RAW RESPONSIBILITY G-STAR RAW SUSTAINABILITY REPORT 2020
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WHAT'S INSIDE? RAW RESPONSIBILITY 07 Transparency 07 Risk Assessment 08 In 2020... SUSTAINABILITY STRATEGY 10 Goals & Ambitions 11 Governance 12 Partnerships PEOPLE 14 Workers' Rights 16 Fair Wages 16 COVID-19 17 Reflection on 2020 PLANET 19 Circularity 20 Sustainable Materials 24 Climate Change 02 25 Pollution 28 Reflection on 2020 PHILANTHROPY G-Star RAW Sustainability Report 2020 31 Education 31 Entrepreneurship RISK ASSESSMENT 35 Annex: Risk Assessment 36 Methodology
HOW TO USE THIS REPORT This report reflects G-Star RAW’s performance G-Star RAW’s Policies: on key sustainability priorities and our • G-Star Supplier Code of Conduct implementation of due diligence within our - Social & Labour Guidelines value chain. Due diligence, as defined by the - Environmental Guidelines Organisation for Economic Cooperation and • G-Star RAW Materials Policy & Animal Development (OECD), is the process enterprises Welfare Policy should carry out to identify, prevent, mitigate • Modern Slavery Act and take accountability for actual and potential adverse impact in their value chain1. All downloads can be found here. G-Star’s sustainability priorities are linked to key Explore our RAW Responsibility webpage to find impact areas that were assessed and analyzed out more about up-to-date actions regarding our through a risk assessment that is aligned with the Sustainability Strategy. methodology of the OECD. The risk assessment is a key part of our due diligence process and guides us in forming and strengthening our Sustainability Strategy and priorities. Acronyms This report focusses on the sustainability progress ACT Action, Collaboration, made in 2020, the planned actions for 2021 and Transformation our long-term goals and ambitions for 2025 and 20302. In addition to this report, the following AGT Agreement on Sustainable documents, which outline G-Star’s policies, Garments and Textile guidelines and actions, are also part of our (reporting on) due diligence: Higg BRM Higg Brand & Retail Module Sustainable Supply Chain Handbook Higg FEM Higg Facility Environmental This Handbook explains our due diligence process Module that identifies (potential) risks and includes G-Star RAW’s Compliance Policy, a detailed supply chain Higg FSLM Higg Facility Social & Labor explanation, our sustainability monitoring tools and Module 03 process, our supplier onboarding process, and our Supplier Development Program. OECD Organisation for Economic Cooperation and Sustainability Milestones Overview Development This document shows our sustainability journey G-Star RAW Sustainability Report 2020 since 2006. SAC Sustainable Apparel Coalition Transparency Tools: SLCP Social & Labor Convergence • Manufacturing Map – This tool shows all direct Program suppliers with whom G-Star has a business relationship for over two years. ZDHC Zero Discharge of Hazardous • Fiber Ranking – This tool scales our fibers Chemicals from sustainable to not sustainable. 1 Definition of due diligence as defined in the OECD Due Diligence Guidance for Responsible Business Conduct. 2 Data disclosed in this report has not been verified by an external party, unless explicitly stated.
