg company owned transport or heating) and Scope 2 (indirect energy purchases, eg electricity) GHG emissions prior to this year.

Due to the improvement in collection methods there are differences between data reported for this financial year and previous years. However, this methodology will be used for all future reporting, giving a standard and robust base for energy efficiency improvements and initiatives.

CHEP prefers the use of and actively sources heat treated lumber for its pallets when required, as opposed to the use of ozone-depleting methyl bromide (MB). This is in accordance with Brambles’ corporate values, its customers’ priorities and the MB phase-out requirements set forth in the Montreal Protocol and Clean Air Act. MB has been designated a Class 1 ozone-depleting substance and a Class 1 acute toxin.

Brambles’ global GHG emissions 2009

In 2009, Brambles GHG emission and energy use intensities increased due to a number of factors, namely:

• an improvement in data collection and analysis in the current year compared to previous years; and
• Recall USA’s decision to scale back on the subcontracting/outsourcing of couriers transporting documents. In-house couriers are running longer routes and servicing broader geographic areas.

Brambles notes that, because its GHG emissions footprint is so light, even small changes in its operational activities can have a relatively large impact on the intensity measures.

* National Greenhouse Accounts (NGA) Factors (Nov 2008) - National Greenhouse and Energy Reporting (Measurement) Determination 2008 (Schedule 1)

** Energy Information Administration, Updated State- and Regional-Level Greenhouse Gas Emission Factors for Electricity (March 2002)

*** International Energy Agency Data Services. 2007. "CO2 Emissions from Fuel Combustion (2007 Edition)". (CO2 Emissions per kWh from Electricity and Heat Generation)

Compared with disposable pallets, pallet pooling significantly reduces the use of resources and waste – an estimated seven million tonnes a year of waste savings for its customers in the USA alone.

CHEP’s business model is based on the principles of reduce, reuse and recycle:

REDUCE: Pallet pooling reduces burdens on the world’s lumber supply and waste streams through responsible use of wood in products that are designed for repeated use and greater supply chain efficiency, an example of source reduction. Decreased pallet-related product damage with the CHEP pallet design further reduces environmental burdens and contributes to the success of other supply chain packaging reduction initiatives.

REUSE: A key economic element of pallet pooling is to deploy higher quality platforms that can be reused extensively. Continuous inspection, maintenance and repair further prolong the useful life of pooled pallets.

RECYCLE: Controlled end of life management and a clear sense of ownership help to ensure wood recovery, reuse and recycling efforts are maximised to keep waste out of landfills.

In the US, an average CHEP pallet contains between 12-37% recycled content, depending on the age of the pallet, and approximately 35% of lumber is reused in pallet repairs before being recycled.

CHEP USA has developed a website that enables customers to calculate how much they can reduce solid waste, GHG emissions and energy consumption by using the CHEP pallet pooling system instead of alternative shipping platforms, such as white wood or disposable pallets. The environmental calculations generated by the website are based on a comprehensive Life Cycle Inventory Analysis conducted on CHEP USA’s pallet pooling system in 2006. A copy of the analysis can be found on the website.

The life cycle environmental savings created by members of the CHEP USA pooling program in financial year 2009 amounted to approximately:

• 1.1 billion kilograms of solid waste (a 95% reduction compared to using one way pallets); 
• 7.8 trillion British Thermal Units (BTUs)* of energy (enough to power over 200,000 homes for a year); and
• 590 million kilograms of GHG emissions.

Findings of the report included a quantified analysis of waste associated with the life cycle of pallets in the pooled system. Waste per 100,000 pallet trips was less than 50,000 pounds, compared to over one million pounds of waste generated by non-pooled one-way pallets.

In Europe, CHEP has worked with Leeds University to develop a similar calculator that demonstrates the environmental benefits of the CHEP pallet pooling system when compared with returnable white wood or disposable pallet alternatives over a 10 year period.

The CHEP environmental calculator is installed on the laptop of every CHEP Europe sales representative, enabling the team to quantify the benefits of CHEP to existing and potential customers.

Unlike CHEP’s pallet pooling system, many other types of wood pallets (without a clear system of ownership and accountability) end up in landfills. CHEP avoids this problem by maintaining ownership of its assets and enforcing a system of controls to ensure that its pallets are recovered and the materials are reused or recycled into other uses at the end of their useful lives.

In addition to its pool of more than 250 million pallets, CHEP also operates a pool of some 40 million plastic containers. The pool provides reusable or returnable plastic containers as a substitute for disposable cardboard packaging used to transport fresh fruit and vegetables.

CHEP actively manages all waste streams related to pallet pooling activities – including wood, corrugate, steel, and plastic.

CHEP minimises the impact of its internal waste generation by ensuring that scrap pallets, containers and crates are recycled.

