FENIX OUTDOOR CSR 2013 - UN Global Compact
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contents 03 Preface 04 1. At the core of our business: sustainability 08 2. nature 16 3. economy 19 4. society 22 5. well-being of people 26 6. reporting Contact for the CSR Report: Aiko Bode Chief Sustainability Officer P.O. Box 209 891 25 Örnsköldsvik Sweden phone: +46.660-26 62 00 E-mail: sustainability(at)fenixoutdoor.se 2 CSR 2013 Fenix Outdoor AB (publ)
Dear Reader, For over six decades Fenix Outdoor and its brands have been On behalf of the Executive Board, I would like to thank all of empowering people to explore the outdoors. Our business is our employees. Their performance in 2013 was, once again, driven by our passion for the outdoors and the people working remarkable. With their expertise, their knowledge of the mar- together with us. Fenix Outdoor achieved its major goals in the ket, their passion for the outdoors and their enthusiasm about 2013 business year and simultaneously laid the foundation for our products they are key to the success of Fenix Outdoor. future growth. They guarantee our continued learning experience and further A fixed component of our strategy is our unwavering com- growth. mitment to sustainable operations and principles of the UN We have a lot of goals for our future and together we began Global Compact. Our aspiration is to play a key role in shaping to make them a reality in 2013 and beyond. A fruitful dialogue a sustainable future that meets the challenges we are faced with our stakeholders to become a leading outdoor group in with for both society and the environment we operate in. the area of sustainability is therefore our chosen way. This We are proud of what we have reached so far in this endeav- report helps to outline our challenges in more detail. I want to or, but know that a lot of work is still to be done. Our base- invite you to read it with a critical eye in order to identify our camp – as depicted in the last year’s first assessment of where undesirable developments at an early stage. In this way we can we stand – was further developed. We incorporated the Fenix find proper solutions and avoid them in the future. I hope you CSR strategy 2020 in every brand’s company culture and man- find this report informative and value the way we pursue sus- agement with individual focus areas. We improved our compli- tainability at Fenix Outdoor. ance system by implementing a supplier code of conduct and responding to internal and external audits. We made progress to manage the chemical input, resource efficiency and worker Yours, safety in the supply chain. Initiatives like the cooperation with the FLA and the Higg Index, guide us on this way. Various in- Martin Nordin, President & CEO house courses were scheduled this year and the employees and suppliers were happy to be part of the agenda 2020. CSR 2013 Fenix Outdoor AB (publ) 3
1. AT THE CORE OF OUR BUSINESS: SUSTAINABILITY We have challenged ourselves to push sustainability initiatives in 2013 to another level. A holistic focus on both environmental and social efforts is applied for our products, our operations and our supply chain. COMPANY OVERVIEW: their business and make it a strategic have been assigned CSR and Compliance GOVERNANCE AND STRUCTURE element for all operations. responsibilities. The CSO (Chief Sustaina- The Fenix Outdoor Holding offers bility Officer) is part of the senior manage- OF CSR ACTIVITIES guidelines and guiding principles to all ment team and directly reports to the CEO Fenix Outdoor is one of the world’s lead- companies within the group to enable and President of the Group. His remits in- ing providers of high quality outdoor them to structure the sustainable sourc- clude coordinating and setting the group equipment. The group originates in ing, manufacturing, and product distri- wide CSR and sustainability activities and Örnsköldsvik and is comprised of five bution. The entities focus on product projects, coordinating between entities outdoor equipment and apparel compa- design, marketing, retail, sales, and aim and pooling of the sustainability program, nies as well as two retail chains. These for consumer engagement. collaborating with stakeholders as well as entities may come from very different In light of the above, no organizatio- engaging in philanthropic endeavors. The roots but all have one goal in common: nal changes have been made compared CSO also regularly conducts trainings and to integrate sustainability at the core of to 2012. Two additional staff members educational informational workshops. 4 CSR 2013 Fenix Outdoor AB (publ)
Organisation Structure President Martin Nordin Vice President Martin Axelhed Alex Koska COMMON BRANDS RETAIL IT ADMIN. CSR / CSO LOGISTICS NATURKOMPANIET PARTIOAITTA BRUNTON HANWAG FJÄLLRÄVEN TIERRA PRIMUS Sustainability is an Integral Part of Our includes a Code of Conduct and a Suppli- In 2013, we reached a big step on the Organizational Structure er Code, thereby combining sustainabil- way to implement a continuous compli- Fenix Outdoor is committed to sustain- ity and compliance. This document has ance system in all our locations around able development and CSR and respects since been and continues to be actively the world as well as in our supply chain. the universal principles and values laid incorporated in Fenix Outdoor business. Fenix Outdoor has established a strong down in relevant documents and con- We believe that honesty, integrity, and set of social compliance standards ventions of the United Nations and the respect are crucial when doing business, and procedures that apply to all of the European Union. For us this especially no matter who we deal with – staff mem- brands’ suppliers. We are convinced that applies to the regulations and agree- bers, business partners or intermediaries. business ethics, values and compliance ments governing human rights, labor Fenix Outdoor values the principles of form the cornerstones of every reliable standards, children’s rights, environmen- the Fenix Way by asking all employees sustainability management approach. By tal conservation and protection, and the and suppliers to read and acknowledge the end of the year about 78 % of all core fight against forced labor and corrup- the codes and to give strong support as Fenix Suppliers (excluding one brand, tion. We signed the UN Global Compact they carry out their daily responsibilities. which is still in the beginning to send and live up to its ten principles. Fenix During the calendar year, trainings and out the Code) have signed the Code of Outdoor incorporated these principles workshops about the Fenix Way and the Conduct or delivered evidence that they in its Codes of Conduct, the mission sustainability and compliance program share the principles and values there- statement and the Fenix Way. These were held and well received. More than in. Building a meaningful compliance documents not only give meaning, but 130 staff members at 5 locations received system we are currently developing the also constitute the strategic and ethical an in-person-training. The Intranet as seven core elements: framework of the group’s sustainability another platform for information was also management. developed and is continuously updated. 