Our Motivation

At !K7 Music we believe in a shared responsibility to tackle the climate crisis. We urge our governments to urgently put in place the better structural and legislative frameworks required to limit warming to 1.5 degrees but we also want to take responsibility for our own carbon footprint and reduce it wherever possible. Through our staff Climate Working Group we developed a company-wide target to decarbonise and significantly reduce the environmental impact of our operations. We are committed to become net-zero by 2026 and carbon positive by 2030. We hope that by providing a clear and transparent breakdown of our approach we can show this is a realistic and achievable goal for companies like ours.

Alongside groups including AIM and IMPALA we are actively working to develop industry-wide sustainable practices and public policy advocacy and our CEO Horst Weidenmüller is the Founder and Chair of the IMPALA Sustainability Taskforce. !K7 are also founding signatories of the Music Climate Pact, initiated by AIM and we are signed-up to the UN’s Race to Zero pledge through the SME Climate Commitment programme.

Reducing our Impact

We started our carbon reduction program in 2019 by switching the first energy providing contracts to green energy and completed the switch in 2021.

Since then have completed a full assessment of our !K7’s carbon emissions that covers Scope 1, 2 and 3 including: energy use, waste, manufacturing, shipping and business travel. Beginning with a CO2 assessment we have considered many aspects of our environmental footprint and ways to lessen it.

In addition to our current and planned carbon reduction initiatives in 2021 we have taken the extra step of calculating our own carbon tax for 2021 at €45 per tonne to help fund carbon sequestration projects and to adjust our company to a carbon tax business environment. This year we have donated towards two organisations, both doing vital work to protect biodiversity and maintain CO2 sequestration. They are MoorFutures, a peat restoring program in Schleswig Holstein in Germany, and The Nicaforest High Impact Reforestation Program in Nicaragua. We chose the figure of €45 to ensure we were way above the cost per tonne of existing decarbonising options on the market.

Moving Forward

We are on the path to net zero in 2026 and carbon positivity by 2030. As part of this journey we will continually review our actions and results and develop carbon reduction initiatives. Our plans and initiatives under development are all detailed in the report.

We are looking forward to continuing our work as a business alongside our peers and partners in the industry to drive change in the sector.

Report 2022

Evaluation

Our carbon footprint assessment is based on the internationally recognised standard Scope 1, 2 and 3 emissions. Scope 1 refers to direct emissions produced by company owned facilities whereas Scope 2 covers emissions from energy that is consumed onsite. Scope 3 covers indirect supply chain emissions, so in our case manufacture and shipment for all releases we produce and distribute as part of the !K7 label group. Our calculation however does not include data from the labels we distribute as part of our label services offer.

We calculated our emissions using the Creative Green Tools from Julie’s Bicycle. For the freight emission calculations we utilised the tool from Carbon Care.

A full breakdown of all data sources can be found at the end of this report. It should be noted that in some cases, in particular with manufacturing, we have made conservative estimates with available data and will be continually working to improve accuracy and relevance of our sources, in order to provide the most accurate picture of our environmental impact.

Carbon output is measured in tonnes. 1 tonne = 1000kg CO2.

Manufacturing data comes only from the !K7 Label Group labels: !K7 Records, Strut, AUS, Ever, Soul Bank Music and 7K!

For a full breakdown of the carbon impact of physical product manufacturing, see table below.

Product	Carbon
1x CD jewel case	1.3kg
2x CD jewel case	2.6kg
1x CD digipack	0.58kg
2x CD digipack	1.06kg
1x vinyl 140g	1.9kg
2x vinyl 140g	3.8kg
3x vinyl 140g	5.7kg

In our 2019 and 2020 carbon report we have not included the emissions data from the destruction of records nor capital goods. Those emissions will be included in our 2021 calculations and onwards.

Reduction Measures and Targets

Following an analysis of all our operations we divided our carbon output and environmental impact into the following areas: Energy & Electronics, Waste, Fleet & Travel, Manufacturing & Shipping. Detailed below are the initiatives we have put in place and our targets for reduction. Although our assessment and evaluation focuses primarily on CO2 reduction, we have also included our sustainability initiatives to reduce our overall impact on the environment.

We reduced our carbon footprint from 47 tonnes in 2019 to 14 tonnes in 2020 in scope 1&2. However we know that our 2020 data does not provide a clear picture of emissions due to the Covid-19 restrictions. We will therefore be using 2019 as the baseline for our carbon reduction plan moving forward.

Scope 1 and 2

Energy & Electronics

Since 2019 our office electricity has been supplied by a 100% renewable energy supplier: EWS is a community owned renewable energy co-operative in Germany, who are active members in the environmental movement.
We updated the regulation of our heating system to ensure maximum energy efficiency.
Switches have been installed at all desks to ensure no standby energy waste overnight and when not in use.
All our business and web servers now also run on green energy.
We have replaced the majority of our larger desktop computers to lower energy consumption laptops.
All office batteries are now rechargeable.
We have begun to replace any malfunctioning printers with inkjet refillable versions that reduce toner dust in the air.

