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Celeste’s Carbon Footprint
 
Celeste Funds Management Limited (Celeste) believes climate change is happening and that the overwhelming volume of scientific evidence suggests that it is due to man made activity (see here).
 
Celeste believes that climate change has the potential to impact on the intrinsic value of the companies we invest in.
 
Celeste encourages all listed companies to quantify and report their carbon footprint, with this engagement process assisted by our membership of the Investor Group on Climate Change (IGCC) and via the Carbon Disclosure Project (CDP), especially amongst the S&P/ASX 200 Index companies.
 
Celeste expects that over time companies will need to comment on the potential risks that climate change presents to their business, and what strategies they have in place to reduce their contribution to climate change.
 
Celeste Funds Management believes that quantifying and disclosing its carbon footprint is a positive step forward and hope, that over time, initiatives of this nature increasingly become the norm across the corporate sector and investment community.
 

 How do we calculate it?

The two most carbon intensive activities of Celeste include air travel and electricity consumption. We are using the Climate Friendly website (www.climatefriendly.com) to calculate our CO2 emissions. In each instance we have opted for the “Gold Standard” for our offsets. 
 
Another, though much smaller overall contribution arises from taxi rides. For this calculation we added the dollar value of all our taxi fares during the year and then attempted to convert it into an equivalent carbon footprint. This calculation is far less reliable than for electricity and flights, but it is also of much smaller order of magnitude.
 
At this stage, we have not determined carbon emissions from paper use and general office waste, as these calculations are unreliable and the actual contribution to emissions is negligible. We do mostly use recycled copy paper and in turn recycle most of the paper that is used in our office.
 
We note that all five of our full time staff travel to work by public transport and emissions arising from this travel are not included in our calculations.
 
To allow for emissions we can not easily determine as well as any potential inaccuracies in the determination of our major emissions, we have applied a 20% buffer to our calculations – i.e. we offset 20% more than what we think our actual emissions are.
  



What were our financial year 2013 carbon emissions?

54% of our carbon emissions arose from air travel,
44% arose from electricity consumption, and
2% from taxi rides.
 
Our total 2013 emissions amounted to 35.5 tonnes of CO2. As mentioned above, we offset 20% more than this amount – i.e. 42.6t tonnes. The total cost of these offsets was $1,546.02 (i.e. $36.3/t).
 
With steady staff numbers throughout financial year 2013, the average carbon footprint per staff member is determined as 8.52t/person.
  



What were our financial year 2012 carbon emissions?

52% of our carbon emissions arose from electricity consumption,
46% arose from air travel, and
2% from taxi rides.
 
Our total 2012 emissions amounted to 27.8 tonnes of CO2. As mentioned above, we offset 20% more than this amount – i.e. 33.3 tonnes. The total cost of these offsets was $1,208.79 (i.e. $36.3/t).
 
With steady staff numbers throughout financial year 2012, the average carbon footprint per staff member is determined as 6.66t/person.
  



What were our financial year 2011 carbon emissions?

51% of our carbon emissions arose from electricity consumption,
45% arose from air travel, and
4% from taxi rides.
 
Our total 2011 emissions amounted to 31.9 tonnes of CO2. As mentioned above, we offset 20% more than this amount – i.e. 38.3 tonnes. The total cost of these offsets was $1,377 (i.e. $35.9/t).
 
With steady staff numbers throughout financial year 2011, the average carbon footprint per staff member is determined as 7.66t/person.
  



What were our financial year 2010 carbon emissions?

76% of our carbon emissions arose from electricity consumption,
23% arose from air travel, and
1% from taxi rides.
 
Our total 2010 emissions amounted to 32.9 tonnes of CO2. Again, we offset 20% more than this amount – i.e. 39.5 tonnes. The total cost of these offsets was $1,388 (i.e. $35.2/t).
 
Due to staff numbers changing materially in 2010 it was not possible to calculate the emissions per employee for 2010.

 

Comment: Disappointingly, our 2013 carbon footprint increased over 2012. The biggest increase was due to a higher number of flights compared to 2012. As noted previously, this figure can be volatile and given our type of business, is to some extent unavoidable. However, we are cognisant of the impact of air travel on our carbon footprint and remain committed to both reducing it wherever practicable and to offset it where this is not possible. Despite implementing further energy saving initiatives during the year, our electricity consumption also increased by 8.6%. It remains 28% below our 2010 consumption level and is also below our 2011 usage.

Our carbon footprint for the 2012 financial year was lower for all three components that we include - air travel, electricity and taxi fares. The air travel variance from 2011 to 2012 was mostly due to 3 fewer return flights to Melbourne. We caution that this can swing the other way, given the large impact that flights have on our overall carbon footprint. Pleasingly, our electricity consumption was over 10% lower in 2012 vs 2011.

While there has been little movement in our overall carbon footprint between 2010 and 2011, its composition in 2011 has changed significantly compared to 2010. A reduced office footprint saw our electricity consumption 27% lower than in 2010. However, emissions from air travel increased 38% year on year. This was due to both more and longer flights being undertaken in 2011 compared to 2010. Celeste often has the opportunity to arrange meetings in our Sydney office. However, we are a fundamental research driven fund manager. We believe that for research purposes it is often essential to visit a corporate head office or operational facility. A flight to say Western Australia also typically does not involve a single company visit, but rather carefully planned multiple company contacts. The contribution from taxi rides increased both due to more taxi travel and even more conservative assumptions in the calculation of emissions from taxi rides.


What are our future intentions with respect to our carbon footprint?

Celeste will annually attempt to measure its carbon footprint, and make this data available on our web site. Whilst we have not set an annual emission reduction target we believe that measurement and definition are critical steps, and should allow us, over time, to reduce our emissions. Whilst we continue to evolve our carbon footprint initiatives we will continue to offset our annual emissions (refer to 2011 offset certificate here, 2012 offset certificate here, and 2013 offset certificate here), with the methodology applied made available on our web site.