Methodologies and boundaries

Our emissions calculation methodology applies the “Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition” (GHG Protocol), supplemented by the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard.”

Emission factors

For our GHG calculations, we utilise emission factors derived from established and authoritative sources. These include Ecoinvent, Exiobase, IEA, AIB, DEFRA/BEIS, NTM, governmental bodies (EU and Swiss-based among others), including those at the EU and Swiss national levels. To determine our total emissions, we multiply the relevant emission factors by the best available and most appropriate data for each activity or source.

Data sources and assumptions

GHG inventory

SMG’s GHG inventory is based on a combination of primary and secondary data. Where activity-based data was unavailable, secondary data including spend-based estimations, industry-average emissions factors, and extrapolations from similar operations or locations was used. This reliance on secondary data introduces an additional level of uncertainty in the input data and emission factors used for the calculations.

Our calculated GHG emissions are subject to inherent scientific measurement uncertainties associated with the methodologies used to estimate emissions. These uncertainties arise from the mathematical models applied to represent relationships between various parameters and emission processes.

The calculated carbon dioxide equivalent (CO₂e) emissions are inclusive of carbon dioxide (CO₂), nitrous oxide (N2O), and methane (CH4). The other GHG gases sulphur hexafluoride (SF6), perfluorocarbons (PFCs), and nitrogen trifluoride (NF3) are not emitted.

Emissions of non-CO₂ GHGs have been converted to CO₂e using the conversion factors from the IPCC's Fourth and Fifth Assessment Reports.

Outside of Scopes 1, 2, and 3

Biogenic CO₂ emissions from biogas combustion are excluded from our Scope 1 emissions in line with the GHG Protocol. These amounted to approximately 0.8 tCO₂e in 2024 and 0.9 tCO₂e in 2023.

Energy consumption

We collect and report primary activity-based data to calculate our total energy consumption across all operations. Where such data was not available, estimations were made through extrapolation from comparable sites or activities to ensure a complete and as representative dataset as possible.

In Switzerland, energy consumption benefits from a high share of renewable sources. Our office locations in Switzerland fall under the national electricity disclosure regime, which ensures transparency around the origin of electricity. For each Swiss site, we hold contractual proof from electricity suppliers specifying the renewable energy mix associated with the electricity we purchase. These disclosures are legally supported by Guarantees of Origin (Herkunftsnachweise, HKN), issued and tracked through the Pronovo system in accordance with the Swiss Energy Ordinance. For our international operations, where we validated the renewable nature of purchased electricity we relied on Guarantees of Origin, ensuring traceability and transparency in our reporting.

Organisational boundaries

Our organisational boundaries are defined to ensure a focused and material approach to GHG accounting. All relevant subsidiaries, activities, and units under operational control of our company are included.

For the reporting periods of 2023 and 2024, a limited number of locations were excluded from the GHG inventory. These were small or low-occupancy offices and non-operational sites, each characterised by minimal use (typically fewer than 10 employees, often only one on-site daily).

These exclusions were made due to limited operational significance. For 2024, their combined contribution to total emissions is less than 0.5% of total emissions, based on conservative modelling. As such, they are not expected to affect the completeness or representativeness of the reported emissions.

These exclusions support a GHG inventory that remains focused on material sources of emissions, aligned with our organisational boundaries and operational realities. This approach helps maintain the integrity, accuracy, and relevance of our sustainability reporting.

Operational boundaries

The applicability of Scope 3 categories has been assessed in alignment with SMG’s business model. As a digital company, we offer transactional and advertising services through our online platforms. SMG does not manufacture or sell the products exchanged on its platforms but instead acts as a facilitator.