LETTER FROM THE CEO In a year that was heavily marked by COVID-19, the importance of sustainability has become even more evident. These unprecedented times make us extra aware of our responsibilities. We intentionally work with a small and durable supplier base, enabling us to establish long-term relationships. We are in close contact with all of our partners to try to limit disruptions in our supply chain wherever we can. Despite the challenging circumstances we continued to push for progress on key priorities such as the use of sustainable materials and implementing circular design solutions. We were able to reach and exceed our 2020 goals of using 90% sustainably sourced materials. We also set some new ambitious goals for 2025 and 2030 focusing on increasing our use of recycled and organic materials as well as on increasing our use of Cradle to Cradle Certified™ fabrics. Additionally, we worked on a few specific transparency projects such as the renewal of our RAW Responsibility website which recently launched, and a brand new sustainability communication tool. This tool, which will launch in 2021, will give consumers full insight into each fiber used in the main fabric of a G-Star garment. It will show how sustainable these fibers are, according to existing industry standards. Sustainability is an everlasting journey that requires constant innovation and collaboration throughout the entire industry. We look forward to further build on our journey this coming year. Rob Schilder 04 G-Star RAW Sustainability Report 2020
RAW RESPONSIBILITY About G-Star RAW About RAW Responsibility Founded in 1989, G-Star RAW’s passion Sustainability is key to how we operate at G-Star for denim has driven the brand to take RAW. It is a process of continuous improvement craftsmanship to the next level. “Hardcore in both the social and the environmental impact Denim” is the philosophy that pushes us to of our products. We have been embedding invent and explore – down to the smallest sustainability in the core of our business detail. With innovation and sustainability at our since 2006. Take a look at our Sustainability core, we are proud to present pioneering styles Milestones Overview to see some of the and challenge industry standards. highlights throughout that ongoing journey. We find it important to take our responsibility by constantly improving the impact we have on PEOPLE and PLANET, as well as give back to the communities in the countries where we produce. That is why we divide our efforts into three pillars: PEOPLE, PLANET and PHILANTHROPY. These three pillars represent the core of our Sustainability Strategy. PEOPLE PLANET PHILANTHROPY WORKERS’ FAIR WAGES CIRCULARITY SUSTAINABLE CLIMATE POLLUTION POSITIVE IMPACT RIGHTS MATERIALS CHANGE 06 TRANSPARENCY G-Star RAW Sustainability Report 2020 PEOPLE PLANET PHILANTHROPY It is our priority to achieve We minimize our impact on Through the GSRD Foundation fair, safe and healthy working the PLANET by selecting the we want to make a positive conditions, as well as protect the most sustainable materials and and lasting impact on the human rights of the PEOPLE work towards circular solutions, lives of people in countries involved in our supply chain. while operating and producing where G-Star RAW produces. responsibly. Together with our partners we provide education and stimulate entrepreneurship through PHILANTHROPIC efforts, including training and coaching.
TRANSPARENCY To deliver on our strategy, we enable external stakeholders to hold us accountable when it Manufacturing Map comes to assessing our data-backed sustainability Providing oversight of the supply chain performance. This includes transparent reporting. is part of our commitment to the apparel sector’s Transparency Pledge. Six years ago, Our first sustainability scorecard was developed we made our Manufacturing Map public – so with MADE-BY in 2013, and we progressed to anyone can trace the origin of a G-Star RAW a MODE tracker disclosure in 2015 until 2017. product, now covering approximately 95% Since 2018 we have reported using the Higg of our production volume (this differs per Brand and Retail ‘Beta’ Module (BRM) from the season). In addition to the map, we publish Sustainable Apparel Coalition (SAC). This is a global further details on our direct suppliers, their sustainability measurement performance tool in the sub-factories, processing facilities and apparel and footwear sector. From 2020 onwards, nominated fabric mills in our Manufacturing we use the Higg BRM to track, measure and share List, which is available on the Open Apparel the social and environmental impact of our value Registry, an open source tool, which maps chain. In 2021, the Higg BRM will also be verified by garment factories worldwide. an approved third party. Fiber Ranking In 2020, we produced our 2019 Sustainability Report The G-Star RAW Fiber Ranking that met the reporting requirements of the Dutch communication tool gives consumers full Agreement on a Sustainable Garments and Textiles insight into each fiber used in the main fabric (AGT), of which we are a signatory, and followed of a G-Star garment. It shows exactly how the OECD Due Diligence Guidance for Responsible sustainable these fibers are, according to Supply Chains in the Garment and Footwear Sector. existing industry standards. By doing so, we This report was a first step to integrate the OECD allow consumers to decide for themselves Due Diligence Guidance and its risk assessment whether a specific garment matches their methodology in our sustainability communication. individual sustainability standards. Risk Assessment More information regarding the Fiber Over the past year, we have reevaluated our Ranking can be found in the chapter Sustainability Strategy and built upon the PLANET. 07 OECD risk assessment that was included in the Sustainability Report of 2019. We did this with the help of industry partners, stakeholders and external resources. We performed our social and environmental risk assessment based on the risk G-Star RAW Sustainability Report 2020 categories identified by the OECD and focused on G-Star’s main four production countries: Bangladesh, China, India and Vietnam. Our risk assessment identifies both the likelihood and the severity of potential or actual risks within our value chain. Based on all the information we collected through different resources, we determined which risks are most salient in our supply chain. This led to an updated strategic framework that focuses on the prioritized topics in our supply chain. Our complete risk assessment can be found in the Risk Assessment Annex.
