Climate Change Data

The Quarto Group, Inc.

Climate Impact & Sustainability Data (2019, 2020, 2021, 2022)

Reporting Period: 2019

Environmental Metrics

Total Carbon Emissions:144 tCO2e/year
Scope 1 Emissions:12 tCO2e/year
Scope 2 Emissions:132 tCO2e/year

ESG Focus Areas

  • Environmental impact and sustainability
  • Ethical production
  • Community support

Environmental Achievements

  • Most books printed on Forest Stewardship Council (FSC) paper or Sustainable Forestry Initiative (SFI) paper (estimated 80%)
  • Consolidated shipments to minimize journeys
  • Worked with suppliers to adopt ethical manufacturing standards using ICTI and SEDEX Care protocols
  • Several UK offices use 100% green energy

Social Achievements

  • Launched Quarto Foundation in 2017 to support local charities
  • Employee code of conduct, anti-bribery and corruption, equal opportunities, anti-harassment and whistle-blowing policies
  • Commitment to no modern slavery or human trafficking in supply chains
  • Weekly yoga sessions offered to employees

Governance Achievements

  • Complied with the requirements of the UK’s 2018 Code of Governance
  • Strengthened the Board in early 2020
  • Renegotiated terms with printers in 2019

Climate Goals & Targets

Environmental Challenges

  • US tariffs on Chinese imports
  • Retailer pressure on margins
  • Initial delays and increased production costs due to Covid-19 outbreak in China
  • Falling orders and revenues due to global lockdowns caused by Covid-19
Mitigation Strategies
  • Developed non-Chinese printing options for US customers to avoid tariffs
  • Pricing books at proper market price points
  • Relocated some print production to Singapore and Malaysia due to Covid-19
  • Measures to mitigate operational risk, reduce cost base, and manage cash flow in response to Covid-19
  • Discussions with lenders to relax financial covenants

Supply Chain Management

Responsible Procurement
  • ICT and SEDEX Care protocols
  • FSC and SFI paper policy

Climate-Related Risks & Opportunities

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:128 tCO2e/year (UK: 56 tCO2e/year)
Scope 1 Emissions:11 tCO2e/year (UK: 11 tCO2e/year)
Scope 2 Emissions:117 tCO2e/year (UK: 45 tCO2e/year)
Total Energy Consumption:128 kWh/year (UK: 60,364 kWh/year)

ESG Focus Areas

  • Diversity
  • Sustainability
  • Ethical Production
  • Community Investment

Environmental Achievements

  • Use of sustainable paper: over 70% of books printed on FSC or SFI paper.
  • Consolidated shipments to minimize journeys.
  • Reduced UK office footage by 13% from Q1 2021.
  • Launch of new children's imprint in 2021 with recycled paper and carbon offsetting.

Social Achievements

  • Launched a Diversity Committee to set goals for workplace inclusiveness and diversity.
  • Launched a formal internship program to bring in interns with diverse backgrounds.
  • Hosted four “Eliminating Systems of Oppression” sessions for all employees.
  • Donated $19,803 from sales of "This Book is Anti-Racist" to anti-racist charities.
  • Donated to UK’s NHS Charities Together from sales of "Little People Big Dreams: Captain Tom"
  • Participated in US charity events with Humble Bundle, raising over $200,000.

Governance Achievements

  • Strengthened the Board in early 2020.
  • Complied with the requirements of the UK’s 2018 Code of Governance (with exceptions noted in the report).
  • Established a whistle-blowing policy and anti-bribery policy.

Climate Goals & Targets

Long-term Goals:
  • Become the dominant publisher of illustrated books worldwide.
  • Expand use of intellectual property.
Medium-term Goals:
  • Become a significant trade publisher in North America, UK, and ANZ.
  • Launch new imprints (Happy Yak, rebranded Ivy Kids).
Short-term Goals:
  • Maximize backlist sales, increase sell-through, open more national/regional accounts (2021).

Environmental Challenges

  • Covid-19 pandemic impacting high street outlets, shifting sales online.
  • Supply chain disruptions due to Covid-19, leading to shipment delays and increased shipping costs.
  • Brexit creating uncertainty for European business.
  • Potential decrease in consumer purchasing power.
  • Reduced backlist revenues following reduced investment in 2019.
Mitigation Strategies
  • Refined publishing program to concentrate on digital sales and remaining customers.
  • Tight cost controls and scrutiny of print procurement.
  • Adapting sales and marketing efforts to online sales.
  • Flexible holistic supply chain approach, working with logistics suppliers and onshore/offshore printers.
  • Diversifying international customer base.
  • Promoting e-book versions of books.

Supply Chain Management

Responsible Procurement
  • Use of FSC and SFI paper.
  • Work with suppliers to adopt ethical manufacturing standards (ICTI and SEDEX).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code

Certifications: Forest Stewardship Council (FSC), Sustainable Forestry Initiative (SFI)

Sustainable Products & Innovation

  • Books printed on sustainable paper.
  • New children's imprint with recycled paper and carbon offsetting.