1. Establish Policies, Procedures and The focus of our work in 2013 was on These efforts have proven to be a popular Controls the deepening and institutionalization of and efficient means of keeping our 2. Exercise Effective Compliance and sustainability across all the companies employees around the world abreast of Ethics Oversight and incorporating it into the individual trends, products, and internal measures as 3. Exercise Due Diligence to Avoid strategic plans for 2020. Those plans we progress on our sustainability agenda. Delegation of Authority to Unethical detail for each brand and the retail busi- Individuals nesses concrete sustainability goals for 4. Communicate and Educate Employees 2020, as well as projects and milestones, COMPLIANCE AT FENIX OUTDOOR on Compliance and Ethics Programs in order to achieve the overall Fenix The adherence to law and regulations is 5. Monitor and Audit Compliance and Outdoor goals. important in conducting our business. We Ethics Programs for Effectiveness In 2012, Fenix Outdoor developed a require compliance with our Code of Con- 6. Ensure Consistent Enforcement and managerial guidance document that in- duct, but also want to build on experience Discipline of Violations corporates the company’s values, ethical and ensure that our staff and business 7. Respond Appropriately to Incidents principles and sustainability goals. Those partners share the same understanding of and Take Steps to Prevent Future are documented in The Fenix Way. It also compliant behavior and business dealings. Incidents CSR 2013 Fenix Outdoor AB (publ) 5
In 2013, four of the seven elements were the future and our company wide vision us to focus on reducing environmental well established and two underway. We is therefore to: and social impacts at each stage of our aim to have a fully operational Compli- products’ respective life cycles. As our ance Program in 2014. “LEAVE THE BASECAMP BETTER most significant impacts occur in very THAN YOU FOUND IT”. different areas during the life cycle of our products we have concentrated our SUSTAINABILITY AT FENIX OUTDOOR efforts on addressing the four cardinal OUR SUSTAINABILITY APPROACH Over the past six decades, there have directions, N for Nature, E for Economy, been tremendous advancements in In an ongoing process we evaluate where S for Society and W for Well-being of technology, product performance and our greatest impacts are and where we our Compass. We believe that business manufacturing productivity in the out- have the best opportunities to make im- should, in every aspect of its opera- door apparel and equipment industry. We provements. Fenix Outdoor has – based tions, contribute to happier and healthier know that industry developments come on the stakeholder survey and its con- people; stronger communities; healthier often at the expense of the environment, solidated results – developed the Agenda more resilient natural systems; and top society we live in, and people we work 2020 to address topics which are of high- financial performance. These goals shall with. Fenix Outdoor has always strived est importance for the group’s endeavor. be addressed simultaneously, but of for sustainable solutions in these devel- On a brand-specific level, a prioritization course with reasonable priority setting opments. With straightforward ideas on of issues is more effective than to just within each area. materials, manufacturing, packaging, implement a standard on a group level. During this year we especially concen- distribution, product use and the end Hence, in 2013 all brands came up with in- trated on raw materials used, the treat- of life of a product, we address these dividual action plans and implementation ment of these materials, possible reuse existing issues. We are proud of what guidelines for their respective businesses. and recycling strategies, and the control we have reached so far, but also know of our supply chain. that our approach to sustainability has to Focus Areas All entities at Fenix Outdoor have continually develop to be effective and The process is guided by The Fenix Way committed to develop and strengthen actually make an impact. Our goal for Management Compass® tool. It helps their Sustainability Program. Sustainability In Retrospection: The Map of Highlights 1968: First Fjällräven Greenland Jacket→ impregnation with wax 1983: Tierra – solely European production 1990s: Save the Arctic Fox Project 2006: Primus develops the efficient ETA stove series 2010: Fjällräven honorable mention from Animal Welfare Sweden for the Fjällräven down handling practices 2012: Introduction of Bio leather to some of our Hanwag shoes 2012: The Sustainability Line “Numbers Series” by Fjällräven is presented 2013: SAC & FLA Membership 2013: Introduction of “Solution dye” in products 6 CSR 2013 Fenix Outdoor AB (publ)
Raw Material our approach to ethical sourcing. This Extraction partnership enables us to further develop and strengthen our relationships with suppliers and their constituencies. It also allows us to collaborate with other Manufacturing actors in our markets as we believe this End of Life Production can positively impact our working envi- ronment. Based on the stakeholder survey we Fenix Products conducted in 2012, which was deepened by individual expert interviews in early 2013, we have incorporated the findings Product Use / Reuse Packaging in the respective corporate CSR and sus- tainability long-term strategy until 2020. In 2013 we also worked closely with Sustainable Fashion Academy (SFA) and the German Round Table Code of Conducts. Retail Transport SUMMARY ASSESSMENT In 2013 we continued to assess and All group companies have developed cus- last business year and plan for the future manage sustainability and compliance- tomized sustainability strategies within to foster bold and creative solutions. We related risks. Among others, supply chain the framework of the Fenix Outdoor also strive to build relations with like- risks and the chemical load of textiles 2020 goals. The responsible employees minded corporations, scientific insti- ranked high on the agenda. In order to within the companies adapt group re- tutions, civil society and governmental systematize and professionalize supply quirements to individual brand cultures groups. This multi-stakeholder approach chain related issues, we partnered with and requirements and communicate is an appropriate means to identify and the Fair Labor Association. We expect and coordinate brand-specific CSR and address relevant issues. Since 2012 we that this partnership will help identify sustainability activities with and to the are an active signatory to the UN Global and mitigate relevant risks such as wor- CSO. Twice a year, during the so-called Compact and until the end of 2013 have kers rights and compliance violations of kick-off meetings for each season, the been part of the Steering Committee for our Code of Conduct, and help to raise CSO gives an account of the status of the the national German Global Compact awareness among our local partners implementation of the sustainability go- Network and the Council of its Foun- and their constituencies. In addition we als and reports on the progress on each