Case Study Reducing the Corporate Carbon Footprint, One Step at a…

Case Study


Reducing the Corporate Carbon Footprint,
One Step at a Time
The Timberland Company is a third generation run outdoor retail company with a rich
history geared towards making product and business better. Boot, brand, and belief are
three words that summarize Timberland's story. The boot, a workman's boot and
Timberland's original product is what Nathan Swartz manufactured by hand when he
started as an apprentice stitcher at the Abington Shoe Company, the forerunner to
Timberland, in 1918. In 1955 Nathan bought the majority share in the company and
welcomed his sons into the business. Sidney Swartz turned the Abington boot into a
brand in the 1960s and 70s when he brought injection-molding technology to the
footwear industry, creating a product that made life more pleasant for hunters, hikers and
construction workers alike. This technology fused soles to the leather uppers without
stitching, producing one of the first truly waterproof boots, and establishing Timberland as a brand internationally.
Belief is what Nathan's grandson, Jeffrey Swartz, brings to Timberland today. It's a belief that commerce and justice go
hand-in-hand or in Jeffrey's own words, "that doing well and doing good are inextricably linked." Timberland's approach
to Jeffrey's challenge is to build and sustain strong communities using three primary strategies: engaged citizenship,
global human rights, and environmental stewardship.

Timberland realizes that manufacturing its products and managing its business have an impact on the environment, and
the company is committed to doing something about it. Climate change poses a particularly alarming threat given the
magnitude and reach of its impacts. Timberland produces greenhouse gas emissions mainly from energy use and waste
at its corporate offices, retail stores, showrooms, and from employee travel, both in the US and in 21 countries around
                                                             the world. Manufacturing activities, which include the
                                                             harvesting of raw materials for products, transportation of
           CASE STUDY SNAPSHOT                               goods, and the finishing of fabrics, leathers and plastics, are
                                                             mainly out-sourced to overseas vendors. These activities
  Projects:                                                  are driven by Timberland, however, and require a significant
       · Corporate wide emission inventory                   amount of energy, which affects the company's bottom-line
       · Facility energy efficiency upgrades                 and produces greenhouse gases that cause global warming.
       · Sustainable LEED certified building
           techniques                                        Timberland's outdoor orientation encourages its customers
       · Transportation management plan                      to be active in nature and in the community. Recognizing the
       · Renewable energy/Green tags                         conflict between product end-use and the impacts associated
                                                             with the business's practices, Timberland set an ambitious
  Funding sources:                                           goal of becoming carbon neutral. To achieve this objective,
  Timberland's capital budget and incentives from            the company enlisted the assistance of a regional
  electric utilities.                                        environmental group that is focused on developing
                                                             innovative solutions to climate change, and educating
  Lessons learned:                                           various stakeholders on the risks and opportunities
  By developing a comprehensive environmental                associated with global warming.
  performance program that evaluates every level of
  business, this world class company has saved               In 2001 the company signed a formal agreement with Clean
  hundreds of thousands of dollars by trimming               Air ­ Cool Planet (CA-CP) to undertake an inventory of its
  energy consumption while reducing the                      green house gas emissions, establish a reduction target, and
  emissions of greenhouse gases at locations in              help educate its suppliers, vendors, employees and
  22 countries.                                              ultimately customers on the economic benefits of taking
                                                             action to address climate change. The partnership would
  CO2 emission reductions: 10,000 tons annually              provide Timberland with access to CA-CP's extensive
                                                             network of contacts in the fields of energy and
                                                             environmental management, to assist the company in
understanding community positions on climate and other issues pertaining to its global operations. As a result of
implementing a variety of energy-efficiency programs at its facilities, and investing in renewable energy Timberland has
dramatically reduced energy bills and, in addition, has cut carbon emissions by approximately 10,000 metric tons of CO2
per year.

Starting Out

Identifying the sources and amount of emissions is the necessary first step in order to identify ways to improve
efficiency, save money, and reduce greenhouse gas (GHG) emissions. Early on in the process with CA-CP it was
determined that the majority of Timberland's GHG emissions are connected to energy use at corporate offices, retail
stores, showrooms and employee travel.

