The accounting policies follow ESRS E1 and the GHG Protocol.
Scope 1 GHG emissions
Reporting Scope 1 CO₂e emissions includes CO₂e emissions from direct fuels. The emission factors for each energy type are the latest available from third-party organizations such as DEFRA and the US Environmental Protection Agency. This applies with the exception of the emission factors for propane and natural gas, which are older. The latest available emission factors for these are somewhat lower and, consequently, for 2024 Nolato has reported Scope 1 emissions that are 134 tons too high. Scope 1 emissions with the latest available factors would have been 1,453 tons CO2e.
Carbon credits and avoided emissions are not included in the Scope 1 reporting.
The share of emissions controlled and addressed under the EU Emissions Trading System (EU ETS) of total Scope 1 was 0% in 2024. For China, 39 tons of Scope 1 emissions are included in the ETS, which accounts for 2% of total Scope 1 emissions.
Scope 2 GHG emissions
Indirect GHG emissions from indirect energy consumption of electricity and district heating.
- Location-based emissions are calculated based on national/regional network averages for emissions in defined geographical areas.
- Market-based Scope 2 emissions refer to indirect GHG emissions linked to purchased electricity and district heating through contractual instruments such as Energy Attribute Certificates (EACs), Renewable Energy Certificates (RECs, IRECs) and Guarantees of Origin (GoOs) from sources such as wind, hydropower, solar energy and biomass. The conversion factor from consumption of renewable electricity is applied at 0 tons CO2e/MWh. For installations without such agreements, residual mix emission factors for each country/region are used to calculate emissions from consumed electricity. In the absence of supplier-specific or residual mix emission factors, the national average emission factor in the grid is used.
- Emissions from district heating are calculated based on supplier-specific emission values or national averages.
Scope 3 emissions
Indirect GHG emissions from the value chain. The accounting policies follow the GHG Protocol and are described by category below.
- Category 1: Climate impact from consumed raw materials is calculated using weight per raw material and general emission factors per material type; where supplier-specific data is available, it is used. Consumption data is used for other goods and services.
- Category 2 is calculated using supplier-specific data, consumption data and average data.
- Category 4 is calculated using consumption data.
- Categories 5 and 12 are calculated using hybrid approaches.
- Climate impact from business travel, category 6, is calculated using supplier-specific data and consumption data.
- Category 9 is calculated based on estimates and average data.
- The calculation method for the remaining categories (3, 7, 8, 10, 11 and 15) is based on average data.
In general, the main sources for emission factors include DEFRA, IEA, EPDs and supplier-specific emission factors, procurement authorities and other industry databases and standards.
For the calculations of Scope 3 for 2024, the emission factors were updated and the number of supplier-specific emission factors for raw materials increased.
Climate action during the year
The situation in terms of Nolato’s climate impact is affected by a number of factors, such as the following:
- By purchasing fossil-free electricity for the businesses in Malaysia, Ireland and Romania, and continuing with the gradual increase in the proportion of fossil-free electricity in North America, indirect carbon dioxide emissions are declining. Purchases were made through direct agreements with energy suppliers, or through various types of certificate system (REC, IREC, M-RETS).
- Nolato Jaycare in the UK has signed a national climate change agreement to counteract climate change. The agreement covers energy-intensive industry and, by cutting energy consumption, participating companies are eligible for reduced charges under a system in the UK known as the Climate Change Levy.
- In China, several of the units have engaged employees and focused on training to improve their understanding and awareness of carbon dioxide emissions.
- Several of the units are implementing energy efficiency measures and energy audits to reduce their energy consumption.
- Other measures concern replacing equipment, reduced scrap, better waste management, purchasing more fuel-efficient vehicles, increased use of teleconferences and improved logistics.
- Emissions from the purchase of capital goods in Scope 3 are predicted to fluctuate between years going forward. The accuracy of these figures is low, as emissions from this category are based on consumption data.
- The decline in production in Beijing, China, reduces emissions considerably from purchased electronics in category 1 and use of sold products, category 11.
- Several measures are also being implemented to reduce emissions for employees’ commuting and transport.
- The volume of sustainable raw materials (defined as recycled, bio-based or mass-balanced raw materials) used for products increased to 1,694 tons from 1,200 tons, and the proportion thus rose to 3.4%.
- Two other subsidiaries within the Group obtained ISCC+ certification, which enables providing products made of mass-balanced materials to their customers.
- A number of workshops were conducted with key suppliers to define roadmaps for reducing carbon footprint.
- Since 2024, all subsidiaries in the Group have included planned measures to reduce carbon footprint in their strategy plans.
