K7’s Carbon Footprint Report, 2019, 2020, 2021, 2022

Sustainability Report 2022

K7’s Carbon Reduction Plan as of 2021

At !K7 Music we believe in a shared responsibility to tackle climate crisis.
Our primary focus is removing as much CO2 from our operations as possible. For those emissions unavoidable at this stage, we donate € 45,- per tonne into natural carbon sequestration projects.

We support the urgent changes needed across different industries and initiatives. Rather than putting money into conventional offsetting schemes (which at best create their carbon savings over decades, too late to help the world reach the 2030 target), we support projects that actively create change now.

Through our staff Climate Working Group, we’ve developed a company-wide target to decarbonise and significantly reduce the environmental impact of our operations. We are committed to halve our carbon emissions by 2028 from our 2019 baseline, and to be net zero by 2040. We hope that by providing a clear and transparent breakdown of our approach we can show a realistic and achievable goal for companies like ours and inspire them to follow suit.

While we take account for our own carbon footprint and diminish it wherever possible, we urge our governments to immediately put in place appropriate structural and legislative frameworks required to limit global warming to 1.5 degrees. Seeing that such achievement appears quite unrealistic, it is even more important to implement a framework of immediate change in order to avoid a climate disaster.

Our CEO, Horst Weidenmüller is the Founder and Chair of the IMPALA Sustainability Taskforce and a founding signatory of the AIM-initiated Music Climate Pact. Together, we are continually working to develop industry-wide sustainable practices and establish public policy advocacy. !K7 have also proudly signed-up to the UN’s Race to Zero pledge through the SME Climate Commitment program.

With our 2021 report completed, our third annual report, we can assess our achievements of our carbon reduction plan initiated in 2020. If we look at the absolute figures, our carbon footprint has grown from 278 tonnes in 2020 by 41 tonnes, totalling 319 tonnes in 2021.

!K7 has continued its business growth in 2021 and in order to look at these figures from the right perspective we look at relative growth of our carbon footprint on a per employee basis (including all emission of scope 1&2).
Our carbon emission has decreased from 2020 when we had 1,376 tonnes per head to 1,150 tonnes per employee in 2021, seeing a 16% decrease. When we compare the 2021 per head emission with our 2019 baseline emission, we come to a 38% reduction per employee.

Unfortunately, we are unable to measure effects of changes we implemented in the vinyl production. Manufacturing accounts for 85% of our overall emissions. Pressing plants in Europe are yet to provide any details on the emission on the parts used for packaging. We hope the EU legislation Corporate Sustainability Reporting Directive (CSRD) will speed up the transparency and will enable us to produce more precise reports in the future.

Our carbon footprint assessment is based on internationally recognised Greenhouse Gas Protocol 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, which in our case involves manufacture and shipment of all releases produced and distributed 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 calculate our emissions using The Impala Carbon Calculator.
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!

Reduction Measures, Targets and 2021 Results
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 evaluations focus primarily on CO2 reduction, we have also included our sustainability initiatives to reduce our overall impact on the environment.

We are excited that such a change is possible and are highly motivated to improve further. We are also aware that our 2019-2021 assessment is blurred by the impact of Covid.

Energy & Electronics

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

Aims and Targets
• Moving forward we will be using low energy computer systems that rely on the next generation of chip technology to reduce our energy consumption even further.
• Results: In 2021 we had a total energy consumption of 74,513 Kwh. Through the above initiatives we have been able to significantly reduce our energy emission from 19 tonnes in 2020 by 21% to 15 tones in 2021.
• In comparison, we have reduced our emission from our 2019 baseline electricity consumption of 96,929 kWh by 29%, from 21 tonnes to 15tonnes.
• Based on our original target, by 2023 we want to have reduced our waste-related carbon emissions by 30% from our 2019 baseline.

• An office recycling program is in place and waste is currently divided for circular materials, paper recycling, food compost, and regular waste.
Wildplastic bags are now in use in all our waste disposal.
• We’ve installed a filtration system providing safe use of tap water, instead of providing bottled water. Other office drinks available, are all delivered as part of the city-wide bottle deposit recycling system.
• We have implemented a cardboard shredder which enables us to recycle all cardboard boxes into filling materials onsite.

Aims and Targets
• We aim to find a better solution for the recycling of our IT waste

• Results: In 2021 we produced 12 tonnes of waste, resulting in emissions of 245kg with a waste production per staff member of 9,07kg. Our waste calculation up to 2021 was based on using the collective waste disposal of our building. The calculation is based on the amount of emptying of the waste boxes based on the square meter. Our intuitive of waste production have not been able to measure because the boxes get emptied in a regular rhythm without considering how full a box is. As of 2022 we have our own garbage bins which will enable us to manage the amount of emptying.
• By 2023 we want to have reduced our waste related carbon emissions by 30% from our 2019 baseline.