Timberland began analyzing its energy and emissions profile at its largest U.S. facilities in 2001. The rough estimates
produced by the exercise were used to develop long-range goals for facility improvements and sustainable business
practices.

Energy-efficiency projects with fast payback periods were attacked first. The financial and environmental returns were
large, in part due to utility incentives for relighting projects, encouraging an in-depth look into other areas for
improvement. In 2003, Timberland began an extensive inventory of the energy consumed by the logistics, distribution,
and sale of its products. This analysis tracks energy use for the company's corporate offices, showrooms, retail stores,
subsidiaries, and distribution facilities globally. Using the GHG protocol developed by the World Resource Institute
(WRI) to calculate direct and indirect emissions of greenhouse gases, Timberland identified the following sources and
quantities of emissions at its more than 250 facilities worldwide.


                   Facility Type                   Direct                Indirect           Total Emissions
                                                 Emissions              Emissions                 2003
                                                (metric tons)          (metric tons)         (metric tons)

         Offices                                          960.35               2,961.37                3,921.72

         Distribution Centers                             756.06               3,729.40                4,485.46

         Retail                                           254.58               8,237.73                8,492.31

         Employee Transportation                                 -           13,034.37               13,034.37

         Manufacturing                                    332.76               5,248.66                5,581.42

         TOTAL                                          2,303.75             33,211.52               35,515.27




As a result of the exercise, Timberland learned that the majority of its emissions were produced through employee travel,
which annually totaled to more than 25 million miles. Product designers alone travel nearly 20 million miles a year to
meet with overseas manufacturers. While this activity slowed after 9/11, work-related travel is still a prevalent part of
most headquarters and overseas staff job requirements. Improvements in IT infrastructure are reducing the need for
face-to-face visits; the company is also looking to offset those emissions through energy efficiency and renewable
power generation at its facilities.

Programs and Projects

Efficiency
When Timberland started to look seriously at energy conservation measures in 2001, the first big opportunities were not
difficult to identify. Lighting retrofits at the company's corporate headquarters in Stratham, New Hampshire, and
European distribution center in Enschede, Holland, provided large dollar and emission savings. 1,664 T12 lights were
replaced with 1,277 T8 fixtures, skylights and windows were installed to increase natural lighting and parking light
sensors were added, generating approximately 460,000 kWh savings.
Comprehensive audits of Timberland's facilities in the U.S. through an
energy service company recommended by CA-CP identified additional
energy upgrade opportunities with payback periods of less than one year.
Lighting retrofits at Timberland's U.S. distribution centers dramatically
improved the light quality in spaces while reducing energy use by nearly
50%, saving the company thousands of dollars each year and close to 1000
metric tons in carbon emissions


                                 Daylighting at the Enschede distribution center


   Facility                    Project                  Date     Energy                    Carbon Emission
                                                       Completed Savings/year              Reductions/year
   Corporate                  Lighting retrofit        November    314,966 kWh                129 metric tons
   Headquarters,                                       2002
   Stratham, NH
                              Parking light            August                19,929 kWh          8 metric tons
                              sensors                  2002
   Distribution Center        Daylighting              August              160,000 kWh          72 metric tons
   - Enschede, Holland                                 2002
   - Ontario, CA       Lighting retrofit               January           1,011,488 kWh         280 metric tons
                                                       2004
   - Danville, KY             Lighting retrofit        January             782,360 kWh         713 metric tons
                                                       2004
   Global                     Installation of          Spring              237,514 kWh
                              computer sleep           2004                                    108 metric tons
                              mode software


Success from these projects has resulted in more detailed studies of energy use in office and retail operations. In 2003,
Timberland installed a monitor energy savings program that puts computer screens into sleep mode when users are
away from their desks. The effort is saving approximately 237,514 kWh of energy each year. More recently the company
has begun auditing and upgrading energy use at its retail locations, switching out T12 lighting for T8 or better
technologies, and improving lighting design for new stores with simpler, yet more efficient lighting schemes. The U.S.
Green Building Council's LEED (Leadership in Energy and Environmental Design) principles for environmental
performance and sustainable design are now incorporated into all new specialty store construction designs. These
principles call for efficient lighting and air handling as well as recycled content construction materials and water-use
reduction strategies.

