Managing environmental impacts and climate change

With the range and scale of environmental impacts varying across the different parts of our business, our operating companies manage their environmental performance at a local level, although under the umbrella of the Thomas Cook Group Environmental Policy.

Implemented in 2010, this acknowledges the importance of environmental management to the long-term success of our business, commits us to minimising our negative impacts and ensures a consistent overall approach across the Group.

Some operating companies have formal environmental management systems, such as the UK airline which is accredited to the international standard ISO 14001 (for more detail, read the Spotlight: environmental management certification page). We are in the process of establishing a database to improve the collection of environmental data across our companies. With more detailed, accurate data, we will be better able to identify examples of best practice and areas for improvement. The database will also enable us to enhance our public reporting and set rigorous reduction targets. We hope to pilot the database in the UK in 2011, before rolling it out to the other business segments. Steps that we are taking to improve data quality in the meantime include the installation of smart electricity metering across our UK retail network, which began in 2010. This will enable stores to assess their individual consumption and monitor the impact of energy-reduction initiatives. We also set minimum environmental reporting standards in 2010: all Thomas Cook businesses were required to provide data on electricity, gas and water use, as well as airline fuel where relevant.

Climate change strategy

Our most significant environmental impact is our contribution to climate change. As an industry whose product is so closely connected with the weather, we recognise the direct impacts that climate change could have on our business. These include reduced water availability in our destinations and shifts in consumer preferences, for mode of travel or for holiday locations. By recognising and adapting early to such shifts, there may also be opportunities for us to grow our business in new areas. We also see opportunities for competitive advantage arising out of climate change regulation, as our airlines are already more fuel efficient than many. Furthermore, we recognise that Thomas Cook Group is a trusted brand, and by taking a responsible approach to climate change we can reinforce our reputation.

The strategy we have developed to manage our contribution to climate change is partly dictated by legislation. This includes:

• The EU Emission Trading Scheme (ETS), which will require airlines to monitor and report their carbon emissions and trade in emission allowances from 2012
• The UK's Carbon Reduction Commitment (CRC) Energy Efficiency Scheme: this emissions trading scheme, which came into force in 2010, covers our UK corporate office and retail premises
• Air Passenger Duty in the UK: a per passenger levy introduced in accordance with the 'polluter pays' approach to environmental protection but criticised by many, including Thomas Cook Group, as being less equitable and effective than a per aircraft duty
• EU Energy Performance Certificates for buildings, which require energy-efficiency measures to be incorporated into the design and construction of our hotels, offices and retail stores. The Directive that introduced Energy Performance Certificates also promotes renewable energy, which is not easily available in some of our destinations.

In addition to meeting these legal requirements, we are taking steps to reduce our carbon emissions and engaging with external organisations to influence policy development and explore cross-industry solutions. Sustainable Aviation, for example, brings together companies from the UK aviation industry that are committed to reducing their contribution to climate change through a strategy comprising eight goals and 34 commitments. Thomas Cook Airlines is a founder member. As a member of Prince Charles' May Day Network, the Group has pledged to reduce our carbon emissions, and to encourage employees to reduce their emissions at home as well as at work.

Within Thomas Cook Group, the main sources of our carbon emissions are Aircraft emissions and Energy consumption, and the practical actions we are taking to reduce them are discussed on these pages. Our airlines have formed a working group that shares carbon reduction ideas, develops common strategy and pays particular attention to the steps we need to take to ensure we can comply with the EU ETS when it comes into force.

We started measuring our Group carbon footprint in 2008/09 and are working to improve the completeness and accuracy of the data we gather year on year. We also submit our data to the Carbon Disclosure Project, the world's largest database of corporate carbon information, as we believe organisational transparency on carbon emissions is an important step in tackling climate change. We support the proposed introduction of mandatory greenhouse gas reporting in the UK.

Progress against our climate change strategy is regularly monitored by the Group Executive Board and the Health, Safety and Environment Committee.