WHAT IS REC?

-Renewable Energy Certificates (RECs) are market-based instruments that track clean electricity and its environmental benefits.
-International Renewable Energy Certificate (I-REC) is an unbundled Energy Attribute Certificate and are issued by specific
agencies registered with the I-REC Standard for electricity generation from a renewable source

• RECs contains facts or attributes includes essential information about unit of electricity, date, technology, and place of
production.

• RECs and their associated environmental attributes can be sold together or separately from the underlying physical electricity.
• Bundled vs Unbundled transactions

• RECs enables transaction, ownership, trade and the purchaser to claim the environmental attributes of renewable
energy by proving the renewable origin of energy that is recognized internationally
• RECs are used for tracking all corporate procurement

Each I-REC represents 1 MWh of electricity produced by a renewable source of energy and has a unique ID associated with it
to prevent double counting, double issuing and double claiming of underlying attributes
1.
HOW I-REC WORKS?

PROCESS FLOW

Renewable Device Registration I-REC Redemption

I-REC Issuer

I-REC Issuance
Monthly
Meter Reading

Electricity
Electricity delivered via
grid
generated

Renewable
Energy Source Grid Consumer

2.
WHY I-RECs?
INTERNATIONAL RECOGNITION
I-RECs are recognized by all sustainability
reporting standards such as RE100, CDP,
GHG Protocol Scope 2 Guidance
FLEXIBILITY TO CHOOSE
I-REC purchaser has the flexibility to choose
the type of renewable energy source in an
easy, hassle-free and instantaneous manner
TRANSPARENCY
I-RECs are transparent and guarantee
renewable energy procurement via unique
trackable certificates, avoiding double
counting
Supplier-driven: lower scope 2 &
Brand-driven: lower their scope3
is addressing their scope 2, which has a good
implication, a positive reaction to the brand’s
scope 3
EASE OF USE
I-RECs are easier to administer in
comparison with short term
Power Purchase Agreements
(PPAs)
COST-EFFECTIVE
I-RECs are cheaper than domestic RECs in
countries where renewable sources do not form
the majority of the energy mix and are on-par
with domestic RECs in countries with higher
renewable energy mix
3.
REDEMPTION OF AN I-REC

Broker/Trader would redeem the I-RECs on behalf

of the beneficiary

Upon redemption, I-REC certificate would be received from

the I-REC Registry, assigning the I-RECs attributed to the
beneficiary

The assigned I-REC can only be used by the beneficiary. It

mimics a bank transfer confirmation, with a unique id
assignment

This certificate ID is reportable to all sustainability reporting

agencies by the beneficiary and is accepted as best practice
by GHG Scope 2 Protocol, CDP, RE100

4.
GLOBAL BRANDS WHICH HAVE ADOPTED I-RECS

5.
 Company Sector HQ Facilities Location Joining Year RE100 target 2019 Progress Comments Website
year
New balance athletics Apparel, US 14 office locations across 10 countries. In 2019 2025 47% To achieve commitment: PPAs and www.newbala
Footwear, asia: China, Hong kong, Japan and RECs for US based offices, distribution nce.co.uk
Accessories Singapore. 5 manufacturing facilities centres, and manufacturing facilities
across the US and 1 in the UK. and rooftop solar panels for flimby
factory in the UK.

Ralph Lauren Apparel, US 493 directly operated retail stores 2019 2025 2% - To achieve target: a combination of corporate.ralp
Footwear, globally: 144 ralph lauren stores, 77 club VPPAs ( Virtual power purchase hlauren.com
Accessories monaco stores and 272 polo factory agreements) , onsite solar for a
stores. The company also operated 583 selected number of US sites, for
concessions shop locations globally. remaining sites, RECs, GoOs
( Guarantees of origin) and I-RECs.
- SBT: 30% reduction in scope 1,2 and
3 emissions by 2030.