dation. During the reporting period we realized that the precautionary principle of the brands’ agendas. On emerging is- joined the Sustainable Apparel Coalition is important when environmental risks sues, information is also delivered on an (SAC) and the Fair Labor Association are concerned. The continued pressure ad-hoc basis via the Intranet site. (FLA). As of 2014 we will take part in the by NGOs regarding the phase-out of PFC- Global Compact Nordic Network under based durable water repellencies (DWR) the umbrella of the Swedish national or the traceability of animal-derived MULTISTAKEHOLDER ENGAGEMENT group. products, such as down, gave us confi- As a responsible societal actor, we build We joined the SAC in April 2013. This dence that we chose the right key issues on a vast and strong network of partner- multi stakeholder initiative includes to work on. As we have been actively ships. leading apparel and footwear organiza- dealing with these supply chain and che- In 2013, Fenix Outdoor has begun tions, trade associations, NGOs (Non- mical issues we are now hoping to share to expand its stakeholder engagement Governmental Organizations), academic our knowledge and experiences with program. Based on the outcome of our institutions, and governmental organiza- other companies through the European 2012/2013 surveys we developed a mate- tions. The focus of the SAC is the deve- Outdoor Group or the Outdoor Industry riality matrix and began to identify areas lopment and application of the Higg In- Association of the USA and other rele- in which we could improve our perfor- dex, an online assessment tool designed vant stakeholder groups. mance. An overview of the matrix and to measure the sustainability impacts of From a compliance perspective we the conclusions drawn can be found in apparel and footwear. We use the Index realized that it is becoming more and our last year’s report http://www.fenix- to measure and assess our efforts to im- more important to perform systematic outdoor.se/wp-content/uploads/2013/04/ prove in all areas of our business units. risk assessment based on corporate Fenix-Outdoor-AB-CSR-report-2012-.pdf. The FLA is a multi-stakeholder initia- functions, markets, legal provisions and Despite our intention, we were not able tive that helps raise the social and labor intellectual property. We continue to col- to deliver on a Round Table meeting, conditions of factory workers by pro- laborate with authorities to avoid and re- due to time and resource constraints. We viding independent monitoring as well duce counterfeits and theft of know-how aim for that meeting in 2014 and hope to as support and training for companies and data. These issues also pose indirect deliver some meaningful outcomes. We all around the world. For us it constitu- economic risks and have been reflected intend to re-evaluate the activities of the tes a forum and possibility to improve and assessed by the Board. CSR 2013 Fenix Outdoor AB (publ) 7
2. NATURE As a family of outdoor brands, our core business is equipping people to spend time in nature. Our directive is therefore to act responsible towards the nature we love. The basis for our care for the environ- sustainability action on all levels of the • Contributions to environmental pro- ment and the welfare of animals is organization within each brand. tection and support projects towards deeply rooted in our history and origins. While addressing the important issues biological diversity We strive to apply a precautionary ap- and challenges for our group, Fenix Out- proach in all our operations in order to door and its entities concentrated their RESOURCES AND EMISSIONS reduce our impact and even make a posi- action mainly on these areas: tive contribution. Therefore we evaluate • CO2 emissions reduction projects: Protecting the environment and the di- what we have done so far, try to optimize striving towards carbon neutrality versity of ecosystems is of high impor- our approach if necessary and set new • Improved eco-profiles of materials tance to us. Climate change is consid- objectives. Every year we try to reach used (collaboration with the SAC and ered to be a threat to our world as we our group-wide and brand-specific goals application of the Higg-Index) know it today. We therefore address written down in the Fenix Way. But we • Optimize production processes for climate change issues as challenges and know that many small steps are neces- more sustainable solutions work on those to mitigate and reduce sary to achieve the targeted sustainabil- • Eliminate hazardous chemicals our own contribution. ity goals and we therefore encourage • Control over animal derived inputs In 2013, our data collection improved 8 CSR 2013 Fenix Outdoor AB (publ)
CO2 emissions from heating, cooling and electricity Primary Energy = 8,5 t CO2e Primary Energy = 438,6 t CO2e Electricity = 1034,2 t CO2e Electricity = 875,6 t CO2e ( 89 % of staff represented ) ( 95 % of staff represented ) 2012 2013 and hence the figures given became more data. However, the 2012 and 2013 figures to come. First calculations show that the reliable. However, we also have to note cannot be compared due to the fact that impact of low-emissions vehicles is re- that in certain areas the data quality de- data was reported differently in 2012 and levant to the overall CO2 emissions from teriorated. Against this background it is 2013. The numbers for 2013 in the table business travel. Moreover, some collea- extremely difficult to draw conclusions below show the average CO2 emission gues challenge themselves by using even from individual data sets and we are still per shipment. Looking into the sheer more environmentally friendly modes of in the process of consolidating the data numbers of shipments we are concerned transportation for commuting (available we have. With some limitations we can about the air freight figures as air freight data not representative). Subsequently say that we have captured about 95 % is the type of shipment that produces our staff uses carbon-neutral trains, of our locations and staff members and the largest CO2 emissions per shipment. bikes, skateboards and various other hence are at a point that we capture the Here shipments have doubled and we forms of transportation to reach work. full band-width of our operations in those will strive to turn back this development A remarkable challenge was initiated areas, material to our stakeholders. in 2014 through joint efforts between our by our Chinese colleagues who traveled 2013 shows that our overall CO2 emis- production and logistics units (planning, around 3 000 km by bike. In our retail sions have risen compared to 2012. This forecasting, optimization of packaging, operations in Sweden, staff members, is the effect of more data from more shipment routes etc.). An overall growth on a voluntary basis, registered how locations and the growth in business op- of shipment numbers is caused by the they commute to work: a data set of erations. We also have increased overall growth in sales. over 40 000 entries showed that around shipments and visits to factories, entered 39 % use public transportation, 24 % use new markets and increased inspections their own vehicle and 35 % use bike, BUSINESS TRAVEL of our suppliers. skates, walk, jog or row to work and by We invested in renewable energy. Fenix Outdoor developed a new car that combining commuting with some Our core operations in Germany only policy in 2013 coming into force in 2014. physical exercise. use electricity from renewable energy For the first time a CO2 emissions target and partly heating from a bio gas plant of max. 130 g/km was set for the entire OFFSETTING OUR IMPACTS operated by an organic farm. Sweden fleet. The goal is to outperform this tar- and Finland partly use green power. get by 2018. In order to achieve this, new Because we are not yet able to eliminate Subsequently the CO2e emissions from cars for the fleet can either be electric our energy-related emissions, we deci- electricity use went down. We also or hybrids. This change-over should be ded to offset some of our greenhouse gas invested in renovations in our Estonian visible in the emission rates in the years emissions by investing in carbon offset operations, generating annual energy savings of 11,25 %. 