Transportation
Energy-efficiency projects have been carried into the transportation side of Timberland's business as well. The
company has joined Businesses for Social Responsibility's Green Freight Program, which promotes sustainable product
transportation by land, air, and sea. The program includes 20 percent of the top 50 U. S. importers, carrying a significant
amount of leverage for implementing changes in the transportation industry. Through its involvement in this effort,
Timberland is identifying opportunities for boosting efficiency and tightening environmental specifications and
guidelines to improve the environmental safety and performance of shipping fleets. One recent project found that
making a simple shipment shift from truck to barge along a Rotterdam to Enschede route resulted in one barge carrying a
load previously hauled by 40 trucks. Modal shifts between 2003 and 2004 are estimated to have saved over 70,000
gallons of diesel fuel -- the equivalent of 650 metric tons of carbon.

Environmental performance is evaluated at every level of Timberland's business -- down to an employee's commute. As
a result of a project developed with the assistance of CA-CP in 2004, the company launched a program offering a $3000
cash incentive to its employees (nearly 6,000 people) to purchase a low-emissions hybrid vehicle. The money paid as
salary in the form of taxable income, helps defray the difference between the cost of a regular car and a hybrid, which
offers higher gas mileage and reduced tailpipe emissions. Additional incentive is given in the form of preferred parking
for hybrid drivers, as well as alternative vehicle drivers and carpoolers. Recently the company converted its own small
diesel truck to run off of biodiesel, a plant-based bio-fuel that produces fewer emissions than traditional diesel.
Renewables
Energy upgrades are an important step in reducing the company's emissions of greenhouse gases. To achieve its goal of
becoming carbon neutral, however, Timberland wants to buy or generate clean, renewable energy to power its
operations. Currently, opportunities for purchasing energy from renewable cources are limited to facilities in European
countries.

Since grid-supplied renewable energy is not available in the areas where Timberland's largest facilities are located,
Timberland is building its own renewable power generation capabilities to access cleaner power in the short-term. Wind
power currently provides 100% of the power needs for the company's European distribution center. New wind power
generation is under construction at Timberland's manufacturing facility in the Dominican Republic. Plans are also in
development for switching the facility's diesel supply to lower-emissions biodiesel.

The company has installed smaller-scale solar power systems for both inspiration and education at its corporate
headquarters and at a middle school in Stratham, NH. At present, Timberland is anxiously awaiting the installation of
what will be one of California's largest corporate solar panel systems. The 400kW solar array will provide Timberland's
Ontario, CA distribution center with 60% of its energy from clean, reliable power from the sun. Thanks to Southern
California Edison's Self Generation Incentive Program, Timberland will receive a 50% rebate on the installed cost of the
system. The solar array is expected to come on-line in October 2005.

To offset the emissions produced by other facilities, Timberland voluntarily
began purchasing Tradable Renewable Energy Credits (T-REC's). Renewable
energy credits are derived from the purchase of "green tags," which represent
dollars paid for the development of renewable power sources or the actual
generation of power from those sources. By purchasing the green tags,
Timberland is "offsetting" the carbon dioxide and other emissions from the fossil
fuel generation of the power it actually uses where renewable energy is not
available on the grid. Native Energy's Windbuilder Partners Program
(www.nativeenergy.com) allowed Timberland to support the development of new
wind farms in exchange for these credits. Since 2002, Timberland has purchased
the equivalent of over 4,000 metric tons of carbon dioxide credits. The company
continues to make annual purchases of green tags to help offset emissions
generated by its facilities globally. New company policy requires emissions
generated by Timberland-sponsored events to be offset with green tags. Recent
event-purchased green tags supported the Garwin McNeilus wind projects in
Dodge Center, MN, which are two non-profit wind farms whose earnings support
orphanages in Bangladesh and Southeast Asia. According to Adam Markham,
Executive Director of Clean Air ­ Cool Planet , this is just one more example of the
top-down commitment to the environment as demonstrated by Timberland .                 Timberland T-REC purchases sup-
                                                                                       ported construction of this turbine on
                                                                                       the Rosebud Sioux Reservation in
                                                                                       South Dakota.
Innovation
Timberland supports employee ideas and innovation as it relates to improving Timberland's environmental performance.
To this end, an annual environmental award was established in 2002 to reward a Timberland employee for meeting high
standards for professionalism and humanity, and reflecting passion and commitment to the health and welfare of our
planet. The reward is a cash donation to the employee and a local environmental organization of their choice.

