Carbon & Fuel Reduction Panel Retail Industry Leaders Association Sustainability Conference. Jim Cornwell Senior Director of Design and Construction

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1 Carbon & Fuel Reduction Panel Retail Industry Leaders Association Sustainability Conference Wednesday, September 24, 2008 Jim Cornwell Senior Director of Design and Construction

2 TOPICS Why reduce carbon? What results has Office Depot achieved? Where does Carbon Reduction fit into Office Depot s Overall Green Strategy How we measure our carbon footprint Example initiatives that help reduce Carbon

3 WHY REDUCE CARBON? Using electricity and burning fossil fuels results in greenhouse gas emissions such as Carbon Dioxide id (CO2) that t trap heat in the atmosphere and cause temperatures to rise. This rise in temperature is global warming - which causes climate change, which results in sea-level rise, droughts, weather events

4 THE GOOD NEWS (OR BAD) Using Electricity & Burning Fossil Fuels Costs Money

5 THE OPPORTUNITY Saving Electricity & Saving Fossil Fuels: (i.e. REDUCING CO2) Can save Money

6 THERE IS A CONTINUUM OF COST IMPACTS WHEN REDUCING CARBON Lower Initial Cost Higher Initial Cost Lower TCO / Operating Cost Higher Initial Cost Lower TCO/Repurchase Cost Price Parity Higher Purchase Cost Example: Examples: Examples: Examples: Examples: Load Shedding Route Optimization T5 lights Energy Management Daylight harvesting Plug n Play Electrical, Energy Star Technology Fuel efficient Vehicles Solar Heat Reflective Surfaces

7 FACILITIES ENVIRONMENTAL RESULTS 10.1% Absolute Reduction in CO2 Emissions from NA Stores and Warehouses (05-06) Notwithstanding 4.5 % growth in Square Feet under management.

8 FACILITIES ECONOMIC RESULTS 66 million kwh Avoided d Electricity it $6.2 Million Avoided Electricity Costs

9 SUPPLY CHAIN ENVIRONMENTAL HIGHLIGHTS 96% 9.6% Absolute Reduction in Carbon Dioxide Emissions from Transportation in North America between 2006 and 2007

10 WHY GREEN FOR OFFICE DEPOT? Prepare for Emerging Needs & Risks Ensure a Customer- Focused Assortment & Walk the Talk Reduce Long Term Operating Costs Grow Green Sales in All Channels Promote & Protect the Office Depot Brand Why Green? Buy Be Sell Green Green Green Tell Green

11 WHERE DOES CARBON REDUCTION FIT INTO OFFICE DEPOT S OVERALL GREEN STRATEGY? Why Green [Set Foundation] Buy Green Be Green Sell Green Tell Green [Engage Stakeholders] Establish Green Policies & Goals Source green office products for resale Merchandising Reduce waste and recycle materials Construction, Facilities & Supply Chain Deliver innovative green solutions contract BSD Sales & Marketing Engage External Stakeholders in Environmental Programs Define Responsibility for Policy Implementation Buy paper from certified well managed forests Paper Merchant/ Print Product n Reduce energy and greenhouse gases - facilities Construction, Facilities& Supply Chain Deliver innovative green solutions for web customers BSD Online & Ecommerce Engage & Train Associates in Environmental Programs Implement Environmental Management Systems Buy green office products for internal use Internal Proc & Office Admins Reduce fuel and greenhouse gases from delivery of goods Transportation Deliver innovative green solutions at retail Retail Merchants& Store Ops Annually Report on Environmental Programs Accountability in environmental team Accountability in functional area

12 HOW DO WE MEASURE OUR CARBON FOOTPRINT? 1. CAPTURE ELECTRICITY AND NATURAL GAS BY SITE

13 HOW DO WE MEASURE OUR CARBON FOOTPRINT? 2. TRACK STATE BY STATE EMISSIONS WITH ADVANTAGE IQ 3. CONVERT TO METRIC TONS OF CO2 EQUIVALENT

14 HOW DO WE MEASURE OUR CARBON FOOTPRINT? 4. WORK WITH US EPA SMARTWAY TRANSPORTATION PARTNERSHIP TO ESTIMATE EMISSIONS FROM DELIVERY

15 LOWERING CO2 BY CONVERTING TO FUEL EFFICIENT VEHICLES, REDUCING IDLING AND REDUCING DRIVING OD t H b id Alt f l hi l b t ARE 40% OD vans are not Hybrids or Alt. fuel vehicles, but ARE 40% more fuel efficient, helping drive a 9.6% drop in CO2 in 1 year

16 McKinsey 2007, Reducing US Greenhouse Gas Emissions: How much at what cost

17 Focus on Construction LEEDership in Store Design

18 HID LIGHTING (BEFORE)

19 T5 LIGHTING (AFTER)

20 AUSTIN, TX THE FIRST US GREEN BUILDING COUNCIL LEED PRE-CERTIFIED RETAIL PROTOTYPE Show Video

21 US GREEN BUILDING COUNCIL LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN (LEED) CERTIFICATION

22 US GREEN COUNCIL LEED VOLUME CERTIFICATION

23 AUSTIN, TEXAS SITE

24 AUSTIN, TX SITE (CONTINUED)

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29 PARTING THOUGHT WE ALL HAVE A LONG WAYTO GO! A carbon footprint t is a sum of accumulated carbon Estimated average for US resident: 20 metric tons. Estimated average for the world (US included): 4 metric tons. Source: Science Daily, 2008