2012 2013* SHIPMENT OF GOODS 1 418,5 Based on the various modes of trans- portation and the individual vessels, trucks and aircrafts used, a total of 97 154 844 770 tons of CO2 emissions were calculated 570,6 (without direct shipments to the USA). 458 We have now a reasonably holistic 141 171 picture on all major emissions from 3,9 shipments and can therefore say that we Road transport Sea freight Air freight Total are probably the first outdoor company that can deliver reasonable and reliable *Average t CO2 emissions per shipment CSR 2013 Fenix Outdoor AB (publ) 9
projects. Fenix Outdoor and its brands to 80% of water in the dying process can we encourage the repair and reuse of it. invest in different projects, but all are re- be saved. In 2013 less than 2,5 % of all items sold lying on the Gold Standard or compara- In 2013, a total of 7 768 cubic meters through our warehouse in the Nether- ble certificates. Fenix Outdoor invested (calculated) of water was used for our lands was returned; the majority was re- in a project that recycles and utilizes own operations. Compared to 2012 this turned because of false address labeling waste gases within the coke production is an increase of 2 487 cubic meters, of and the increasing eCom business. We process to generate sustainable power in which about 1 000 was due to leakages may see a further increase in the years to China (a video can be watched at http:// and irrigation needs. The leakages have come due to the expanding eCom busi- www.southpolecarbon.com/video/vi- been fixed over the year and consump- ness. However, only 0,3 % were returned deo0303_web.mp4?autoplay=1). Primus tion at the respective site should be back because of quality issues and of those offsets all its gas, gas cartridge and ETA to normal figures in 2014. The water is about 50 % were repaired or cleaned and stoves with the Dark Woods Project drawn from community supply (mainly used again. The remaining 0,1 % was re- which helps to conserve 55,000 hecta- groundwater, some lakes in Scandinavia) stocked, given to charity, or destroyed. res of forest area with trees up to 600 and used mainly for drinking and house- Additionally, we try to steadily im- years old. Fjällräven on the other hand hold-like use. All effluents were collected prove our waste management system. applies a different approach. Checking in community sewers and treated at a We monitor and minimize hazardous the life-cycle of selected products and public treatment plant. No chemicals waste and dispose it of in a safe way. scientifically assessing how much CO2 is were released by our own operations Compared to 2012 (data in brackets), emitted during their production, allows into sewers or surface water bodies. the amount of waste (representing tracking back the impact to the indivi- We strive to reduce the use of water 10 % to 20 % of the operation, reflecting dual product. Already in 2008 Fjällräven and at the same time also decrease the three sites) is increasing about 8,9 % and introduced the first climate-compensated discharge of water as well as improve correlates with the rate in which our series of the Kånken backpack, and since the quality of our waste water. sales have grown. Hence, we decided 2010 compensations are also made for Therefore it is necessary to involve the to monitor these effects and launch a the Kajka and Kånken backpacks as well suppliers and constantly be searching for group-wide project on this issue in 2014. as for the garments from the Eco-Shell new innovative sustainable solutions. Unfortunately the data quality 2013 for series. In 2014 additional full lifecycle To improve our water management waste is less solid than 2012 because two assessments for at least five top selling system we cooperate with the Swedish major operations have remodeled their products are planned. Textile Industry`s Water Initiative. With business operations and not reported Carbon-offsetting in 2013 amounts to its Water Management Guide our supp- sufficient data. Therefore the table below a total of 4 355,6 t CO2e through various liers are addressed and educated to use is incomplete and not very reliable. We projects (in 2012: 3 590 t CO2e). water more efficiently and sustainably. strive to improve this in 2014. Our major apparel entities will monitor the suppliers with an established base- WATER INNOVATIONS AND line in 2014. A pilot project with the top Clean freshwater is scarce in several re- five fabric suppliers will be in place by RESOURCE EFFCIENCY gions of the world. Unfortunately those the end of 2020 to better manage water Innovative solutions are necessary to regions are the most suitable ones to efficiency, water pollution prevention become more sustainable. They are a grow thirsty crops like cotton. Manufac- and wastewater issues. key to constantly improve the function- turing of products, especially our out- ality of our products and to reduce our door apparel and equipment products, environmental footprints in the products’ WASTE can be a water-intensive endeavor. From entire life cycles. In the following section the growing of fiber, to the washing, A working waste management system we report highlights innovative industry treating and dyeing process of various is another major aspect of a responsible solution applied in our Group. materials, tremendous amounts of water way to produce and sell products today. are used. In 2012 we have introduced Our approach covers the life cycle of Solution Dyeing: a new technique, called “spin dye” or our products: Our end products are of Saves both water and energy “solution dye” (see below: “Innovations high quality, durable and timeless styling There are two different ways that fibers and Resource Efficiency”) by which up to avoid unnecessary waste. Therefore are colored, and each method produces fibers with different characteristics and resource efficiency. One way to color fibers is to dip them in a solution of dye Waste Type Amount in kg (2012 data) Reuse/Recycle after they are executed. This method is Household-like 11 642 (21 364) 20 % compost; 80 % incineration great to achieve bright colors, but also uses additional water. The other way Paper 1 939 770 (1 338 253) 96 % to dye fibers is to directly incorporate Hazardous waste 9,8 (5) Incineration (special service) pigments into polyester chips before Plastics (var.) 25 082 (65 861) 70 % recycle; rest unknown the fibers are extruded. Not only does Metals 1 295 (438) 100 % reuse a solution-dyed yarn keep the sun from fading the fabrics almost immediately, Glas 10 96 % recycle but is also reduces the water consump- Organic 930 composting tion. For this solution dyeing process 10 CSR 2013 Fenix Outdoor AB (publ)