Tesco Retail UK Stores in UK, Ireland, Czech Rep., Hungary, 2017 2030 68% - SBT: 7% by 2020 and 35% by 2030 www.tesco.co
Poland, Slovakia, Thailand and Malaysia - Expanding RE mix across the group m
to include over 50% from grid PPA and
on-site generation by 2030 and using
support from RECs

- Net-zero emissions in their direct

operations and RE100 by 2025
- 26% reduction in scope 1 & scope 2
GHG from 2019 baseline
Executive - Investing in both RECs and longer-
office: term renewable projects, such as
London, UK - UK VPPAs
Operational - Japan - Keeping warming to 1.5ºC globally –
Apparel office: NY, - Thailand by signing the Science Based Targets
Capri Holdings Limited Fashion USA - Portugal etc. 2021 2025 initiative Business Ambition for 1.5ºC http://www.ca
priholdings.co
m/corporate-o
verview/defaul
t.aspx
 CDP Supply Chain Supplier's
Customers SBT Questionnaire Other Supply Chain Initiatives Initiatives List

30% total emission reduction 2. Increase energy efficiency & lower emissions in suppliers
Adidas by 2030 3. Participates in Green Supply Chain CITI (Chinese IPE) CITI, FICCA Y

1. Part of RE 100
2. 30% emission reduction by 2030
30% total emission reduction 3. Ranked 10th/540 in Green Supply Chain CITI (Chinese IPE)
NB by 2030 4. Uses Higg's Index approach (The SAC) SAC, CITI, FICCA

30% scope 3 emission Claims to plan to increase RE in supply chain

Nike reduction by 2030 SAC, FICCA, Y
- 100% of Tier 1 suppliers are under a SC management program
- Plans to Improve supply chain transparency in response
63% scope 3 emissions to human rights and environmental risks.
Asics reduction by 2030 - By 2023, Tier 1 suppliers will hold at least a B-level FICCA, SAC, Y

1. Claims to plan to reduce emissions & increase E. efficiency in supply chain

(already started in China & Bangladesh)
60% scope 3 emissions 3. AII in China and PaCT Bangladesh PaCT, Clean by
reduction per million euro sale 4. Work with Clean by Design initiative to reduce one of their Chinese Design, FICCA,
PUMA by 2030 manufacturing company's emissions by 10% SAC, Y

59% scope 3 GHG emissions

reductions from purchased
raw materials, fabric and 1. H&M Indonesia is part of the RTL initators
garmentsper piece by 2030 2. 1 of 13 signatories on WRI Indonesia's CEA
H&M Group from a 2017 base-year. 3. Has sustainable line RTL
EXAMPLES OF SCOPE 3 TARGETS

H&M: Reduce absolute scope 3 GHG emissions from purchased raw materials, fabric
and garment 59% per piece by 2030 from a 2017 base-year. (physical intensity)

GHG EMISSIONS ACROSS THE

FASHION VALUE CHAIN

In its 2019 sustainability report, H&M FIGURE | H&M Scope 3 CO2e

reported scope 1 and 2 emissions to be emissions
61,462 tons (0.4% of total), and scope 3
emissions to be 17,622,000 tons
(99.6% of total). Within scope 3, raw
materials, fabric production, and
garment manufacturing represented
71% of emissions.

Source: H&M Group Sustainability Report 2019.

 EXAMPLES OF CIRCULAR BUSINESS MODELS
CASE STUDY: H&M AND MAERSK ECO DELIVERY
In 2019, H&M’s COS brand partnered with the Renewal Workshop to launch the
In support of its ambition to become climate positive by 2040, H&M Restored Collection - restored pieces that have been sourced from COS own
is working with Maersk to reduce its logistics carbon footprint. The supply-chain or returned by customers. It plans to measure and communicate
program the GHG and water benefits of the program. COS is also developing a resale
- Maersk ECO Delivery - ensures that sustainable biofuel from platform.
sources such as waste cooking oil is used to power select vessels.
The solution is developed based on the requirements of the
Roundtable on Sustainable Biomaterials standard and is third-party
verified.
“Partnerships are of the essence when exploring sustainable
solutions for the future, and no company can do it alone. Our
cooperation with Maersk enables us to pool our resources and
reduce our respective carbon footprints much more efficiently. The
service has the potential
to make a substantial part of our supply chain carbon-neutral.”
-- Mats Samuelsson, Senior Vice President, Global Logistics at H&M
Group.