Waste paint is treated to render it solid, but is then directed to landfill as the better of its current disposal options.

Recall collected, shredded and sent for recycling over 200,000 tonnes of paper last year, which equates to approximately three million trees.

Recall assists its customers in managing their physical and digital documents throughout their life cycles, from creation to secure destruction. Recall believes that it benefits the environment by assisting customers to reduce material usage by providing space- and paper-efficient document archival and retrieval solutions.

All the material used in the production of Recall’s cartons is recyclable. Those cartons are supplied on CHEP pallets, as opposed to one way white wood pallets.

Brambles had no significant spills during the year.

* The British thermal unit (BTU) is a traditional unit of energy equal to about 1.06 kilojoules. It is used in the power, steam generation, heating and air conditioning industries.

Brambles complies with all material environmental laws and regulations applicable to it and its businesses. None of Brambles operations were involved in any significant adverse environmental prosecutions or received significant non-monetary sanctions during the year.

Brambles does not have a regulatory obligation to participate in the EU Emissions Trading Scheme. It does not participate or anticipate participating in any trading schemes within the next two years.

Brambles is cognisant of the requirements of the Australian National Greenhouse and Energy Reporting (NGER) legislation. It did not have any reporting obligations arising from this legislation in the 2009 financial year.

For the year, Brambles operations in Australia generated 33.67 kt CO2-e, or 196.36 TJ of energy. This is well below the NGER first year threshold of 125 kt CO2-e, or 500 TJ of energy.

Water is not a material component for Brambles operations given its low usage and as such, comprehensive data is not collected on its consumption, reuse or recycling.

However, individual sites adopt water-saving practices in accordance with their environmental management systems.

For example, CHEP Australia utilises water recycling and reuse in crate washing plants, within the relevant Hazard Analysis Critical Control Points (HACCP) regulations. HACCP is a standard designed to prevent, reduce or eliminate potential biological, chemical and physical food safety hazards. As part of the FRPCs project to streamline fresh produce delivery to Woolworths’ supermarkets in Australia, CHEP upgraded its crate-washing service centre network with recycling systems that cut water usage and sewer discharge by up to 90 per cent.

The Board is responsible for the establishment and review of the effectiveness of the Group's system of internal control and risk management. This includes consideration of climate change risks. The Brambles Sustainability Committee and the Executive Leadership Team help to formulate sustainability policies (including those impacting climate change) and the Group Presidents of CHEP and Group President and Chief Operating Officer of Recall are responsible for implementing sustainability policies across the organisation.

Brambles shares equivalent risks arising from climate change to those of the business community generally. These include the cost impacts of climate change on energy, water, insurance and transport. Brambles is actively managing its use of these elements and would further expect that cost impacts would most likely be recovered from the marketplace.

Brambles does not consider the company to be exposed to significant regulatory risks related to climate change. Brambles operations generally are not large energy users and as such are not considered likely to be included in current or proposed emissions trading schemes.

Brambles may be exposed to physical risks from climate change. Should over the mid to long term the impacts of climate change prompt the relocation of customers’ operations, or the location of served industry sectors (such as fresh produce), then Brambles would need to consider the most appropriate basis for service continuity to those customers or industries.

Brambles continues to source lumber in accordance with strict lumber sourcing policies. These responsible and sustainable policies support the replenishment of natural resources, with a preference for plantations and state-managed forests with managed forest certifications. These policies are considered effective in managing and mitigating any physical risk arising from climate change.

Regulatory requirements that may result from climate change could present opportunities for Brambles. CHEP offers its customers a sustainable business model through product stewardship and product reuse. The benefits of these products and its business model are likely to become more attractive to existing and potential customers as they address the impacts of energy, packaging and waste regulation on their businesses. The mid to long term possible physical changes arising from climate change may represent 'step change’ opportunities for firms and industries to adopt the shared use of returnable and reusable supply chain packaging solutions offered by CHEP.

For example, global warming and environmental issues are top on the agenda at key CHEP multinational customers in Europe, EU Governmental and Regulatory bodies and institutions. The EU Commission and its 27 EU member states committed to reduce carbon emissions by at least 20% by the year 2020 over 1990 emissions’ levels. The UK Department for Environment, Food and Rural Affairs has set a target of 30% CO2 reduction.

The increased awareness of sustainability issues arising from the emergence of climate change as an essential element of business planning and operations presents the opportunity for the environmental benefits of CHEP’s existing products to be recognised by customers and formally measured using life cycle assessments. CHEP in the USA and Europe currently offers interactive environmental calculators for prospective customers to quantify the benefits of the CHEP products and business model. Equally, it provides an opportunity for collaborative development of new products incorporating environmentally appropriate materials, and incorporating the maximum environmental benefit in their sourcing, design, conditioning and end of life recycling.