Environment

The direct environmental impact of Signet’s operations is judged to be relatively low compared to many business sectors and to other retailers. An environmental impact review confirmed that:

• jewelry has a very long life and is highly recyclable. Recycling takes place in respect of trade-ins, obsolete inventory, used watch batteries and certain packaging;
• jewelry and watches have an extremely high value to weight ratio and value to volume ratio making transportation through the supply chain relatively low impact. Signet makes use of third party distributors and reusable containers for merchandise distribution;
• Signet occupies relatively little space compared to other retailers of a similar market capitalisation and its sales density is above the jewelry sector average;  therefore, it has a smaller physical impact on the environment; and
• Signet’s supply chain originates with the producers of the raw materials with whom Signet presently has little direct relationship but it is recognised that the extraction of minerals has an environmental impact that requires careful management by mining companies. Management considers that the best way the Company can exert influence on mining companies to reduce their environmental impact on the extraction of gemstones and gold, is through industry bodies.

Notwithstanding the above, Signet takes its environmental performance seriously and seeks opportunities to improve it.

Understanding and quantifying our key environmental impacts

Since 2003/04 Signet has continued to develop and test its environmental performance indicators and environmental data collection systems in both the US and the UK.

In fiscal 2008 the Company continued to collect baseline data for energy usage and greenhouse gas emissions (including emissions from business travel) and to validate existing data for water usage. Through this process Signet aims to enhance its environmental management systems and validate the previous year’s results as a basis for setting credible future performance targets and identifying measures that can be taken to continue to improve environmental performance. For example, in the UK during 2009, the Carbon Trust carried out a review of head office and store emission levels and recommended a number of initiatives. These initiatives are currently being implemented accross the UK business. Signet also undertook an energy audit in representative stores in the US.

Environmental data has been collated and trend data across environmental performance indicators is now available from 2002 to 2007 as corporate and divisional data, both as absolute and ratio values. Signet achieved a decrease in energy use and greenhouse gas emissions per unit of turnover year on year from 2004 to 2007. A peer group benchmark exercise has demonstrated that Signet’s environmental performance is broadly in line with that of its peers both in the UK and international retail sector.

Other environmental initiatives

Signet is committed to the process of collating and analysing its 2007 environmental performance data.

During fiscal 2009 Signet continued to collect and assess baseline data for energy use, greenhouse gas emissions and water usage. It also collected baseline data in relation to agreed social and ethical performance indicators related to employee health awareness standards, community affairs initiatives and workplace health and safety. In addition, it set performance targets in other areas of importance.

The US division engaged a consulting firm to identify energy saving opportunities. A detailed lighting analysis has been conducted and as part of a store and real estate project, obsolete ballasts have been replaced with new electronic energy efficient ballasts. A light standard, based on industry standards, has been set for the US divisional office and a lighting retro fit began at the end of December 2006 for all three buildings at the US divisional office and was completed during fiscal 2008. Moisture sensors have been installed in the irrigation system to conserve water use. The US divisional office recycling program has been expanded.

Further, Signet continues to work within the RJC, Jewelers of America, the Jewelers Vigilance Committee, the World Diamond Council and with other jewelry retailers in exploring ways in which the jewelry industry can use its influence to improve environmental performance related to mining.

Environmental Principle

Signet seeks to ensure the efficiency of its business, including the environmental performance of its operations. This includes the use of energy, waste management, recycling and the choice of materials used in our products and locations. Signet’s Statement of Social, Ethical & Environmental Principles reflects our core values to which we expect those with whom we do business to adhere. Being an advocate for high social, ethical and environmental standards in the jewelry trade, we will also seek to use our influence with those with whom we do business to encourage efficient environmental performance.

Environmental Policy

Signet’s Environmental Policy is built on a risk-based assessment of its environmental impact. Whilst its activities are not judged to give rise to significant environmental impact, Signet aims to conduct its business in an environmentally responsible manner. As a minimum, Signet will comply with all relevant environmental legislation. Through the means of an appropriate environmental management system, environmental considerations are integrated into decision-making and relevant targets are set.

Signet recognises that environmental impacts are associated with its supply chain. While the supply chain is long and intricate, and thus beyond its direct control, Signet acknowledges its responsibility to raise the issue of environmental performance within it. We expect the Environment to be protected within the sphere of our suppliers’ influence. This includes undertaking initiatives to promote greater environmental responsibility along the entire jewelry supply chain and encouraging the development and diffusion of environmentally friendly technologies.

Organisational responsibility

The Signet Board’s policy is that relevant environmental management systems are in place in the operating divisions. Divisional management is accountable to the Board for ensuring compliance with local laws, defining roles and responsibilities as well as confirming that appropriate resources are provided.

Framework for management

Divisional management ensures that systems and relevant training are in place so that business decisions take due regard of environmental issues.

Through these systems Signet will endeavor to:

• Ensure compliance with legal requirements in the countries in which it operates
• Train employees on relevant environmental issues
• Monitor, review and report its environmental performance in accordance with local legislation
• Continually seek to improve its environmental performance through monitored targets.

Whilst Signet's risk-based assessment of its environmental impact resulted in the direct environmental impact being considered to be relatively low compared to many sectors and others in the retail sector, Signet recognises that there may be opportunities to improve its performance. The relative environmental impact is considered to be low based on a number of factors which included jewelry having a very long life and very high recyclability; the Company’s ratio of sales to square feet of occupied space in stores or warehouse accommodation being very high compared to that of other retailers and above the jewelry sector average; and jewelry and watches having an extremely high value to weight ratio and value to volume ratio making transportation through the supply chain relatively low impact. Signet’s supply chain ultimately stretches back to the producers of the raw materials with whom the Company does not have a direct relationship but it is recognised that the extraction of minerals has an environmental impact that requires careful management. Management believes that the best approach in this area is on an industry wide basis.

Procedures that help to minimise Signet’s direct environmental impact include the use of third party distributors to improve the efficiency of distribution from its central warehouses in the US and UK to its stores; the utilisation of reusable containers for transferring merchandise to and from the warehouses and the stores; and the recycling of merchandise that is traded-in, obsolete inventory and used watch batteries.

POLICY REVIEWED OCTOBER 2009