Climate and Energy

Measurement

In 2007, the company embarked on the first companywide GHG emissions inventory, making calendar year 2006 our first full year of measurement. Given the complex and dynamic structure of the company's activities, it was important to approach the inventory in a clearly defined and systematic manner and in accordance with principles outlined in the World Resource Institute's GHG Protocol. Based on research, we first captured data from facilities.

Disney facilities include our parks and resorts, owned and leased office spaces, cruise ships, retail outlets, restaurants and radio and TV stations. Sources of direct emissions at facilities include boilers, generators, vehicular activity in and around assets, cruise ship engine activity and refrigeration systems. Electricity consumption at facilities results in indirect greenhouse gas emissions. (See table below for calendar year 2006 emissions and electricity consumption data.) The values have been confirmed through an internal validation process, and data gaps have been identified. These gaps will be closed as Disney continues to refine the annual inventory process.

The next two charts illustrate contributions from various asset types to the totals listed in the table above.

Medium-Term Targets

In addition to our initial baseline inventories and emissions measurements, we have also set medium-term reduction targets for Disney facilities as part of our pursuit of our first two goals.

Specifically,

• For direct emissions from fuels: by 2012, Disney seeks to achieve 50% of its long-term goal through a combination of reductions, efficiencies and offsets.
• For electricity consumption: by 2013, Disney seeks to reduce electricity consumption by 10% compared to 2006 baseline in existing assets.
• Disney will develop a plan to aggressively pursue renewable sources of electricity to reduce emissions from electricity.

Disney Commuter Assistance featured Wall-E in a campaign to reduce vehicle-related emissions by employees.

Initiatives

Employee Commuting

One of our goals is to promote more widespread and efficient carpooling and other commuting methods that can reduce the number of employee drivers on the road. With help from rising gas prices and a WALL-E-themed summer promotion, southern California employees reported 195,989 instances of clean-air commuting (i.e. carpooling, walking, mass transit, etc.) during the months of July and August 2008. This is an 18% increase in clean-air commuting instances as compared to July and August 2007.

Additionally in 2008, the company participated in a successful test of zero-emissions hydrogen fuel-cell Chevrolet Equinox vehicles. Executives throughout the company test drove the zero-emissions vehicles for a few weeks each, reporting results to General Motors.

Strive for Five

The Walt Disney World Resort "Strive for Five" energy conservation program won the second annual Florida Energy Achievement Award from the University of Central Florida's Florida Solar Energy Center. This program reduces energy consumption through Cast Member education and other programs. The award was presented for significant achievements in energy efficiency-improvements, conservation and education in Florida. Disney's Strive for Five also received a Sustainable Florida Promising Practice Award from the Council for Sustainable Florida.

Responsible Retail Operations

Our Disney Store operations represent the local face of the company in many communities, not only throughout the United States and Canada, but also in many locations in Europe and Asia. A leader in environmental initiatives, the Disney Store's European distribution center has taken an active role in seeking to reduce its environmental impact through a variety of actions relating to transportation, recycling, composting, sourcing local foods and other areas. These initiatives have delivered real progress. For example, the distribution center has cut energy consumption by over 38% since last year and solar panels provide hot water for over nine months of the year. Check out this video to learn more about the center's initiatives:

Climate Solutions

The company has formed a climate solutions working group to engage each business unit in actively reducing carbon emissions. This group develops strategies for avoiding emissions, reducing emissions through efficiency, replacing high-carbon fuels with low-carbon alternatives and acquiring high-quality offsets for what is left.

We plan to form a green energy working group in 2009 to develop new strategies for pursuing clean energy.

Challenges

Achieving zero net direct GHG emissions depends on the ability to reduce or eliminate consumption of carbon-based fuels such as natural gas, gasoline and diesel, and acquire or generate carbon offsets from projects. Alternative fuels, such as biodiesel, are currently available, but only in limited quantities and for limited applications. In the case of carbon offsets, there is no formal, governmental oversight or regulation of such efforts in the United States. Therefore, caution is required to choose credible partners to generate carbon offsets. Transparency and completeness in reporting are critical, as well as due diligence in selecting carbon offset programs.

Each of the measures needed to meet the electricity targets has its own set of challenges. In the case of improved asset efficiency, an integrated approach toward design will require additional financing. In the case of clean electricity generation, we must identify opportunities for self-generation at a larger scale than anything that Disney has attempted thus far. Finally, procuring clean electricity will be a challenge, especially in light of increased competition for such resources.

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