a colored yarn is produced that can be and traceability, compostable/bio degra- this product drew the attention to the woven and subsequently no additional dable product, high energy-efficiency, fact that its aluminum frame was respon- water consuming dyeing is necessary CO2 compensated, made in Scandinavia, sible for a significant proportion of the when the fabric is ready. made in Europe, product labels (like backpacks CO2 footprint. Ökotex 100, ISO 14000, blue-sign, Nordic The new wooden frame is made of Sustainability in focus for Innovation Swan, Bra miljöval, Ecolabel, FSC, Finnish birch that is FSC certified and For us, sustainability and innovation go KRAV, Energy Star). grown according to responsible foresting hand in hand. While Fjällräven has made methods. The frame is laminated layer sustainability a corner piece during re- upon layer with water-resistant, environ- MATERIALS search and development and integrated mentally-friendly glue and then treated it into the design guidelines, Brunton de- Our philosophy at Fenix is to improve with linseed oil. veloped a new product line with the aim the eco-profile of materials used for our to leave the basecamp better than we products. Recycled, organic, ecological, found it. Being outdoors and powering biodegradable or recyclable materials your electronics is possible with Brun- are not just lofty whishes. Our brands ton’s portable power solutions without and our employees are working to find leaving a trail of spent batteries behind. solutions that are less harmful to the Besides the solar solutions, Brunton’s environment and assure the high-quality new hydrogen reactor enables the use of of our products. power without exploiting fossil energy. The input materials as well as the It combines hydrogen and oxygen to chemicals that are needed to achieve the produce electricity on-the-move and functionality of our products are subject under any condition. The Hydrogen Core to a system of risk assessments before fuel is discharged with water. entering our production process. Primus has developed the eco-friendly Paper consumption constitutes a Eta stoves which have an efficiency rate relevant factor in the operations of our of 80 percent, which means they are company: catalogues, flyers, invoi- almost twice as fuel efficient as conven- ces, and packaging consumes serious tional outdoor stoves. This not only re- amounts of paper each year. We have duces the amount of CO2 emissions from therefore begun to reduce paper con- The carbon footprint of this new frame the stove but also emissions related to sumption by only issuing invoices elec- with a more environmentally friendly the production and transport of the fuel. tronically where possible and launching material choice is 90 percent lower than In parallel, Primus also invests resources a group-wide project on the reduction of its aluminum predecessor, which redu- in the development of more environment packaging and packaging waste in 2014. ces the overall footprint of the Kajka friendly fuels. Primus Powergas is one Around 231 tons of paper was used for backpack by ten percent. Great suc- such fuel and carbon dioxide neutral due flyers and catalogues in Europe. cesses are achieved by our employees: to carbon offset measures. we are on our way to becoming more sustainable. RE-THINKING MATERIAL CHOICE The apparel brands started a long-term RECYCLED MATERIALS project to achieve their goals for 2020. Mono-materiality functions as a design Using recycled materials as much as we guideline for Tierra and Fjällräven. A can is one major goal in reducing our toolbox for preferred materials revised environmental footprint. and updated every year accompanies Fjällräven and Tierra minimize the this guideline. Cooperation with the Sus- depletion of non-renewable resources tainable Apparel Coalition and the Higg through the use of recycled polyester. Index enables a re-thinking of material This is made possible by an up-cycling A Greener Choice for our clients choice. The Higg Index works as a self- process from PET bottles or old polyester Naturkompaniet and Partioaitta develo- assessment tool incorporating the MSI garments. Up-cycling is when a low value ped and established a label: “A Greener (Materials Sustainability Index) and the input is recycled into a high-value prod- Choice”. It is a tool to make it easy for RDM (Rapid Design Modul Beta). The uct. By investing in cradle-to-cradle pro- customers to buy greener products in knowledge added in this way enables us jects, when a garment can be recycled, or the shops. It is not a guarantee that to make better, more sustainable choices up-cycled Fjällräven and Tierra are taking a product is 100 % environmentally when thinking and designing new prod- a major step towards an environmentally friendly, but it is environmentally better ucts. conscious loop. In 2013 the share of recy- than the average within that product In this conscious thinking about our cled polyester was 14,5 % of all polyester type and range. A product needs to re- products, Fjällräven reintroduced the used. The Eco-Shell line is an example of ceive a minimum score in the following wooden frame in its Kajka backpacks how we want to produce shell garments categories in order to qualify: Organic as an environmentally friendly alterna- in the future: It was made completely out material, recycled material, avoidance tive to its aluminum frame. A calculation of recycled polyester and completely re- of toxic chemicals, closed-loop product made for the climate compensation for cyclable in the ECO Circle system. CSR 2013 Fenix Outdoor AB (publ) 11
Our site and location specific sustaina- – be the sum of all detection limits. We World Health Organization (WHO) and ble office supply program was launched believe that most of what we had seen the Food and Agriculture Organization of in 2012 and is now in operation. Exact after our process improvements can be the United Nations (FAO). During cattle figures cannot be given here since the ge- attributed to background contamination breeding, each animal is monitored from neral common sense has been that even only. However, since we cannot guaran- the day it is born. This is done by means without a program selective sustainable tee PFC-free garments due to possible of a yellow tag in their ear. Together with choices have been made. This project is background contamination or cross- our partner, the Viviani Tannery, we have of lower relevance compared to the core contamination stemming from factories, implemented and aligned this traceabil- business and work in progress. Possible stores, air pollution, water pollution and ity system. Hanwag, our traditional shoe highlights may be reported in following the environment, we changed the label manufacturer, sources its leather mostly reports only occasionally from time to from “PFC-free” to “fluorocarbon-free from European countries. 