Customer travel associated with REI Adventures accounts for our largest single source of GHG emissions. Approximately 90 percent of the impact from an international trip comes from the air travel to a destination.

Because no solution exists to significantly reduce or eliminate the climate impact created by air travel, we partner with the Bonneville Environmental Foundation to offset our customers' travel on their behalf. Our customers' trips are considered carbon-neutral because of our action to offset their travel though the purchase of certified Green-e offsets. Bonneville Environmental Foundation is our partner because the organization's offering meets our standards for validation.

The co-op also offsets the ground transportation for all REI Outdoor School programs, available in most markets where we have a retail presence.

REI recognizes that offsets are not the preferred solution. We seek to reduce our core emissions wherever possible.

RESULTS

With the recovery of the U.S. economy, active travelers expressed an interest to return to international travel and therefore our REI Adventures business also grew. This contributed to a 10.9 percent increase in the tons of CO2 that was offset through our REI Adventures business.

LOOKING AHEAD

REI Adventures will remain a service offering to help our members and outdoor enthusiasts experience the wonders of nature. The programming also reinforces the co-op's purpose to educate and inspire others for a lifetime of loving the outdoors. Because our adventure travel offerings will remain our largest GHG contributor, we continue to assess whether offsetting is the right strategy as we approach a solution for 2011 and beyond.

As our original four-year commitment with Bonneville Environmental Foundation has ended, we are evaluating our options for accounting for the impact of REI Adventures. We recognize the market for carbon offsets has changed dramatically during this time as well as public perception of environmental claims. These factors will be considered in a solution determined in 2011 as the co-op continues to take accountability for these emissions.