At Falabella we manage our environmental impact throughout our value chain, and we recognize that carefully using raw materials, energy and water is central to achieving a sustainable business in harmony with our planet. Our business units are committed to establishing strategies that mitigate their carbon footprint and that anticipate and mitigate the risks and opportunities arising from climate change.
This commitment is embedded in our Environmental and Climate Change Policy, where we recognize that respect for the environment and compliance with environmental regulations are fundamental business drivers, while we reduce any adverse impacts on the environment. We encourage the rational use of water, energy and natural resources in our business and value chain, which requires implementing best operational practices and strategic alliances that serve the entire company.
Our Environmental and Climate Change Policy can be found here.
Climate Strategy
Climate change is one of the greatest threats to our planet. Therefore, a priority with our sustainability strategy is Climate Action, which mainly aims to reduce our greenhouse gas (GHG) emissions in line with national and international commitments.
It is important that our business units collaborate on this challenge, in order to take advantage of any potential synergies that may reduce our carbon footprint. We built an initial corporate baseline during 2021 using uniform calculation methods and independent auditors, with the aim of identifying our greatest impacts as a group and consequently our climate strategy.
This baseline represents the benchmark for measuring our performance during the transition to a carbon neutral business.
"As a company we are committed to developing initiatives that benefit our customers and mitigate the impact of our business, where a fundamental objective is reducing our carbon footprint. At Falabella we believe that everyone must be involved in this change, based on our commitment to the environment.”
Andrea Gonzalez, Strategy and Sustainability Manager, Falabella S.A.
What is a carbon footprint
It is a quantitative measure of the greenhouse gases that are emitted by an organization. It measures the six greenhouse gases identified by the IPCC in the Kyoto Protocol:
- Hydrofluorocarbons (HFCs)
- Sulfur hexafluoride (SF6)
Each gas has a different global warming potential, so an emissions inventory is reported using carbon dioxide equivalent units. The standard reporting unit is CO2 equivalent tonnes (tCO2e).
An organization's emissions are segregated into three scopes, depending on how much it can control its emissions. These are:
Scope 1: Emissions produced directly by the company's own machines burning fuel. They can be fixed machines such as boilers, stoves, generators, etc., or mobile machines such as cars, cranes, trucks, etc.
Scope 2: Emissions produced indirectly by burning fuel to generate the electricity supplied to the organization. For example, the emissions generated by thermoelectric plants.
Scope 3: Emissions produced indirectly either upstream in the organization’s supply chain or downstream to its target markets.
Our carbon footprint has been measured in accordance with the GHG Protocol for our department stores, home improvement stores, supermarkets, financial services and shopping centers in Chile, Peru and Colombia.
Our principal climate change mitigation measures
Sustainable Construction
Construction and operating standards should be based on objective design, architecture and engineering factors, in order to improve the environmental performance of constructions. The infrastructure department at Falabella builds the group's real estate projects, such as stores, distribution centers and offices, to support business growth. We minimize the environmental impact of each new construction, expansion and remodeling, and we design healthy, safe and comfortable facilities.
Our sustainable construction principles:
- Use building materials with a lower carbon footprint and encourage waste recycling during construction.
- Design buildings with good thermal and lighting performance to reduce energy requirements.
- Install very energy efficient equipment within our facilities, such as air conditioning and lighting, and use efficient faucets and systems that responsibly control the use of valuable water resources.
- Designate areas and install suitable equipment for waste segregation and transportation.
- Select ventilation, natural lighting and safety conditions that optimize the well-being of people inside our buildings.
Across the region Falabella has 45 Falabella Retail, Sodimac and Tottus stores, five Mallplaza shopping centers and two distribution centers that are LEED (Leadership in Energy & Environmental Design) certified, as developed by the US Green Building Council (USGBC) who promote sustainable construction and development. Our Falabella Retail and Sodimac subsidiaries in Chile are founding members of the Chile Green Building Council, their local representative.
"Construction is responsible for 40% of global GHG emissions, and yet this industry has the greatest transformation opportunity to align itself with the SDG, to become resilient and low-carbon through innovative strategies that contribute to climate change mitigation. We need the leadership of companies like Falabella to accelerate these changes, as they have focused their business on implementing best practices that convert their facilities into places that protect human health, reduce their environmental footprint and promote a circular economy. They have used various initiatives to promote the importance of making sustainability fundamental to their business and extending this spirit throughout their value chain.”
María Fernanda Aguirre, Executive Director, Chile Green Building Council.
Renewable energy consumption
At Falabella we have achieved significant progress with decarbonizing our energy matrix through electricity agreements that supply electricity from certified renewable sources to those facilities with technical feasibility in the region.
Renewable energy represents an opportunity to mitigate climate change that is universal across all our business units. Accordingly, we signed a fully renewable energy supply agreement in 2021, which will supply 151 facilities in Chile and 93 in Peru, and covers most of the demand from the facilities occupied by Falabella Retail, Sodimac, Tottus, Ikea, Open Plaza and Mallplaza. We therefore expect to reduce our GHG emissions by around 261,000 tons of carbon dioxide per year.