95% of leather time. impregnation”. We believe this is more used in Hanwag shoes comes from Euro- honest rather than stating something pean sources and tanneries. Additionally, virtually impossible. Hanwag exclusively works with selected FROM PFC-FREE TO PFC- tanneries to achieve high-quality leather PRODUCTION FREE LABELLING for the upper for their shoes. Hanwag Working actively with suppliers and has a range of special leather options – supply chain partners also entails from Yak to bio leather and TerraCare® Fluorocarbon-free exploring possible new and innova- impregnation zero™ leather. tive solutions and replacing cheap but All of the bio leather used in our shoes risky components with safer ones. This is supplied by the Viviani Tannery in Cro- particularly holds true when it comes to atia. This family-owned company buys chemicals. There are several ingredients LEATHER SOURCING AND TANNING its hides from approximately 50 certified we decided not to have in our products. Our apparel and footwear brands use organic agricultural farms. All certifica- Detoxing of our products is an ambitious leather. The Fenix policy targets environ- tion are given according to the EU eco- goal. It needs constant monitoring and mentally conscious sourcing and tanning standards. Certified organic means that transparency. We do not want PFCs of leather considering the welfare of the cows live outdoors all year round (per- and polyfluorinated chemicals) in animals and people in its Fenix Way and and that their feed is free from chemical our Fjällräven products. For the product Code of Conduct. additives and no concentrate feeds or line Eco-Shell small amounts of PFCs Our leather supply chains are con- growth hormones are used. This cattle were discovered during a Greenpeace stantly monitored by external veterinar- breeding makes sure that the leather Campaign in 2012. We reacted immedia- ians. A fruitful dialog with NGOs and is thicker and therefore, more robust. tely and went through the whole process local initiatives helps us to keep on our These shoes are lined in chrome-free again. training and education, auditing path to conscious sourcing and tan- tanned leather, which is also suitable and also testing and cross-testing was ning of leather. For example, Hanwag is for people who are allergic to ordinary done. the machines at the supplier were committed to ensure that the origins of tanned leather. cleaned and a concluding investigation their organic leather are transparent and Fjällräven and Tierra use spill and left- showed no critical PFCs remained in traceable. This is why all bio-leather is overs of raw material for their products the fabric and the garments. Test results certified with Hazard Analysis and Criti- containing leather. Waste leather from were close to or below the detection cal Control Points (HACCP). HACCP is a production is used for small applications level and we thus have taken a precau- standard to control products for or from like zip pullers, hang loops and other tionary approach, stating a contami- the food industry and to ensure traceabil- small parts of their high-quality prod- nation that would – in the worst case ity based on guidelines drawn up by the ucts. This leather is generally vegetable- tanned. If leather is not tanned chrome free, than we pay special attention to the chal- lenges associated with chrome-tanning especially within sourcing and the waste water management. We are constantly on the search for new innovative more environmentally friendly solutions. We asked one of Hanwag’s major suppliers, Heinen Leather Germany, about those challenges, potential for innovations and their industry solutions. Hanwag only sources TerraCare® leather from Heinen tannery. Hanwag works for over 50 years to- gether with Heinen on high-quality prod- ucts. This relation is based on mutual trust and a stable relationship which is well reflected in the products. 12 CSR 2013 Fenix Outdoor AB (publ)
Interview with Thomas Heinen, CEO, Josef Heinen GmbH & Co KG Mr. Heinen, with the images of cattle markets and tanneries in Bangladesh, consumers are especially interested in which country the animal skins used in their products come from. From where does your tannery buy its leather? Located in Germany, we’re lucky enough to have one of the world’s best bull hides on our doorstep. Logically, we buy our raw materials from local slaughterhouses here in Germany, who in turn buy the animal from local farmers. The bulls are raised and slaughtered for meat, so we add value to the meat industry’s by-product by turning perishable skins into beautiful leather. Leather tanning is one of the oldest hu- man technologies. Every tanning process has certain advantages and disadvan- tages. Which tanning process have you decided to use and why? have continuously reduced our CO2 emis- culation when raising the ph level. That sion and have just installed a new block way chrome falls out and can easily be Heinen tannery is tanning with chrome. heat power plant running on natural gas. separated from the water. In the end, the Today about 95% of the leathers world- chrome value in the waste water is below wide are tanned with chrome. Unfor- Water scarcity affects many regions of the 1ppm. tunately not all tanneries respect the world. The production of a pair of jeans environment and humans when it comes consumes an average of 11 000 L water Realistically looking at the future, what to chrome tanning. That’s why tanning for example. Against this background: will Heinen do to make tanning and leath- with chrome has a bad reputation. Fact How much water do you consume for the er processing more resource efficient? is however, if done correctly, chrome is processing of leather? the greenest and most advanced tan- This is my favorite part – dreaming of the ning technology today. Here at Heinen Water is the most important “chemi- perfect tannage. It is true: Today, there is we appreciate the many advantages of cal” in a tannery. The whole process in a no 100% green way to produce leather or chrome tanning: a great variety of colors, tannery is based on water. Unfortunately maybe even produce any product. How- technical features such as waterproofing, most tanneries are located in parts of ever, we understand that there is always larger skins compared to vegetable tanned the world that don’t have enough water something we can do to make things a bit leather, and increased durability. and especially not enough clean drinking better and from time to time, there comes water. We at Heinen monitor very closely a revolutionary idea that truly changes Resource depletion is a key issue of our the water consumption of each production how things are done. We are currently an time. Do you measure your CO2- footprint? step. For one square meter of leather we industry partner in a research program consume less than 100 L of water. That with Frauenhofer Institute developing Yes we do. Heinen tannery’s environ- is a very low amount since most tanneries a new tanning process that doesn’t use mental brand TerraCare® was the first consume 2 to 