As a result, only the following Scope 3 categories have been included due to their relevance to SMG’s operations:

• Category 1 Purchased Goods and Services: Emissions from the most relevant expenditure areas, such as external data centres, office supplies, water use, and other key professional services across our operations, such as software, hosting, and advisory services.²⁵ The calculation is primarily spend-based, except for tap water, which is calculated by volume, and for several external suppliers and external data centres, where emissions are based on supplier-specific data or data volume usage.
• Category 2 Capital Goods: Emissions from the purchase of tangible assets. The calculation is partly spend-based and partly based on average data and follows a category-based approach, using emission factors assigned to specific types of goods.
• Category 3 Fuel- and Energy-Related Activities: Emissions from upstream activities associated with the production and transmission of purchased fuels and energy (not included in Scope 1 and 2) fall under this category.
• Category 5 Waste Generated in Operations: Emissions from company waste are calculated based on the volume of waste generated at office locations and the associated waste treatment methods for its disposal.
• Category 6 Business Travel: Emissions from business travel are calculated based on distance traveled per passenger across various transportation modes, hotel stays, and pre-calculated emissions data provided by our travel management platform and other relevant suppliers.
• Category 7 Employee Commuting: Emissions from employee commuting are calculated using 2024 group-wide survey data on commuting habits and estimated distance traveled by transportation mode.
• Category 11 Use of Sold Products: Emissions from the use of our sold products are estimated based on user interaction with our platforms, calculated using average usage time and the associated energy consumption.

Significant changes from 2023 to 2024

In line with our commitment to continuously improving data quality, we regularly review the scope of our assessments and the relevance of emission categories. As part of ongoing efforts to refine environmental reporting, we account for changes due to acquisitions, adjustments to the scope of application, and updated emission factors.

We have established 2023 as our base year for GHG emissions. Organisational boundaries and methodologies have been applied consistently to both 2023 and 2024 to enable comparability over time.

As part of the development of our first GHG inventory, emissions data for 2023 was refined to reflect the inclusion of newly acquired entities and methodological improvements. These adjustments were made prior to publication and are reflected consistently across both reporting years.

While methodologies have been largely consistent, the following updates were introduced in 2024:

• Emission factors were updated in 2024 to reflect more accurate or recent data sources.
• Activity data was refined through improved reporting methods, resulting in increased accuracy.

Climate scenarios

• The Net-Zero Scenario (1.5°C) represents a rapid decarbonisation pathway aligned with global net-zero commitments by 2050, requiring significant emissions reductions across all sectors.
• The Announced Pledges Scenario (1.7-2°C) assumes the implementation of current national climate commitments, with moderate emissions reductions, particularly in sectors such as energy and transportation.
• The Stated Policies Scenario (2-2.5°C) reflects the continuation of existing climate policies without major new commitments, leading to a slower decarbonisation trajectory and a temperature rise of up to 2.5°C.

These key climate scenarios are derived, using data from authoritative sources, including the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and the Network for Greening the Financial System (NGFS). We apply them across three time horizons (short-term: 2025, medium-term: 2030, long-term: 2050), with a primary focus on the next decade to assess near- and medium-term business implications.

Methodology to identify key risks and opportunities

We applied a structured process to identify the key climate-related drivers most relevant to our business model.

In a qualitative assessment, we reviewed our enterprise risks and business model to compile a comprehensive list of potential climate-related drivers. This included mapping our value chain to understand dependencies between suppliers, internal operations, and consumers. External climate and socioeconomic datasets were leveraged to provide science-based insights into the potential physical and transitional impacts of climate change.

The identified drivers were then assessed and refined through peer reviews and targeted research into relevant market and environmental factors. Each risk and opportunity was evaluated using a likelihood and impact scoring methodology, supporting prioritisation for further analysis and integration.

Findings were validated at multiple levels of governance, including review by the Sustainability SteerCo, approval by the ELT, and formal acknowledgement by the BoD. Key risks and opportunities were embedded into our ERM system for ongoing monitoring, mitigation, and reporting. Further details on how climate and sustainability risks are integrated into our broader risk management process can be found in the Integrating sustainability into the ERM framework section.

Summary of potential impacts of climate-related risks on the technology industry

• Rising operational costs: Volatile energy prices, driven by extreme weather events and shifting climate patterns, increase operational expenses.
• Economic disruptions: Environmental disasters, such as floods and heatwaves, weaken economic growth, reduce consumer purchasing power, and lower transaction volumes.
• Regulatory pressure: Stricter ESG and carbon emissions regulations demand investments in cleaner technologies and process modifications, leading to added costs and operational shifts.

Summary of potential opportunities of climate change on the technology industry

• Innovation in data analytics: Advanced analytics enable businesses to optimise operations, reduce emissions, and drive sustainable innovation.
• Sustainable product development: Rising demand for low-carbon technologies and circular economy solutions create new growth opportunities.
• Market growth in digital commerce: Increased focus on sustainability drives platform traffic and sales, aligning business success with environmental benefits.