• 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 difference in carbon and greenhouse gas emissions for three major business travel destinations (Berlin to London, Warsaw, and Amsterdam) between train and air travel.
• We prioritise train travel wherever possible, even when the travel costs are higher
• 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 car with a leased electric car. By Dec 2022 both company cars will be electric.
• 26 of the 28 staff members either walk, cycle, or take public transport to work. To help facilitate, !K7 has an onsite bicycle docking, as well as showering facilities. The remaining 2 staff members cycle and use the company car when necessary.

Aims and Targets
Our goal is to finetune the initiative we have already implemented and look out for future climate-betterment opportunities for our company.

• Results: We have reduced our travel and fleet emission from 1 tonne in 2020 by 75% to 251kg. The results come mainly from the covid travel restrictions in 2021.
• By 2023 we want to have our fleet & travel carbon emissions reduced by 50% from our 2019 baseline, even with a regular travel behaviour again.

• Plastic CD jewel cases are no longer used for our back catalogue and new releases.
• All cardboard packaging is now produced using FSC paper sources.
• We moved away from single use plastic including shrink wrap, towards long lasting protective plastic sleeves.
• New projects avoid the use of 180g vinyl.

Aims and Targets 
• Our priority is finding a solution to use bio plastic-based vinyl production in the next years.
• 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.
• As of 2023 we will only use water based furnish/printing for all our releases.

In 2021 we manufactured total of 121.673 units. Our absolute manufacturing emission increased by 20% resulting in total emissions of 270 tonnes. Our relative emission on a per unit basis is 2,21 kg per unit which is the same as in 2021 and 2019. We hope to be able to receive more process emission data on the different formats and packaging we use to have a more price picture on manufacturing in the future.

In the 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 the contract.
• In 2019 we have started using sea freight for our shipments to North America, resulting in a significant decrease in emissions and it’s a priority to move more shipments into sea freight.
• Our main warehouse partner is KDG, based in Austria. KDG operates his own solar power system producing the majority of needed energy. The additional capacity comes from 100% renewable energy.
• Our biggest German distributor also uses the KDG warehouse which removes the need for extra shipping for the German market.
• 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.
• We are also actively working with our other warehousing partners to encourage a move to more sustainable shipping solutions.

In 2021 we had shipped 121.673 units producing 16 tonnes of emissions resulting in 0,131 g per unit. Our absolute emission increased by 19% compare to the former year.

The emission per unit increased slightly from 0,129 kg per unit in 2020 to 0,131kg per unit in 2021. This increase comes from a higher vinyl compared to cd share in our shipments.

Many of our current and planned initiatives go beyond carbon reduction and focus on sustainability more generally: 
• Sustainability and reducing environmental impact are now part of our core business strategy and we meet monthly to discuss new ideas and opportunities and track our progress. 
• We are proud to work with many artists who tackle the subject of climate breakdown in their work, and we support their activism in any way we can.
• We moved all our office supply purchases to the sustainable supplier Memo.

In 2021 and we have been able to decrease the emission per unit from 0,244kg in 2019 by 54% to 0,131kg per unit in 2021.

We have been able to increase our sea freight share in shipping from 7,29% in 2019 to 22,18%.

• We aim to reduce our scope 3 emissions by 30% until 2023 on a per unit basis from our 2019 baseline.

Aims and Targets
Key suppliers, distributors and manufacturers will also be asked to share information on their environmental policies and plans.
• Approaches to sustainability will become a formal part in selection process of new suppliers.
• Moving forward we will share our knowledge with our label and business partners to help them ease their way into carbon reduced operations. It’s our priority to reduce emissions regardless of who is emitting it.
• In 2022 we will move to Ecosia as our principial search engine for the !K7 team.
• In 2023 we will switch all our events’ catering to vegetarian food.

Aware that music streaming and downloads generate additional carbon due to 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 regarding 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 search for fully renewable solutions. 

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 develop 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, plant forests 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 the many benefits it brings to a region that has suffered vast deforestation.

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. Especially on vinyl manufacturing which is our biggest area of emissions. Our US and UK operations have been closed for the past two years due to Covid and therefore their emissions data has not been included in the report. We are already gathering this data for next year’s report.
We have made conservative estimates when required, based on all available information. It is not always possible to carry out due diligence on the sustainable promises of all our suppliers and partners, but we trust the transparency will significantly increase in the coming months and years.  
We believe our current assessment provides a good snapshot and a strong benchmark against which to assess our progress in years to come. For all our calculations we have used the Impala Carbon Calculator.

Business Travel: Invoices and travel information from our accountancy department to calculate past travel routes by year.
Fleet Travel: Bookkeeping invoice information and Impala to calculate our own vehicle carbon footprint
Energy: Data came from our annual statement from our electricity providers
Waste: Annual statement from our waste disposal company


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