4 times as much. water. In this process, the tanning agent tannery in the world to be audited by the is pressed into the skin with CO2 in a high ECO2L standard. ECO2L stands for Energy In regards to the water cycle, how do you pressure environment. It is to early today Controlled Leather and measures the CO2 at Heinen handle adequate disposal of to get enthusiastic, but I can say we’re emission of a tannery – from beginning wastewater? Especially with the chrome close to developing something that could to end. It measures emissions from the tanning residues? change the way leather is made. delivery of raw materials to the clean- ing of waste water and other byproducts All water is chemically, mechanically at the end of the process. We have an and biologically cleaned and put back in Energy Management System in place and the natural water cycle at the end of the look very detailed into our energy con- leather production. We separate different sumption. Being located in Germany it is waste water streams for cleaning, one of necessary to work energy efficiently due which is the chrome stream. Chrome has to high energy prices. Over the years we the fantastic characteristic to show floc- CSR 2013 Fenix Outdoor AB (publ) 13
ANIMAL WELFARE 1. Wellbeing of geese when farmed from our stakeholders. To make sure 2. No live plucking that every step in our production chain Fenix Outdoor AB does not accept the 3. No force feeding is of the highest standard from an animal maltreatment of animals used in the pro- 4. Transportation welfare perspective, we want to establish duction of our products – this holds true 5. Loading and unloading the geese similar flows for other animal derived for the whole supply chain. In processes 6. Wellbeing and handling of geese at products (such as wool and leather). We where animals and their supplies are area before slaughtering also try to find sustainable alternatives used, they must be fed and treated with 7. Stunning through conducting risk assessments of dignity and respect and no animal must 8. Control of the process of finishing these products. deliberately be harmed nor exposed to the down To find out more about the Down unnecessary pain in its life span. Taking Flow step-by-step, go to our Website at the life of animals must at all times be Fjällräven’s audit team oversees the pro- www.fjallraven.se. conducted using the quickest and the cess by conducting audits regularly. We least painful and non-traumatic method visit the farms; we control how the birds BILOGICAL DIVERSITY available. are kept, what they are fed and how the fledglings hatch and how they are raised. We, as a company of outdoor brands Traceability: Sourcing of down The down’s quality and cleanliness are want to contribute to the protection of The Fjällräven down flow is controlled controlled by IDFL, the International the environment and the health of the from farm to ready-made product and Down and Feather Laboratory. Our down ecosystem. the control process is in place for more flow is also being regularly reviewed by Fenix has developed a company-wide than five years, constantly reviewed by a 3rd party veterinarian from Sweden biodiversity risk assessment tool to be an animal welfare expert from Sweden. that has accredited the Fjällräven down applied in standard operational proce- Fjällräven exclusively works with flow. In regards to logistics, the distances dures in strategic growth projects in the one down supplier who, in its turn for are kept to a minimum so that birds are near future. The status quo shows that the Fjällräven Down-Control Process never transported longer than necessary. most of our locations are within indus- works with selected farms and one The process, the partnership and the trial areas and inner cities and in 2013 no slaughterhouse. All Fjällräven goose approach chosen by Fjällräven is highly complaints or legal actions come to our down is purchased from this slaughter- appreciated by the Chinese Provincial attention with respect to the destruction house and represents a by-product of Government and hence became part of of habitats and biodiversity. the food industry. The down is pur- local/regional animal welfare regulation. In 2013 Fjällräven contributed around chased all year around to assure that Thus we act beyond our own down pro- 500 000 SEK to the project “Save the Arc- the down comes from the designated cess to “leave the base camp better than tic Fox” in order to increase biological source. we found it”. diversity. We also started to give a post- Every party involved in the supply Even if we are proud of what we graduate grant to a PhD student who chain has to sign and act in accordance achieved thus far, we know that we still furthers the research on how to save this with the standards set in the Fjällräven need improvement. We are always fur- precious animal in Sweden. Code of Conduct. Focus areas are: ther improving our processes by learning Down is one of the most efficient and effective natural insulation materials. Vulpes lagopus means ”the fox with the feet of a hare”. This precious animal is at the brink to The wellbeing of the birds are as important to us as the functionality of our extinction in Sweden. product. 14 CSR 2013 Fenix Outdoor AB (publ)
FACT SHEET IN A NUTSHELL: NATURE 2013 Indicator 2012 2013 (global) Fenix Outdoor Group Environmental Primary energy consumption 249 935 kWh 2 192 829 kWh Balance Sheet per Employee (coal, gas etc.) (based on two countries) (2012 figures in brackets) 899 766 MJ (calculated) 20 878 723 MJ Electricity 3 939 511 kWh 4 099 671 kWh 14 182 239 MJ (calculated) 14 757 773 MJ CO2e 1042,7 t CO2e 1314,2 t CO2e Total CO2 1,7 t* Green Energy (4,9 t) - green district heat 0 45 753 kWh - green electricity N/A 1 133 831 kWh Business Travel Air 2 849 682 km 4 009 821 km 262,8 t CO2e 365,9 t CO2e Car 2 520 000 km 1 406 090 km 541,8 t CO2e 197,7 t CO2e Total H2O 10,1 m3 Public Transport 186 920 km 349 832 km (7,6 m3) 15,1 t CO2e 19,7 t CO2e Material Use 2013 (all products) Material 2013 (in kg) Recycled/Organic 2012 (in kg) Polyamide 27 424 N/A 84 000 Total km Polyester 354 239 14,5 % recycled 306 000 7 527 Polypropylene 63 420 N/A 326 869 (7 351) Polybags 23 500 N/A 37 842 Vinylon 143 750 N/A 129 000 Polyurethane 32 468 N/A 3 294 Other Plastics 24 938 N/A 14 922 Cotton 170 267 13 % organic 27 800 Down 11 000 100% own control 8 500 Wool 13 737 7% recycled 5 593 Leather 181 400 Includes spill leather; 33% “TerraCare® zero” 2 900 Total kWh Gas 158 274 - 177 000 8 215 (6 019) Rubber** 143 667 N/A 3 865 Glue 4 800 - 3 900 Brass 59 819 80% recycled 61 665 Stainless Steel 102 168 40 % recycled 148 101 Steel 245 296 40 % recycled 358 314 Aluminum 37 239 50 % recycled 48 942 Zinc 0* 80% recycled 600 Copper 17 80% recycled 450 Total paper (kg) Titanium 237 N/A 328 1 669** Other metals 4 678 N/A 57 300 (1 670) Silicagel 16 550 - 13 000 * part of the brass content * based on travel and energy consumption ** includes soles (mix of rubber, polyurethane and ethylene vinyl acetate in varying quantities) ** estimation – data quality not sufficient CSR 2013 Fenix Outdoor AB (publ) 15