Aims and Targets:

Moving forward we will be focusing on developing low energy computer systems that rely on the next generation of chip technology to reduce our energy consumption even further.
All new phones and computers will be bought refurbished.
We will continue to extend the average life of our computers and phones through additional repair and refurbishment.
By 2023 we want to have reduced our energy carbon emissions by 40% from our 2019 baseline.

Waste

An office recycling programme is in place and waste is currently divided for plastic and paper recycling.
Wildplastic recycled bags are now in use for all our waste disposal.
All bottled water in the office has been replaced with a filtration system run from tap water and other office drinks are delivered as part of a bottle deposit system.

Aims and Targets:

We are investigating and trialing new waste disposal methods including coffee and food compost, in partnership with neighboring businesses.
A plan is in development to fully recycle all computers and other IT waste.
There is now an increased focus on staff training and sign-posting so ensure everything is disposed of correctly in the office moving forward.
We are moving towards a paperless environment through use of Docusign and other technologies.
Overall we are working to significantly reduce our waste output by establishing relationships with local suppliers, who use much less packaging and have deposit systems in place.
By 2023 we want to have reduced our waste related carbon emissions by 30% from our 2019 baseline.

Fleet & Travel

There is now a review process in place for assessing the necessity of any business flights. As part of this review criteria we have calculated the major carbon difference in carbon and greenhouse gas emissions for three major business travel destinations (Berlin to London, Warsaw and Amsterdam) between train and air travel.
Prior to the switch to a more sustainable car fleet in 2020 !K7 owned two petrol vehicles and had one leasing contract for a further petrol vehicle. By October 2021 we had reduced our fleet to one company car and replaced the second own car with a leased electric car. By June 2022 both company cars will be electric.
The majority of our staff walk, cycle or take public transport to work and there is an onsite bicycle park, as well as showering facilities.

Aims and Targets:

Further initiatives to reduce our air travel specifically within Europe in comparison to pre-Covid 19 (2019) levels are currently under development.
We plan to continue to assess the necessity of travel and to incentivise train travel over short haul flights whenever possible.
By 2023 we want to have our fleet & travel carbon emissions reduced by 50% from our 2019 baseline.

Scope 3

Manufacturing & Shipping

In the manufacture and shipment chain we are responsible for the product, and therefore the carbon footprint, until the point of transfer. This point is usually when the product reaches the distributor at drop off or collection but can vary depending on contract.

Since 2019 we have used sea freight for the majority of our shipments to North America, resulting in a significant decrease in emissions. That year we shipped 15,737 intercontinental units (10.16% of our total shipped units) from our warehouse in Austria and saved more than 38 tonnes of CO2, compared to air freight.
In 2020 we shipped 18,426 intercontinental units (10.16% of our total shipped units) from our warehouse in Austria and saved more than 45 tonnes of CO2, compared to air freight.
Plastic CD jewel cases are no longer used for our back catalogue and new releases.
Cardboard packaging is now produced using FSC certified paper sources.
Our main warehouse partner is KDG, based in Austria. Their electricity provider obtains 70% of its electricity from Austria and 30% from Sweden. No CO2 emissions or radioactive waste are produced in this process.
Our biggest German distributor also uses the KDG warehouse which removes the need for extra shipping for the German market.
Shrinkwrap used to protect our goods is 100% recyclable and avoided whenever possible.
All our shipments are packed in cardboard boxes with a high percentage of recycled material and will be shipped by using EUR-Pallets, whenever possible, to further decrease the shipping impact.
In the event that we must destroy overstocks, it will be handled by Tetralog & MEWA Plastics who re- and upcycle materials to return them to the circulation.

Aims and Targets:

We are moving away from single use plastic including shrink wrap towards long lasting protective plastic sleeves.
New projects will avoid the use of 180g vinyl.
We will continue our work with manufacturing partners to ensure a move to green energy and more sustainable production practices, including a transparent carbon measure for every manufactured component.
We are also actively working with our other warehousing partners to encourage a move to more sustainable shipping solutions.
We aim to reduce our scope 3 emissions by 30% until 2023 on a per unit basis.

Beyond Carbon

Many of our current and planned initiatives go beyond carbon reduction and focus on sustainability more generally:

Sustainability and reducing environmental impact is now a part of our core business strategy and we meet biweekly to discuss new ideas and opportunities, as well as tracking our progress.
We are proud to be working with many artists who tackle the subject of climate breakdown and environmental action in their work and we support them to do this in any way we can.