IN 2020... COVID-19 …we achieved a Gold Level The COVID-19 pandemic is having an unprecedented impact on our health and Cradle to Cradle economy worldwide. Throughout this pandemic, we are aware of our responsibilities. certification Ever since we integrated sustainability into the heart of our business in 2006, we intentionally work with a small and longstanding supplier for denim products and for our base, enabling us to establish long-term Relz Black denim fabric relationships. We are in daily contact with all of our partners in order to limit disruptions in our supply chain wherever we can. …the Higg FSLM self-assessment …we supported supply chain dialogue through While we constantly work on minimizing was completed by financial, social and environmental impact, Tier 1 suppliers that represent ACT we realize that these uncertain times have 40% participation affected and will continue to affect businesses in two and communities involved. We focus on G-Star RAW finding collaborative solutions in which we of our production production countries can carry the burden of this crisis together volume and hopefully secure the future of all our businesses. We engage in ongoing social dialogues with partners and stakeholders …we developed the such as ACT to align on these collaborative Fiber Ranking solutions. In our COVID-19 supply chain responsibility communication tool statement we further explain our purchasing practices during this pandemic. 08 …we used …we used …we defined our new 99% 93% Sustainability Strategy G-Star RAW Sustainability Report 2020 sustainably sustainably sourced sourced cotton materials with goals towards 2025 and 2030 …our DETOX program …the Higg verified FEM assessment was covered 75% of our …we published our completed by Tier 1 and 2 suppliers that COVID-19 annual production represents 66% of our production volume and volume, and we saw they scored an average of 67.7/100 statement about our supply chain 90.4% compliance
G-Star RAW Sustainability Report 2020 09 SUSTAINABILITY STRATEGY
SUSTAINABILITY STRATEGY Our long-term focus towards RAW Responsibility collection. Working with different industry partners includes key sustainability priorities specified and tools such as the Higg Index of the SAC and in goals for 2025 and long-term ambitions for the programs of Zero Discharge of Hazardous 2030. These are commitments built on many Chemicals (ZDHC) with our suppliers has ensured foundations, such as our risk assessments covering that we can measure and track impact, and scale the different phases of our value chain and the across our value chain. This Sustainability Report increased use of sustainable materials in our reflects our annual progress and achievements. Goals & Ambitions People Priority Goal 2025 Workers’ Rights Elevate and improve fair, safe and healthy working conditions in G-Star RAW supply chain. Improve current complaint systems towards global independency and confidentiality to strengthen workers’ voices in G-Star RAW Fair Wages Collaborate industry wide through “ACT on supply chain. living wages”, to define the roadmap towards a fair wage framework. Work towards an industry wide agreement on regional living wages and support Train responsible G-Star teams and suppliers implementation in G-Star RAW production on: timely planning & forecasting, defining labor countries. costing within purchasing prices and discussing fair terms of payment. Planet Priority Goal 2025 / 2030 Circularity Increase the use of Cradle to Cradle Certified™ fabrics in G-Star RAW collection. In 2025, 20% of our collection is made with Cradle to Cradle Certified™ fabrics. Sustainable Define roadmap to achieve sustainable In 2025, 75% of our collection will be made materials goals. of recycled and/or organic/bio-based/ Materials compostable materials. In 2030, 100% of our collection will be made 10 of recycled and/or organic/bio-based/ compostable materials. Climate Change Define roadmap to achieve climate goals. Reduce 15% of GHG emissions by 2025. Reduce 30% of GHG emissions by 2030. Pollution Ensure the ban of hazardous chemicals in Phase out all unsustainable chemical G-Star RAW supply chain. applications in G-Star RAW products in 2030. G-Star RAW Sustainability Report 2020 Transparency Priority Goal 2030 Report on our sustainability performance Offer full transparency through on-product through a verified industry benchmark (Higg sustainability ranking, including environmental Brand & Retail Module). & social performance. Offer full transparency about the environmental performance of our materials for all garments through our fiber ranking.