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:134 tCO2e/year (Scope 1 & 2)
Scope 1 Emissions:7 tCO2e/year
Scope 2 Emissions:79 tCO2e/year
Scope 3 Emissions:48 tCO2e/year (Business Travel)
Total Energy Consumption:190,665 kWh/year (Scope 2)

ESG Focus Areas

  • Sustainability
  • Diversity and Inclusion
  • Ethical Production

Environmental Achievements

  • Launched Ivy Kids, the most environmentally friendly publishing initiative in the market, Highly Commended in the Sustainability category at the Future Book Awards
  • 66% of books printed on sustainable paper (FSC or SFI)
  • Consolidated shipments to minimize journeys
  • Reduced UK office footage by 13% from Q1 2021

Social Achievements

  • Continued Diversity and Inclusion Committee initiatives, including anti-racist training
  • Book donations to libraries and schools
  • Donated 3,000 copies of 'This Book Is Anti-Racist' to UK schools and libraries
  • Participation in Humble Bundle charity events, generating $137,031 in donations

Governance Achievements

  • Successfully completed 2018 turnaround plan
  • Reduced net debt by 72%
  • Extended banking facilities to July 2024
  • Appointed Alison Goff as Group CEO

Climate Goals & Targets

Long-term Goals:
  • Achieve net-zero emissions (target year not specified)
Medium-term Goals:
  • Establish emissions reduction targets and action plan by end of H1 2022
  • Expand on the learnings and opportunities from the Ivy Kids imprint
Short-term Goals:
  • Complete climate-related risk assessment by end of H1 2022
  • Establish methodologies to estimate indirect emissions (manufacturing and shipping)

Environmental Challenges

  • Covid-19 pandemic disruptions (lockdowns, retail closures, supply chain issues)
  • Supply chain disruptions (paper shortages, manufacturing cost increases, labor disruptions, container scarcity, port delays)
  • Rising freight costs
  • Increased competition in retail landscape
  • Reduced space for books in supermarkets and mass retail outlets
Mitigation Strategies
  • Pivoted sales efforts towards online channels and open markets
  • Opened 157 new accounts in the UK market
  • Focused on selling existing inventory during supply chain delays
  • Secured additional printing capacity in the US and negotiated increased capacity in Europe
  • Developed tools to increase productivity in editorial departments
  • Implemented a blended working model to improve efficiency
  • Continued to control overheads

Supply Chain Management

Responsible Procurement
  • Use of FSC and SFI certified paper
  • Ethical manufacturing standards (ICTI and SEDEX)

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather events disrupting production and supply
  • Disruptions to raw material availability (wood pulp)
Transition Risks
  • Changes in supplier practices
  • Competition for printing capacity
  • Regulatory changes (e.g., EU CBAM levy)
Opportunities
  • Development of energy-efficient products
  • Expanding on the Ivy Kids model

Reporting Standards

Frameworks Used: TCFD (partially compliant)

Certifications: FSC (Forest Stewardship Council) and SFI (Sustainable Forestry Initiative) paper

Third-party Assurance: Grant Thornton UK LLP

Sustainable Products & Innovation

  • Ivy Kids imprint

Awards & Recognition

  • Highly Commended in the Sustainability category at the Future Book Awards (Ivy Kids)

Reporting Period: 2022

Environmental Metrics

ESG Focus Areas

  • Climate Change
  • Diversity & Inclusion
  • Ethical Sourcing
  • Community Investment

Environmental Achievements

  • Approximately 60% of books printed on sustainable paper (FSC or SFI)
  • Consolidated shipments to minimize transportation emissions
  • Collected transportation emissions data (expanding data sets in 2023)
  • Worked with suppliers to adopt ethical manufacturing standards (ICTI and SEDEX)

Social Achievements

  • Launched Ivy Kids Eco imprint using recycled materials and carbon offsetting (2021)
  • Donated over 25,000 books to support literacy
  • Participated in community initiatives (winter clothes drives, etc.)
  • Supported Humble Bundle charity projects, generating donations of $63,491 in 2022
  • Participated in Packed with Hope project supporting displaced Ukrainian children

Governance Achievements

  • Progress in reporting against the TCFD framework
  • Continued focus on diversity and inclusion through the Diversity and Inclusion Committee
  • Established whistle-blowing and anti-bribery policies
  • Updated supply agreements to include Modern Slavery Act compliance

Climate Goals & Targets

Long-term Goals:
  • Meet UK Net Zero GHG target
Medium-term Goals:
  • Reduce absolute Scope 1 and 2 GHG emissions by 2030
  • Reduce Scope 3 GHG emissions purchased goods and services against 2022 baseline
Short-term Goals:
  • Continue to embed climate-related risk and opportunity into business strategy and operations
  • Expand data capture of waste and plastics use for future Scope 3 disclosures by 2024
  • Increase supply chain engagement on GHG emissions
  • Achieve 100% green energy purchased across all office locations
  • Zero CO2 from Scope 2 sources
  • Establish data capture and measures across Scope 3 categories

Environmental Challenges

  • Declining consumer spending
  • Supply chain disruptions (shipping times, strikes, port disruptions)
  • Paper shortages
  • Economic pressures squeezing consumer spending
  • Non-fiction sales decline (c. 7%)
  • Trade with Russia and Ukraine halted
  • Lockdowns in China impacting that market
Mitigation Strategies
  • Tight cost control
  • Lower pre-publication and amortization costs
  • Switched shipping to trucks when necessary
  • Implemented local printing
  • Secured additional capacity in the domestic US printing market
  • Negotiating with printers in continental Europe
  • Diversifying revenue streams in India (direct deliveries, local printing)
  • Working with suitable partners to mitigate regional risks

Supply Chain Management

Responsible Procurement
  • Ethical manufacturing standards (ICTI and SEDEX)
  • Sustainable paper policy (FSC or SFI)
  • Engagement with key supplier groups on climate-related goals

Climate-Related Risks & Opportunities

Physical Risks
  • Disruptions to manufacturing base from climate events
Transition Risks
  • Increased regulation
  • Customer demand for lower-carbon products
  • Increased scrutiny on environmental impacts
Opportunities
  • Development of energy-efficient products
  • Increased exploitation of digital channels
  • Exploring just-in-time and local printing

Reporting Standards

Frameworks Used: TCFD

Certifications: FSC, SFI

Sustainable Products & Innovation

  • Ivy Kids Eco imprint