Aims and Targets:

We are in the process of further reducing the environmental impact of our office food and drink consumption by partnering with a local food co-operative to provide more locally sourced and sustainable fruit, vegetables, milk and other office products.
We are moving all our sustainable office supply purchases to a sustainable supplier Memo.
Key suppliers, distributors and manufacturers will also be asked to share information on their environmental policies and plans.
Approaches to sustainability will be added to our criteria for selecting new suppliers and become a formal part of our processes.
Moving forward we will share all our knowledge with our distributed label partners and help them to ease their way into carbon reduced operations.

Streaming Impact

We are aware of the additional carbon generated through music streaming and download as a result of high server electricity use. We are keen to work with digital streaming platforms to promote greener practices and transparency in how they reduce their carbon output as regards streaming and downloading. We applaud recent moves to reduce greenhouse gas emission in this sector, e.g. Spotify’s Next Step on Our Path to Net Zero Emissions, and urge them to go further to push for fully renewable solutions.

Next Steps

We reduced our carbon footprint from 47 tonnes in 2019 to 14 tonnes in 2020. However we know that our 2020 data does not provide a clear picture of emissions due to the Covid-19 restrictions.

Manufacturing is responsible for 97% of our emissions and as our physical records sales in 2021 have significantly increased this will undoubtedly have an impact on our overall footprint. Whilst we are working closely with our partners to reduce manufacturing emissions there are limits to our influence and impact in these areas.

Moving forward we will work towards an additional per head breakdown of carbon emissions for our operations (Scope 1 and 2) and per record for our manufacturing emissions (Scope 3), in addition to our overall footprint. As we continue to grow it is inevitable that our overall footprint will increase and this granular breakdown will allow us to continue to monitor our progress.

Funding CO2 Sequestration Programmes

In addition to our current and planned carbon reduction initiatives in 2021 we have taken the extra step of calculating our own carbon tax for 2021 at € 45 per tonne, to help fund carbon sequestration projects and to adjust our company to a carbon tax business environment. We have chosen to invest this into projects with a strong decarbonisation impact. For our 2021 footprint we have donated to two organisations, both doing vital work to protect biodiversity and maintain CO2 sequestration. The figure of €45 was chosen to ensure we were way above the cost per tonne of existing decarbonising options on the market.

MoorFutures is a peat restoration program in Schleswig Holstein in Germany. The project works to restore the peatlands of Königsmoor, which were heavily drained throughout the 20th century, as well as developing new peatland. In addition to carbon and methane sequestration the restored peat will have a significant positive impact on the biodiversity of the local area and beyond. As the carbon sequestration through peat restoration is additional, immediate and permanent it meets the three main criteria for decarbonisation. The project is a state owned nature conservation trust which helps ensure that this is a secure and long-term investment.

The Nicaforest High Impact Reforestation Program in Nicaragua. Teak forests are planted on land which had been deforested since 1989. This, in addition to the management of natural forest, has huge benefits for watersheds and the surrounding ecosystem. We collectively chose this program for its many positive benefits in a region that has suffered vast deforestation.

At the time of publishing this report we do not have sufficient data to carry out a full assessment of our 2021 footprint. We have therefore taken 75% of our 2020 emissions as a baseline and will factor in the remaining 25% once we have completed our 2021 emission report. Our total 2020 footprint was 356 tonnes. Our October 2021 donation was €12,015 split between the two programmes.

Our Data Sources

Throughout this process, we have endeavoured to provide the most accurate picture of our environmental impact, in line with current industry standards. However there are limitations to our data collection and calculations and we are actively working to improve the accuracy and relevance of this information. There are also areas that we have not been able to gather satisfactory data for the moment, including some capital goods, taxi journeys, record destruction and our direct to consumer shipping emissions. Due to Covid our US and UK operations have been closed for the past two years and emissions data has also therefore not been included in the report. We are already working on gathering all this data for next year’s report and believe we will significantly reduce our exceptions in the years to come.

We have made conservative estimates when required, based on all available information. It is also not always possible to carry out due diligence on the sustainable promises of all our suppliers and partners but we trust transparency will significantly increase in the coming months and years.

We believe our current assessment provides a good snapshot and a strong benchmark for which to assess our progress in years to come.

Emission Source	Data Source
Business Travel	Invoices and travel information from our accountancy department to calculate past travel routes by year and their related carbon emissions
Fleet Travel	Bookkeeping invoice information and Creative Green Tools to calculate our own vehicle carbon footprint
Energy	Data came from our annual statement from our electricity providers with additional calculations from Creative Green Tools
Waste	Annual statement from our waste disposal company as well as available information from the Berlin State on waste disposal and recycling breakdown.
Shipping	Calculations were made through the Carbon Care tool using our delivery note system.