SUSTAINABILITY STRATEGY CONTINUED Governance Policies Our Sustainability Department implements the At the base of our Sustainability Strategy Sustainability Strategy within and beyond our we have multiple policy documents to own operations. The team specializes in social and uphold our RAW Responsibility. We environmental sustainability across the supply developed the G-Star RAW Supplier Code chain and has a presence across the Netherlands of Conduct representing all standards on and in Asia. It is their responsibility to define Social and Environmental and Safety and and implement the Sustainability Strategy by Health (S&ESH) regulations, to ensure that integrating the sustainability work throughout our G-Star products are made under fair and own organization. safe circumstances. Additional to our Code of Conduct, we also have Social & Labour The departments that help manifest our Guidelines and Environmental Guidelines. Sustainability Strategy include Design, Product An overview of all policy document can be Development, Merchandise, Purchasing & Pricing, found here. Quality Assurance, Sourcing, Logistics, Marketing, and Communications. Our overall Sustainability We continuously monitor and collaborate Strategy is translated into team- and individual with our suppliers and external industry goals across these departments, ensuring joint experts, to uphold these standards and efforts on achieving our goals. Below image improve where needed. How we do that is demonstrates how we deliver on our Sustainability explained in our Sustainable Supply Chain Strategy together. Handbook. Governance overview Sustainability Department defines and implements our 11 Sustainability Strategy Design Transparency support Marketing are committed Poduct Development to goals Sustainable Materials Communication G-Star RAW Sustainability Report 2020 related to Merchandise Circularity Logistics contribute to Climate Change achieving goals related to uses the Higg Retail Index tools Sourcing to analyse Pollution supplier performance on collaborate Workers’ Rights Purchasing & Pricing closely on Fair Wages Quality Assurance are contributing to
PARTNERSHIPS G-Star RAW collaborates with many partners The overview below shows how these partners and stakeholders to work on our Sustainability and stakeholders are involved on a strategic Strategy and help define our goals. level. Partnerships overview Organisation for Economic Cooperation and Development is based on Agreement on Sustainable Garments & Textile is a signatory of works on Better Cotton Initiative Sustainable Materials with Textile Exchange works on ACT Fair Wages with works on Cradle to Cradle Circularity Products innovation Institute Social & Labor with works on G-Star RAW Convergence Program Workers’ Rights works on with Climate UN Fashion Charter Change ACCORD with 12 Zero Discharge of Hazardous Chemicals works on Pollution with Plastic Soup Foundation monitors and reports with the help of G-Star RAW Sustainability Report 2020 Sustainable Apparel Coalition Higg Index Tools
G-Star RAW Sustainability Report 2020 13 PEOPLE
PEOPLE When it comes to the PEOPLE in our supply Social framework for supplier development chain, our key focus is on achieving fair, safe and Our social framework includes supplier healthy working conditions, as well as protecting development tools to support direct suppliers human rights. We engage in key industry consistently to apply high labor standards, based partnerships and make use of tools such as the on our Supplier Code of Conduct. This framework Higg Index Facility Social & Labor Module (Higg consists of supplier trainings, the use of the Social FSLM) to monitor working conditions. We have and Labor Convergence Program (SLCP), the a clear understanding of the social risks in our Higg FSLM, and the development of a complaint supply chain and in 2020 we updated our risk system. assessment following the guidance of OECD3. Within our supply chain we focus on our Workers’ Social and Labor Convergence Program (SLCP) Rights and Fair Wages programs. G-Star RAW has been a signatory of SLCP since 2016. The mission of this project is to develop a Workers’ Rights common assessment framework – the Converged To improve fair, safe and healthy working Assessment Framework (CAF) – to measure conditions in our supply chain, we work closely continuous improvement in working conditions with our suppliers and have built trustworthy and and therefore increase the opportunity for long-term relationships with them. We deliberately transparency. According to SLCP, almost two work with a small and durable supply chain to thirds of social audits in the apparel sector are ensure continuity in our sustainable initiatives. Our duplicates. By working together and sharing data, Manufacturing Map shows the suppliers we work we can accelerate positive change in workers’ with for over two years and offers background rights. In 2019, the SLCP relaunched and scaled information for each of them. the CAF to be rolled-out in 12 countries. Although human rights are protected by various G-Star also started to implement the CAF into national and international laws, they can be our supply chain in 2019 starting in China and restricted in certain situations. We strive for all India. This replaced our own internal assessment workers across our supply chain to have these as well as our request for other third-party audit rights respected. The United Nations Universal standards. Meanwhile the list of SLCP-operational Declaration of Human Rights sets out these rights countries is growing and a total of 1000 as a common standard of achievements for all completed assessments was reached in August 14 peoples and all nations. We used these and other 2020. related resources as the basis for our Supplier Code of Conduct and our practices. G-Star RAW Sustainability Report 2020 3 The OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector has helped us to conduct an in-depth risk assessment to address and prioritize the social and environmental risks in our supply chain. Based on this prioritization we are focusing on our selected program topics. Check the Risk Assessment Annex for more information.