Results

     ·    Over $300,000 in savings each year and climbing as utility prices escalate
     ·    7% of the company's global electric demand is being met with renewable energy
     ·    18% reduction in carbon emissions from 2003 baseline
     ·    Improved lighting and working conditions for employees
     ·    Winslow Management's Green2 Award 2004 for reducing a business's environmental footprint while increasing
          the value delivered to shareholders
Company Profile

Timberland is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and
accessories for consumers who value the outdoors and their time in it. Timberland products offer quality workmanship
and detailing and are built to withstand the elements of nature. The Company's products can be found in leading
department and specialty stores as well as Timberland retail stores throughout North America, Europe, Asia, Latin
America, South Africa and the Middle East. More information about Timberland is available at www.timberland.com



 Case Study: Efficiency, Renewables, and Transportation Improvements in Enschede, Holland

 The Enschede distribution center is the hub for all of Timberland's European shipments, with some 10
 million pieces of product passing through each year. Like all Timberland employees, Distribution Center
 Manager Henk Miltenburg is committed to environmentally friendly growth. When it became clear that the
 distribution center needed additional capacity, Henk wanted to ensure that the expansion was completed in
 a way that minimized the impact on the environment.
      Henk turned to Terry Kellogg in Environmental Affairs at Timberland headquarters in Stratham, New
 Hampshire, to collaborate on a strategy that could positively impact the operating costs of the Enschede
 facility while effectively minimizing the environmental impact of the expansion. Working with the plant's
 designers, Terry and Henk developed a plan to install large-scale skylights that would substantially increase
 natural daylight and decrease energy usage in the facility.
      These efforts built on existing state-of-the-art green-building features at Enschede, including a highly
 reflective roof that avoids heat loading in the summer and reduces the need for energy to cool the building; a
 permeable parking lot that minimizes water run-off; and the use of co-generated steam for heat in the winter.
 The co-generation uses waste heat from a power plant to create steam, reducing overall energy use and
 costs by about 20 percent over more conventional energy methods. Day-to-day operations also support
 environmental sustainability ­ from use of high-efficiency lighting systems to the reuse and recycling of
 shipping containers.
      Henk's leadership and initiative produced environmental and economic benefits. By "letting the sun
 shine in," Henk lowered the plant's environmental impact and decreased energy costs. The use of natural
 light has also increased productivity and helped to reduce injury rates: As one Enschede team member
 commented, "Work becomes easier when you get to see the world outside."
      Following the success of efficiency programs, Timberland introduced renewable energy to the plant to
 help further reduce power costs and emissions. Beginning in July 2002, 10 percent of the facility's power
 came from renewable wind power. Today 100 percent of the plant's energy is generated from wind, saving
 2,205 tons of emissions each year.




            Contact

            Betsy Blaisdell                                    Bob Sheppard
            Environmental Stewardship                          Director Business Outreach
            The Timberland Company                             Clean Air - Cool Planet
            200 Domain Drive                                   100 Market Street, Suite 204
            Stratham, NH 03885                                 Portsmouth, NH 03801
            Tel. 603-772-9500                                  (603) 422-6464
            www.timberland.com                                 www.cleanair-coolplanet.org