Climate Change Data

El Palacio de Hierro, S.A. de C.V.

Climate Impact & Sustainability Data (2020, 2022)

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:62,000 tCO2e/year (reduction)
Renewable Energy Share:92%

ESG Focus Areas

  • Social Responsibility
  • Environmental Conservation
  • Employee Well-being
  • Community Investment
  • Governance

Environmental Achievements

  • 92% of stores use clean energy, resulting in a reduction of over 62,000 tons of CO2 emissions annually.

Social Achievements

  • Maintained 100% of the workforce and their salaries during the pandemic.
  • Donated MXN $33.8 million to various social institutions and causes.
  • Launched social support campaign during COVID-19, including donations of PPE, meals, and water to medical staff and vulnerable groups.
  • Received the Socially Responsible Company certification for the sixth consecutive year.

Governance Achievements

  • Board of Directors met four times during 2020, discussing corporate strategy, debt programs, investments, and health protocols.
  • High-level executives voluntarily reduced their salaries temporarily in solidarity with the company during the pandemic.
  • Third debt issuance on the Mexican Stock Exchange (BMV) received a AAA rating from HR Ratings and Fitch Ratings.

Climate Goals & Targets

Environmental Challenges

  • Significant negative impact on business performance due to COVID-19 pandemic and resulting economic slowdown (8.5% decrease in Mexican economy).
  • Limited store capacity and hours during reopenings.
  • Decrease in sales (26% decrease in total revenue compared to 2019).
  • Increase in past-due portfolio for El Palacio de Hierro credit card.
Mitigation Strategies
  • Implemented strict public health protocols in stores and facilities.
  • Implemented operational measures to protect liquidity, including spending controls, negotiation of discounts with mall landlords, reduction in capital investments, and optimization of merchandise procurement.
  • Launched Protección Palacio elite product to increase insurance sales.
  • Continued 3D strategy (Differentiate, Digitalize, Diversify) to drive growth and brand consolidation.
  • Implemented a KPI-based strategy to improve profitability and productivity.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:18,192 tCO2e (Scope 1 and 2)
Scope 1 Emissions:9,413 tCO2e
Scope 2 Emissions:8,779 tCO2e
Renewable Energy Share:82.32%
Total Energy Consumption:122,384 MWh
Waste Generated:1,886,845 kg (organic, recyclable inorganic, non-recyclable inorganic, special handling, hazardous)
Carbon Intensity:0.04 ton CO2e per m2

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • 82.32% of electricity from renewable sources (primarily wind energy)
  • 75% of the operational fleet consisted of hybrid vehicles
  • Achieved EDGE certification for El Palacio de Hierro Coyoacán

Social Achievements

  • 92% of employees received ethics training
  • 94.2 Net Promoter Score (NPS) in transactional surveys
  • 20% increase in employees with disabilities compared to 2021
  • Achieved gold certification in the Mexican Standard for Labor Equality and Non-Discrimination (NOM-025) for Moliere and Legaria corporate offices
  • Maintained the Socially Responsible Company distinction and received the 2022 Exceptional Companies recognition
  • 60% of employees promoted in 2022 were women

Governance Achievements

  • Established a Sustainability Committee in 2021, with a dedicated Innovation and Sustainability director reporting directly to the CEO in 2022
  • 87% compliance rate in the Annual Declaration of Conflicts of Interest

Climate Goals & Targets

Long-term Goals:
  • Achieve Science Based Targets (SBTi) validated emission reduction goals
Medium-term Goals:
  • Obtain LEED Gold certification for Centro Coyoacán by 2025
  • Develop a plan for building certification under ESG criteria
Short-term Goals:
  • Reduce energy consumption by 2% in 2023 compared to 2022
  • Complete the second phase of compliance with the grid code
  • Include Acapulco and Antara stores in the renewable energy project
  • Define emission reduction targets for Scope 1 and 2
  • Begin accounting for Scope 3 emissions

Environmental Challenges

  • Climate change risks (physical and transition)
  • Supply chain disruptions
Mitigation Strategies
  • Disaster and natural phenomenon risk assessment and response plans in each store (NOM-030-STPS)
  • Business continuity analysis for Moliere and Legaria corporate offices
  • Business continuity governance, policy, and strategies
  • Plans to identify climate change risk exposure and develop adaptation plans for stores
  • Plans to assess alignment with TCFD recommendations and develop an action plan to align climate disclosure

Supply Chain Management

Responsible Procurement
  • No single supplier accounts for more than 10% of annual purchases

Climate-Related Risks & Opportunities

Physical Risks
  • Earthquakes, floods, hurricanes, volcanism, landslides

Reporting Standards

Frameworks Used: GRI, SASB, UN SDGs, TCFD

Certifications: EDGE (El Palacio de Hierro Coyoacán), NOM-025 (Moliere and Legaria corporate offices), ISO 39001 (road safety management system)

UN Sustainable Development Goals

  • SDG 4 (Quality Education)
  • SDG 5 (Gender Equality)
  • SDG 7 (Affordable and Clean Energy)
  • SDG 8 (Decent Work and Economic Growth)
  • SDG 9 (Industry, Innovation, and Infrastructure)
  • SDG 10 (Reduced Inequalities)
  • SDG 11 (Sustainable Cities and Communities)
  • SDG 12 (Responsible Consumption and Production)
  • SDG 13 (Climate Action)
  • SDG 16 (Peace, Justice, and Strong Institutions)
  • SDG 17 (Partnerships for the Goals)

The report details how various initiatives contribute to these SDGs.

Awards & Recognition

  • Socially Responsible Company distinction
  • 2022 Exceptional Companies recognition
  • HCR Equidad MX 2023 Best Places to Work LGBTQ+