Corporate Carbon Offset Policy

Introduction

Climate change is already having a visible impact on the environment and communities around the world. The past decade was the hottest ever recorded, bringing heatwaves and droughts. In addition to rising temperatures, climate change has led to more severe and frequent extreme weather events such as floods and intense typhoons. Sea level rise threatens to displace populations in low-lying areas and floods downtown areas of coastal cities.

The deep interconnectedness of the global economy also makes us vulnerable to transition risks that may disrupt supply chains.  

As one of the top global logistics companies, Kerry Logistics Network Limited (“KLN”) is in a unique position to champion responsible business practices and environmental stewardship. We recognise climate change is the most pressing issue confronting humanity and we must all play a part in reducing temperature rise. It is critical to ensure long-term value for our stakeholders by prioritising sustainability. Therefore, KLN has committed to achieving net-zero from operations and value chain by 2050. This Carbon Offset Policy represents a key step in our pathway towards that net-zero goal.

 

About the Policy

This Carbon Offset Policy (the “Policy”) governs KLN’s approach to carbon offsetting and the procurement of verified carbon credits. It represents part of our broader, holistic strategy to reduce the impact of our operations on the climate. At present, the Policy focuses on carbon credits generated from project-based activities, from which the vast majority of carbon credits are sourced.

The Policy was developed and last updated in December 2021. KLN will review the Policy periodically to ensure that it remains up to date and aligns with international standards and industry best practices.

The Policy adheres to the following carbon management hierarchy:

  1. Avoid: We show preference for business decisions and actions that lead to avoid greenhouse gas (GHG) emissions, to minimise the need for offsets in the first place.
  2. Reduce: Where emissions cannot be avoided, we seek to reduce our emissions through the improvement of energy efficiency and conservation.
  3. Compensate: Where we cannot avoid or reduce emissions, any offsetting activity taken to neutralise the remaining emissions should be realised through the procurement of high-quality carbon credits from accredited registries.

 

Carbon Offset Procurement Criteria

KLN has developed a set of robust criteria to guide us in identifying and procuring high-quality carbon credits to offset the remaining emissions in our value chain. We apply the following criteria and standards when selecting projects to invest in:

  1. Real: Carbon offsets represent real emission reductions or removals that have already occurred (not projected to occur in the future).  
  2. Additional: Emission reductions or removals are in addition to what would have occurred otherwise (without the financial incentives provided by revenue generated by offset sales). 
  3. Based on realistic and credible baseline: Carbon credit should be issued against a defensible, conservative estimated emissions baseline that assumes a “business as usual” trajectory (i.e. emissions without the implementation of the emissions reduction, avoidance or removal project). Baseline should be recalculated on a regular, conservative time frame.
  4. Measurable: Emission reductions or removals generated from the offset projects can be accurately quantified. 
  5. Verifiable: Emission reductions or removals are verified by an independent auditor against an established protocols or methodology.
  6. Permanent: Carbon offset projects have established approaches to lower the risk of reversal and emissions are compensated in the event of non-permanence.
  7. Minimised leakage: Leakage happens when emission reductions occurring within the boundary of the project result in emission increases elsewhere. Carbon offset projects should demonstrate that any leakage is minimised and accounted for as a result of the project activity. 
  8. No double-counting: Emission reductions and removals should not be used more than once to achieve climate targets or goals. There should be no double issuance, double use, and double claiming with international mitigation targets.
  9. Co-benefits: Carbon offset projects may generate positive environmental and social benefits beyond reducing or removing emissions. Examples include reducing air pollution, supporting poor communities, improving public health and well-being. These co-benefits are often good communication tools for stakeholders.
  10. Do no net harm: Carbon offset projects have established approaches to identify related environmental and social risks and taken actions to avoid significant harm and to mitigate associated harm. 

The criteria are informed by international standards set by accredited registries.

As a global logistics company, KLN prioritises carbon offset projects that contribute to both environmental and community benefits, particularly for low-income or vulnerable communities. These projects should ideally quantify the positive social impact that they have on communities.

 

Transparent Reporting

KLN commits to reporting our carbon offsetting activities transparently through our sustainability report. To request information on our carbon offsets, please contact us at sustainability@kln.com.

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