Efficient energy and water use
We encourage the rational use of energy at all our facilities, including administrative offices, stores and shopping centers, while ensuring that our customers and employees are comfortable. This requires centralized control systems and efficient climate and lighting equipment that optimize energy performance. Our stores and shopping centers have passive design features that reduce their climatic energy requirements, which take advantage of natural light and involve construction materials with good thermal performance.
| Energy consumption by source[MWh] | 2019 | 2020 |
| Non-renewable electricity | 669,492 | 503,111 |
| Fossil fuels | 52,342 | 66,089 |
| Renewable electricity | 532,418 | 282,141 |
| Total energy consumption | 1,254,252 | 851,341 |
Responsible water use is very important for operating Falabella’s shopping centers and distribution centers, as this resource is intensively used due to the number of people within these facilities.
Our consumption of this valuable resource has been reduced by migrating to efficient faucets, implementing water consumption monitoring systems in bathrooms, and landscaping our stores.
Our Mallplaza shopping centers use low-consumption plant species and native plants from each region in our gardens and green walls, where we also recycle the liquid nutrients from our biodigesters.
Our Huachipa distribution center for Tottus in Peru installed three wastewater treatment plants that produce more than 150 cubic meters of water per day, which is used for ornamental irrigation within the center.
Our Open and Mallplaza shopping centers are conducting water footprint measurement pilots, including both direct and indirect consumption that involves the value chain at these locations.
| Water source [m3] | 2019 | 2020 |
| Municipal drinking water | 6,722,446 | 4,462,620 |
| Surface sources such as rivers, canals, etc. | 53,281 | - |
| Underground sources such as wells | 514,237 | 293,026 |
| Total water consumption | 7,289,964 | 4,755,64
|
Transportation and electro-mobility
A significant proportion of our emissions are generated by the products we sell, followed by those associated with the logistics that supply our stores and deliver to our customers' homes. This is explained by burning fossil fuels, such as gasoline or diesel, in the company's own or outsourced fleet vehicles. Accordingly, we have implemented a last-mile strategy across our business units, which includes electric vehicles that can reduce our greenhouse gas emissions by up to 78%.
Sodimac in Chile is the first company to make all last-mile deliveries carbon neutral. The company has 15 electric last-mile and in-store supply vehicles for this purpose, and has installed charging points at its main distribution center. The goal is to finish 2022 with 24. This strategy is complemented by emissions offsetting using internationally registered carbon credits and this process has been certified by the Santiago Climate Exchange. We have used offsets to reduce our carbon footprint by 25% over the last three years.
Falabella.com has also adopted similar measures and currently operates 29 electric vehicles of various sizes including automobiles, trucks and tricycles. They expect to add another 43 vehicles during 2022, bringing the total to 72. Deliveries using these vehicles cover a limited number of cities in Chile at the moment, with the aim of expanding to other Chilean cities in the future. Falabella.com is encouraging all its carriers to operate at least one electric vehicle by the close of 2022.
Various alliances have been developed to install electric vehicle charging points at our facilities, in line with the company's aim to make life more straight-forward and enjoyable for its customers and employees, We announced a plan for Chile in 2021 together with Enel X, involving Falabella Retail, Sodimac, Tottus, Ikea, Open Plaza and Mallplaza, which involves setting up and operating charging centers for electric vehicles at stores, malls and distribution centers throughout the country. Customers and logistics operators will then be able to charge their vehicles at Falabella group facilities. We expect to install 72 electric chargers by 2022, which altogether would reduce vehicle emissions by 142,915 tons of CO2 per year when compared to emissions by conventional automobiles. This collaboration will form the largest network of electric charging points at shopping centers in Chile and it will gradually begin operating from December.
Check out some of our initiatives!
Falabella.com's Omnichannel Distribution Center in Chile is LEED Gold certified, due to LED lighting that uses an automatic energy-saving control system, skylights that take advantage of natural light, and 30 solar panels that provide 29% of its energy requirements. Its low-consumption faucet system saves 42% in water consumption. It has recycling areas, 8,140 m2 of green areas and bicycle racks. Furthermore, 30% of the materials used during construction and 96.5% of the waste generated at the site was recycled.
Falabella Retail's new store at Parque Arauco in Chile is requesting LEED certification and 95% of the waste generated from the store's construction was recycled. The building also has efficient air conditioning and ventilation equipment, its systems save 45% of water consumption and are energy efficient. The building will be used for educational purposes after it has opened, and it will have informative totems for customers to discover more about Falabella's commitment to sustainability.
Sodimac has 52 facilities in Chile with photovoltaic systems. It has added a solar panel farm over the parking lots at its head office in Renca, one of the largest private farms in the country.
Risks and opportunities arising from climate change
The global challenges associated with climate change not only require an analysis of the company's impact on the environment, but also of the threats and opportunities arising from climate change that may affect the performance of the company and its value chain.
Therefore, we have signed up as a Supporter of the Taskforce on Climate-related Financial Disclosures (TCFD) and have begun to integrate its recommendations into our corporate risk management system. This has begun universally across all our business units covering Chile, Peru and Colombia.
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