PEOPLE CONTINUED Higg Facility Social & Labor Module (FSLM) We apply the Higg FSLM – the content of which In the Higg FSLM the following topics are is directly informed by the work of SLCP – as a assessed: measuring and performance improvement tool • Recruitment and Hiring for our supply chain partners. This information is • Working Hours collected with a self-assessed methodology and • Wages and Benefits verified through an accredited third party. In our • Employee Treatment Sustainable Supply Chain Handbook we explain • Employee Involvement how the information from the Higg FSLM is • Health & Safety analyzed and used to monitor our suppliers. • Termination • Managements Systems In 2019, we started with the implementation of • Empowering People and Communities the Higg FSLM in our supply chain. We focused on the Higg FSLM self-assessment and requested suppliers to complete the module to better Social Dialogue & Factory Complaints System understand the system. At the end of the year, In 2019 and 2020 we focused on training our almost 70% of our Tier 1 Cut-Make-Trim suppliers suppliers about the concept of a social dialogue completed the Higg FSLM self-assessment. and how this could benefit them. During these trainings we also informed and gave guidance Next, we set targets to measure the on key improvement points for their workers’ implementation and promote the use of the committee and factory complaint system, aiming Higg FSLM. To be able to continuously measure to increase functionality and effectiveness. comparable data, we decided to change the Next, we will participate in a cooperation program way we look at the Higg FSLM adoption of our on industry level that provides an independent suppliers and align the methodology with our complaint system in one of our key production Higg FEM performance measurement. Instead of countries. The goal of this program is to enhance measuring the amount of suppliers who adopted access to remedy for garment workers and to the Higg FSLM, we now measure the adoption collaboratively work on and learn about the performance based on production volume. remediation processes. In 2020, the Higg FSLM self-assessment was completed by Tier 1 suppliers that represent 40% AGT Complaints and Disputes Committee 15 of our production volume. Suppliers who also As part of our signatory to the AGT, we proceeded with verification represent around 27% participate in an independent Complaints and of our production volume. Disputes Committee that allows for organizations and individuals to submit complaints or disputes. This year, we plan to further engage our suppliers, The AGT then tries to mitigate the problem with G-Star RAW Sustainability Report 2020 through various communication channels such as the help of its signatories (you can find more annual supplier sustainability webinars, to increase information here). the use of the Higg FSLM. This means we can work towards comparable data sets throughout our supply chain as well as reducing audit fatigue. We aim to adopt the Higg FSLM self-assessment at Tier 1 suppliers that represent 80% of G-Star RAW production volume and the Higg verified FSLM at Tier 1 suppliers that represent 40% of G-Star RAW production volume by the end of 2021. Next year we will also start publishing our average supplier’s scores per Higg FSLM topic (as mentioned above) to show in-depth progress.
PEOPLE CONTINUED Fair Wages The purpose of these surveys is to analyze our Based on our risk assessment, one of the purchasing practices from our own perspective most important steps to improve fair working as well as from our suppliers’ perspectives. conditions is through Fair Wages. Although a Questions in this survey are related to key topics minimum wage is the lowest wage permitted such as sourcing practices, forecasting and by law in any given country, this doesn’t always capacity planning, price negotiation, changes to suffice for a normal standard of living. That is why order, re-orders and sampling. We will organize we joined ACT on Living Wages in 2019. training sessions for our internal teams based on any identified knowledge gaps in key purchasing ACT on Living Wages practices topics. ACT is a ground-breaking agreement between 22 global brands and retailers and the IndustriALL COVID-19 Global Union, a global trade union fighting for The impact of COVID-19 unprecedentedly better working conditions and trade union rights disrupted supply chains all over the world, around the world. It aims to achieve a living including ours. During the pandemic we focused wage for all textile workers through collective our supply chain work on finding collaborative bargaining at an industry level. By joining, we solutions and maintaining a continued dialogue have committed to purchasing practices with our with our suppliers. Our work in 2020 shifted to suppliers that will ensure fair terms of payment, key impacted risks areas due to the disruption. We full coverage of wage increases, better forecasting requested our suppliers to update us monthly on and planning, training and responsible exit the payment of employee wages, their employee strategies. With sector common indicators, the turnover (including lay-offs) and health & safety ACT accountability and monitoring framework protocols. We provided training materials focused will help us measure progress towards more equal on safety measures for workers, based on the supplier partnerships. World Health Organization guidelines. Purchasing practices The ongoing impact of COVID-19 stressed the Purchasing practices are an important part of necessity for social dialogue in supply chains. This interaction between brands and their suppliers. is also a key element of our Global Purchasing The way that we buy from and work with our Practices Commitment to ACT. The ACT dialogue suppliers can have an impact on the working platforms that have been built in regard to 16 conditions at their factories. Therefore, we work this commitment served as a foundation of on improving our purchasing practices through communication during this crisis. As a result of improving our planning and forecasting as much the dialogue between suppliers, trade unions as possible with the help of ACT. and ACT brands, G-Star RAW committed to communicating any possible projections on the G-Star RAW Sustainability Report 2020 In 2021 we will roll out the ACT Purchasing overall business and stock situation as well as Practices Self-Assessment (PPSA) Survey within taking responsibility in cases in which a supplier our company as well as the Purchasing Practices has incurred a fabric liability as a direct result of Assessment (PPA) Survey for our suppliers. order amendments.