3. ECONOMY Fenix Outdoor is the umbrella of well-known brands within the Outdoor industry. The products sold under these brand names are developed to achieve and preserve superior quality light-weight outdoor products. Our products are sold via a selected re- door AB also expanded it retail segment per annum keeping a consistent profit tail network that focuses on profession- through the acquisition of Partioaitta Oy, before tax level of at least 10%. alism to provide a high level of customer a Finnish retailer for outdoor equipment. Fenix Outdoor Group will achieve its service to the end-users. The Fenix goal in two ways: Outdoor Group was established in 2002 • Through organic growth based on COMPANY PROFILE after the acquisitions of Tierra Products a strong retail network and brands AB, Primus AB and Naturkompaniet AB. Fenix Outdoor Group’s goals are to be- known for high quality products. In 2004 the German shoe producer Han- come a global leading player in outdoor • By expanding the Brands division wag was acquired. In 2009 a fifth brand, clothing and equipment business and to through acquisitions of additional out- Brunton, was added. In 2011 Fenix Out- achieve a minimum growth rate of 10% door brands. 16 CSR 2013 Fenix Outdoor AB (publ)
FJÄLLRÄVEN Fjällräven is a leading European brand in Outdoor clothing and equipment. TIERRA Tierra is well known as a strong brand in high-tech clothing for demanding outdoor activities. PRIMUS Primus develops and sells camping equipment used for boiling, heating and lighting powered by gas and liquid fuels. Fenix Outdoor AB has been listed on the Stockholm Stock exchange since 1983. HANWAG The majority owner of Fenix Outdoor Hanwag AB is the Swiss-based Nidron AG. Three is a traditional European brand for technically advanced trekking, outdoor, and alpine shoes. of the four board members are independ- ent of the company and its management group.1 BRUNTON The domicile of Fenix Outdoor is Örnsköldsvik, Sweden. Major operations Brunton is a US brand well known for innovations in are located in Sweden, Norway, Finland, compasses, optics, and portable power. Denmark, Germany, Austria, Italy, Swit- zerland, United Kingdom, Holland, China RETAIL and the USA. Our major markets corre- spond to the locations of the operations, Retail Our retail segment consists of two retail chains: showing the deep-rooted tradition of the Naturkompaniet AB, which consists of 31 out- brands and retailers. door stores in attractive locations in Sweden and Partioaitta Oy, located in Finland with 14 stores. Net Sales Per Major Market (including 2011, 2012, and 2013) MSEK 2013 2012 2011 Sweden 479,3 477,5 451,0 Other Nordic Countries 449,4 417,5 313,9 Germany 357,4 343,3 361,0 BeNeLux 123,7 103,6 113,5 Europe (other) 207,4 182,0 151,3 North America 162,0 137,0 106,3 Other Markets 57,7 39,7 34,9 TOTAL 1 836,9 1 700,7 1 531,9 HIGHLIGHTS OF 2013 This brief introduction into highlights (2012 figures as reference in brackets) of 2013 and the following summary on the financial figures should be read in Total income of 1865,8 (1 725,4) MSEK, an increase of 8% conjunction with the annual report 2013, Group operating profit of 259,5 (230,8) MSEK, an increase of 12% covering the reporting period 1st January 2013 through 31st December 2013 The income after financial items was 259,5 (226,0) MSEK, an increase of 15% Pension Plan Group net profit of 192,9 (155,0) MSEK, an increase of 24% The Fenix Outdoor Group is primarily Earnings per share 14,53 (11,67) SEK using defined contribution plans; benefit plans in the US are 401K plans. For more Investments in tangible and intangible assets was 62,8 (53,0) MSEK information, please refer to the annual report. 1 ll shareholders are invited to the annual General meeting of the listed parent company with A full right to address questions to the Board and the CEO. CSR 2013 Fenix Outdoor AB (publ) 17
FACT SHEET IN NUMBERS: ECONOMY 2013 SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2013 2012 SEK million 2013-12-31 2012-12-31 Net turnover, MSEK 1.836,9 1.700,7 ASSETS Operating profit, MSEK 259,5 230,8 Fixed assets Profit for the year, MSEK 192,9 155,0 Intangible assets 164,7 152,3 Earnings per share, SEK 14,53 11,67 Tangible assets 138,4 123,5 Capital expenditure, MSEK 62,8 53,0 Financial assets 13,4 21,1 Dividend per share, SEK 4,00* 4,00 Quotation Dec 31, SEK 285 177 Current assets Profit margin before tax % 14,1 13,3 Inventories 556,6 457,8 Return on equity % 20,8 19,3 Other receivables 294,4 243,3 Equity ratio % 77,3 74,8 Liquid funds 133,5 143,5 Average number of employees 766 696 Total assets 1.301,0 1.141,5 *Proposal of the Board EQUITY AND LIABILITIES Equity 1.005,3 850,3 Minority interests 9,9 7,5 CONSOLIDATED INCOME STATEMENT Provisions 24,5 26,8 Long-term liabilities - - SEK million 2013 2012 Current liabilities 261,3 256,9 Net sales 1.836,9 1.700,7 Total equity and liabilities 1.301,0 1.141,5 Other income 28,9 24,7 1.865,8 1.725,4 Goods for resale -831,9 -781,0 CONSOLIDATED STATEMENT OF CASH FLOWS Other external costs -411,7 -390,0 Personnel costs -315,4 -284,0 SEK million 2013 2012 Depreciations -38,9 -33,4 Cash flow from operating activities 235,6 167,8 Result from associated companies -0,6 0,5 Changes in working capital -141,0 -13,6 Other costs -7,8 -6,7 Cash flow from investing activities -54,8 -54,5 -1.606,3 -1.494,6 Cash flow from financing activities -51,4 -41,4 Net change in cash -11,6 58,1 Operating profit 259,5 230,8 Liquidity, beginning of period 143,5 85,6 Effect of exchange rate changes on cash 1,6 -0,2 Financial income 3,2 14,2 Liquidity, end of period 133,5 143,5 Financial expenses -3,2 -19,0 Income after financial items 259,5 226,0 Taxes -66,5 -71,0 Net income 192,9 155,0 18 CSR 2013 Fenix Outdoor AB (publ)
4. SOCIETY As a responsible company we take particularly interest in and respon- sibility for the societies in which we operate and for which we produce. Practicing good corporate citizenship and upholding the highest stan- dards of ethical integrity are very important for us. our worldwide suppliers. These Codes Our approach OUR BELIEF SYSTEM of Conducts were established by each Our approach to uphold social responsi- A major part of our corporate belief individual brand and were handed to bility is based on four pillars: system is reflected in our commitment the suppliers for subscription to assure 1. Belief and implementation of legal to the UN Global Compact and its ten that our values are implemented in our demands and international standards principles. They provide guidance when supply chains (See also Chapter 1). in direct and indirect contact with coping with human rights challenges in people our daily business conduct. We value CLOSE COLLABORATION WITH 2. monitoring of those standards ethical manufacturing practices and are 3. communication and collaboration committed to assuring that our business OUR PARTNERS with stakeholders partners share these values. Fenix Outdoor and its brands have tradi- 4. Responsibility for our products At the heart of this commitment tionally been interested in long-term re- 5. and caring about the society we oper- stands a Code of Conduct, which has lationships with our producers. We build ate in to be subscribed by our employees and a shared understanding for our quality CSR 2013 Fenix Outdoor AB (publ) 19
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