These opportunities and risks manifest across short-, medium-, and long-term horizons, each influencing SMG’s strategy to different extents. As a result, SMG’s approach remains adaptable and is designed to evolve accordingly.

Adaptable and resilient: The enduring strength of our business model

SMG has assessed the resilience of its business strategy against the three climate scenarios outlined at the start of this section. Across all three scenarios, our diversified business model enables us to navigate climate risks, including rising energy costs, economic disruptions, and regulatory changes. By assessing climate impacts, we enhance operations, financial planning, and sustainability reporting while leveraging opportunities in the low-carbon and circular economy.

Our climate scenario analysis confirms the resilience of SMG’s strategy under moderate as well as accelerated decarbonisation pathways. Proactive investments in sustainability, operational efficiency, and digital infrastructure enable SMG to mitigate exposure, enhance long-term competitiveness, and support business continuity.

Managing energy price volatility

To manage energy price volatility, SMG is advancing a targeted energy transition strategy. This includes the optimisation of IT infrastructure through cloud-based solutions and active engagement with data centre providers to ensure hosting services are powered by renewable or low-carbon electricity. Our office network is also transitioning to renewable electricity, with all Swiss offices already powered by certified clean energy. In shared buildings, we are engaging stakeholders to obtain contractual proof of renewable sourcing. Internationally, we continue to pursue low-carbon electricity options in markets where clean supply remains limited.

Adapting to shifting consumer behaviour

We believe SMG is well-positioned to respond to changing consumer preferences, associated with accelerated decarbonisation pathways, particularly the growing demand for affordable, sustainable, and circular products. The transition to a more circular economy aligns with our business model, creating opportunities to increase platform listings for second-hand items.

Enhancing regulatory preparedness

SMG has established a central GHG emissions inventory and is implementing a compliance framework. We are expanding our Sustainability Team to ensure transparency and adaptability in response to evolving regulatory requirements.

Overall, SMG’s climate scenario analysis demonstrates that our business model is resilient across a range of climate futures. Our proactive investments in sustainability, operational efficiency, and digital innovation enable us not only to manage risks, but also to seize opportunities that strengthen our long-term competitiveness. This reinforces our commitment to building a more future-proof, responsible, and climate-resilient organisation.

In 2024, SMG partnered with an independent climate tech company to conduct our first-ever estimation of net avoided emissions resulting from second-hand transactions across our three General Marketplaces: Ricardo, anibis.ch, and tutti.ch. This builds on earlier efforts to estimate and display indicative carbon savings at item level on Ricardo listings. The 2024 analysis uses an improved methodology, offering a more comprehensive and consolidated view of the net climate benefits enabled by circular consumption across our platforms.

The full methodology and detailed results will be published in our 2024 Avoided Emissions Report.

Consequential LCA approach

The estimation follows a consequential Life Cycle Assessment (LCA) method, aligned with internationally recognised guidance from the World Resources Institute (WRI). By combining real marketplace activity data with extensive survey input from buyers and sellers, we can accurately assess how second-hand shopping displaces new purchases, and how much carbon it avoids.

The analysis incorporates three key components:

• Alternative scenario emissions
  The full cradle-to-consumer footprint of a new product that would have been purchased instead. This includes emissions from raw material extraction, manufacturing, distribution, and final delivery.
• Replacement rate
  The proportion of second-hand purchases that actually displaced the purchase of a new product, based on user-reported behaviour. This metric varies by product category.
• Emissions from second-hand transactions
  The carbon footprint associated with the second-hand exchange itself, including: delivery emissions (e.g. post, local pick-up), packaging emissions, and SMG's operational emissions related to facilitating the transaction

The survey data informs the replacement rate, but also provides granular inputs on user behaviour, such as delivery methods and packaging choices, which directly influence the emissions associated with second-hand transactions. This integration of behavioural science strengthens the credibility and accuracy of the estimation.

The avoided emissions were determined using the following logic:

Net avoided emissions
= (Alternative scenario emissions × Replacement rate (%))
− Emissions from second-hand transactions

This methodology ensures that SMG’s contribution to circularity and climate mitigation is measurable, transparent, and grounded in scientific best practice.