REFLECTION ON 2020 Strategic Topic 2019 Achievements 2020 Highlights & Progress 2021 Actions & Goals Workers’ Rights Almost 70% of tier 1 cut-make- trim factories completed the The Higg FSLM self- assessment was completed by Adopt Higg FSLM at Tier 1 suppliers that represent 80% Higg Facility Social & Labor Tier 1 suppliers that represent of G-Star RAW production Module (Higg FSLM) self- 40% of our production volume. assessment. volume. Suppliers who also proceeded with verification Adopt Higg verified Higg 18 direct suppliers were represent around 27% of our FSLM at Tier 1 suppliers that trained in social dialogue, production volume represent 40% of G-Star RAW grievances and worker production volume. committees. Continued our training program (on social dialogue, Train & engage suppliers Conducted country-level grievances and worker on G-Star RAW social assessments to understand committees) which launched requirements. specific risk exposures. in 2019 at our suppliers in Vietnam and Mauritius Set up an independent (pre-COVID). complaint system in Tier 1 factories in India. Industry engagement on complaint handling at suppliers. Built upon the country-level risk assessments to include supply chain specific risk exposures. Fair Wages Joined ACT to support living wages through collective Product Development team members attended living Start with implementing a tool to monitor wage gap data of bargaining. wage training of AGT. our Tier 1 suppliers. Utilized Better Buying Supply chain social dialogue Roll out ACT Purchasing initiative research to improve through ACT participation Practices Self-Assessment our purchasing practices. in G-Star RAW production (PPSA) survey within countries (Bangladesh and company and Purchasing Turkey). Practices Assessment (PPA) survey for suppliers. Incorporated Responsible Exit strategy as part of Train internal teams on key ACT Purchasing Practices purchasing practices topics Commitments. (including knowledge gaps 17 identified from surveys). COVID-19 Published our COVID-19 Supply Chain Responsibility statement to explain our purchasing practices during the pandemic. G-Star RAW Sustainability Report 2020
G-Star RAW Sustainability Report 2020 18 PLANET
PLANET G-Star RAW takes responsibility for any potential Clean chemistry environmental impact on our PLANET across all Over the past years we have collaborated with stages of our value chain. We consider everything many partners to innovate new technologies for from the choice of raw materials and fibers to sustainable (indigo) dyeing. Read more about responsible fabric and garment production and them here. By increasing our use of Cradle to logistics, from our own operations, all the way Cradle Certified™ fabrics, as well as specific through to consumer care and end-of-life of sustainable dyes, such as Archroma’s EarthColours the product. We have a clear understanding of and Recycrom™, we continue to increase our use the environmental risks and run programs on of clean chemistry. Circularity, Sustainable Materials, Climate Change and Pollution. Packaging Packaging is an inevitable and important part Circularity of shipping products from one place to another If we want to be here as a denim brand in the without damaging them. However, packaging future, we need to design in “closed loops” today. often requires plastics. In 2019, G-Star looked By this, we mean using only sustainable materials, into the opportunities to reduce the amount of clean chemistry and ensuring that garments are (virgin) plastics in our packaging from business to designed for reuse. business, as well as from business to consumer. In 2020, we started testing if we could swap virgin Sustainable materials: Cradle to Cradle plastic polybags with polybags made from 100% Certified™ innovations recycled post-consumer polyethylene (PE). The Cradle to Cradle Products Innovation Institute helps us to design in closed loops. Their In 2021, we will scale the use of 100% recycled certification process is the only in the world de- PE polybags. We expect that by the end of 2021 signed for a circular product economy. It is the 90% to 95% of our garments will be packed with most rigorous because it requires unparalleled these recycled polybags. We are also currently levels of transparency across the supply chain. investigating unpacking our products before Read more about our Cradle to Cradle Certified™ we send them to our consumers, to ensure journey here. responsible plastic recycling. We would then replace the plastic packaging from warehouse to In 2018 we presented the world’s first Cradle to customer with paper-based bags. 19 Cradle Gold Certified™ denim fabric. Next, we launched a product range where the certification