A majority of the Scope 1 and 2 greenhouse gases we generate are produced through the burning of fossil fuels. As a result, we have implemented a very effective energy management program to reduce the consumption of fossil fuels. We are working diligently to reduce and manage our environmental footprint, including greenhouse gases.
We are committed to reducing our energy consumption, reducing costs, optimizing capital investment for energy efficiency, reducing environmental and greenhouse gas emissions, and conserving natural resources.
The amount of electricity and natural gas used by our utility monitored operations for Fiscal 2022* is as follows:
We continue to utilize on-site generated renewable wood fuels for the generation of steam used in production operations, heating and absorption cooling, and we sell excess wood residuals for further reuse by other industries. Wood fuel from sustainably managed forests is a renewable resource that helps reduce our use of fossil fuels, reduces greenhouse gas emissions and also reduces the volume of waste going to a solid waste landfill.
We have reduced the amount of electricity used by our LZB Branded Manufacturing operations by 23% compared with 2017 usage.
Our Dayton, Tennessee manufacturing facility utilizes a biomass system to heat and cool the facility and provide steam to dry green lumber. This system produces approximately 21 million KW hour equivalent energy units. Our Severn, Maryland La-Z-Boy Furniture Galleries store utilizes photovoltaic electricity.
La-Z-Boy entered into a 10-year resource-backed virtual power purchase agreement (VPPA) extending through the end of 2030 with AEP Energy Partners. The VPPA will support approximately 70,000 MWh of renewable energy per year from AEP’s principally owned Santa Rita East wind energy center throughout the term of the agreement. La-Z-Boy will receive renewable energy certificates (REC) equivalent to roughly 16MW of wind power capacity representing more than 90% of La-Z-Boy’s current total annual domestic energy consumption. The VPPA is expected to cover more than 90% of our Scope 2 emissions in the United States and reduce our overall Scope 1 and Scope 2 carbon footprint by approximately 45%.
The amount of greenhouse gas emissions (natural gas, diesel fuel and electricity) from our utility monitored operations for Fiscal 2022* were:
We engaged a third-party partner in 2021 to complete an evaluation of our Scope 3 emissions to gain a better understanding of our footprint and to identify areas where we could reduce this significant and difficult-to-address emissions category.
Analysis of the data showed that Scope 3 accounts for 92% of our total emissions. Our upstream value chain is responsible for 80% of this total. Purchased goods and services (Category 1) and transportation and distribution (Category 4) are the largest upstream contributors. The downstream, end-of-life treatment of sold products (Category 12) is the second largest contributor, accounting for 18% of our total Scope 3 emissions.
The evaluation also found that our top 50 suppliers produce more than 71% of our upstream emissions, with just five suppliers accounting for 27% of the total.
We plan to develop a supplier engagement program that will encourage our partners to take climate action to reduce their own Scope 1 and 2 emissions, thereby reducing our Scope 3 footprint.
We work to continually improve our environmental performance and promptly evaluate, prepare for and manage new environmental aspects of our business through our EFEC initiatives (American Home Furnishings Alliance).
Our World Headquarters and Dayton, Tennessee Innovation Center are Leadership in Energy and Environmental Design (LEED) Silver Certified from the U.S. Green Building Council; we are currently applying for LEED Certifications for our new England Headquarters.
We recently enhanced our monitoring capabilities by entering a partnership with a third-party specialist for utility bill management, strategic energy sourcing and utilization of a comprehensive energy and sustainability data management system.