Wear and Care responsibility went beyond the fabric. Here, the full product, Sustainability starts with the fabrics we choose including buttons, yarn, dyes and labels was to minimize our impact. It continues all the Cradle to Cradle Gold Certified™. This resulted in a way through manufacturing and transportation G-Star RAW Sustainability Report 2020 100% recyclable product. to our stores, but it does not stop there. The environmental impact of our products continues By constantly expanding on these innovations, throughout the entire lifecycle of a garment. we are further increasing the use of these circular Besides informing our consumers on how to wear fabrics throughout our collection. Right now, 5.2% and care for their G-Star garments responsibly, of our products is made with Cradle to Cradle accelerating post-consumer circular solutions is a Certified™ fabrics. In 2025, we aim to include key priority for G-Star. Cradle to Cradle Certified™ fabrics in 20% of our collections. While scaling and accelerating In 2018 we tested a product takeback service in the implementation of these fabrics, we replace our mono-brand stores in The Netherlands and existing fabrics with Cradle to Cradle Certified™ Belgium. The concept focused on giving old fabrics. This means that we can only achieve this G-Star RAW jeans a second life. We are aiming to goal by actively involving our suppliers. re-initiate this initiative in 2021. Currently, we are
PLANET CONTINUED looking into several options to give the collected Beyond cotton jeans a new life by exploring a Denim-to-Denim The remaining 20% of our raw materials includes upcycling program, as well as finding other 50% polyester and 50% other materials. We are now appropriate recycling solutions. using 93% sustainable materials. Some examples of the non-cotton sustainable materials we use include Lycra®T400® EcoMade, Roica(TM) V550, Sustainable Materials Lenzing® EcoVero Viscose, Lycra® 166L, recycled We are committed to ensuring that all raw elastane, recycled polyester and TENCEL™ branded materials used in our products are grown and Lyocell fibers. We continue to investigate sustainable manufactured in a responsible way that preserves alternatives for the remaining 7% of our materials. resources and respects human and animal rights. Animal Welfare Cotton Being a denim brand, the majority of our products Since we are a denim brand, about 80% of all is made from cotton or includes cotton. About 1 to the raw materials we use consists of cotton, a 2% of our products is made from animal fibers such crop that has historically been associated with as wool or leather. To ensure that these fibers come high water and pesticide use. Today, 99% of from safe and ethical circumstances, we have an the cotton we use is sustainably sourced. Right Animal Welfare policy. now, our sustainable cotton is either organic or sourced through Better Cotton Initiative (BCI). Our goal for 2025 is that 75% of our collection will BCI exists to make global cotton production be made with materials that are recycled and/or better for the people who produce it, better for organic/bio-based/compostable. This means that the environment it grows in and better for the – considering wool – we will increase the use of sector’s future. Our Materials journey and how recycled wool and potentially organic wool. When we have achieved our goals in the past and will it comes to virgin wool, we are currently aiming achieve in the future, is explained in the case for RWS-certified wool on yarn level. However, we study Sustainable Materials goals. want to raise the bar and only source organic and/ or RWS-certified wool on yarn level by 2025. At this moment almost 80% of our cotton is sourced from BCI and around 20% is organic Considering leather, G-Star aims to use more cotton. Although we believe this is a great recycled leather and/or organic types of leather 20 first step towards more sustainable cotton (plant-based alternatives). When using virgin production, we are aiming for 75% of our leather, we only source from members of the collection to be made from materials that are Leather Working Group (LWG). Also the tanneries either recycled, organic, bio-based and/or we source from are LWG-certified, which reduces compostable by 2025. the negative impact on the environment. G-Star RAW Sustainability Report 2020
PLANET CONTINUED CASE STUDY SUSTAINABLE MATERIALS GOALS By the end of 2020, 93% of all materials used G-Star’s Sustainable Materials journey started for our main fabric were responsibly sourced4. back in 2010 when we launched the first Raw This includes BCI cotton and organic cotton, Sustainable capsule to experiment with and but also other kind of sustainable materials boost the use of sustainable materials. In this such as recycled polyester, Tencel® Lyocell and capsule, we presented garments made from sustainable types of elastanes. organic cotton, recycled cotton and fibers of As cotton is the material we use the most, nettle plant. In 2011 we started to implement we particularly focused on increasing the the use of sustainable materials in our general use of more sustainable cotton over the collections which led to an increase in sustainable past years. While in 2015 we only used 9% of fiber usage from 1% to 10% within one year. We organic cotton, today 20% of the cotton we have increased the use of sustainable fibers use is organic. Right now, 79% of our cotton continuously since then. is sourced from BCI. The remaining 1% is conventional cotton. The following figures show how much sustainable cotton, polyester, 4 Data displayed was not verified by an external party. elastane and viscose we use. Sustainable Materials journey 93% 86% 10% 8% 74% 18% 4% 13% 10% 58% 1% 11% 21 30% 65% 65% 1% 60% 5% 46% 19% G-Star RAW Sustainability Report 2020 14% 14% 1% 10% 24% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 A Ranking - Recycled or mostly recycled fibers B Ranking - Organic, bio-based or compostable fibers C Ranking - Better than conventional fibers “Our Product Development Team has the responsibility to choose materials that are safe for PEOPLE and PLANET. We are proud of our teamwork with our supply chain partners in reaching our 2020 Sustainable Material goals and are excited to work together on reaching new goals.” Head of Product Development
PLANET CONTINUED Materials used for G-Star RAW Products Recycled Polyester Organic BCI Cotton Better Cotton (BCI) Organic Cotton Recycled Polyester Lyocell (Tencel™) / LENZING™ ECOVERO™ Roica™ / Lycra T400 Ecomade Conventional Elastane Conventional Polyester Conventional Viscose Conventional Cotton Other Breakdown of sustainable materials Conventional Recycled Organic Polyester BCI Conventional Polyester 22 G-Star RAW Sustainability Report 2020 Roica™/ Lycra T400 Lyocell (Tencel™) EcoMade Lycra® 166L LENZING™ Conventional ECOVERO™ Elastane Conventional Viscose Even though 93% of the materials we use are organic, bio-based or compostable materials sustainably sourced, we aim to increase the and by 2030 this will apply for our full collection. sustainability level of the materials we use even These goals are closely linked to our Fiber further. Therefore, in 2025 75% of our collection Ranking which will help to track and display our will be made from recycled materials and/or progress.
PLANET CONTINUED CASE STUDY Fiber Ranking Index (Higg MSI), the rigorous standards of the To guide us in our sustainable materials journey Cradle to Cradle Products Innovation Institute, we use a Fiber Ranking that lists all the fibers we CanopyStyle’s annual Hot Button Ranking and the use and indicates how sustainable these fibers Preferred Material Benchmark by Textile Exchange. are, according to existing industry standards. In The outcome is a living tool, which we will continue order to rank the fibers, we first categorized all to update according to adapted standards and fibers we use, as well as the ones we specifically industry debates. choose not to use. The categorization is fully determined by the environmental impact of each Right now, we are working on translating this Fiber fiber. To guarantee the most objective and up- Ranking into a brand new transparency feature to-date ranking tool, the categorization of the that will live on G-Star.com. This sustainability fibers is completely based on existing industry communication tool, that will go live within the tools and scoring mechanisms. We included the next few months, will give full insight into each classification of the Higg Materials Sustainability fiber used in the main fabric of a G-Star garment. Scaling our fibers from sustainable to not sustainable B D E sustainable not sustainable RECYCLED OR ORGANIC, BIO- BETTER THAN CONVENTIONAL DO NOT USE MOSTLY RECYCLED BASED OR CONVENTIONAL FIBERS FIBERS COMPOSTABLE FIBERS FIBERS Natural Natural Natural Natural Natural Recycled cotton Organic cotton BCI cotton Conventional cotton Unethical cotton Hemp Linen Synthetic Synthetic Synthetic Synthetic Recycled polyester ROICA™ V550 Lycra® T400® Virgin Polyester Recycled nylon Lycra® 166L EcoMade Virgin Nylon 23 ROICA™ EF (Eco (Polyamide) Smart) Acrylic Conventional Elastane (elastomuliester) Lycra® G-Star RAW Sustainability Report 2020 Manmade Manmade Manmade TENCEL™ x REFIBRA™ Lenzing® EcoVero Conventional Lyocell Lyocell Tencel® Lyocell Conventional Tencel® Modal Viscose/Rayon Animal Animal Animal Recycled Wool Conventional Wool Fur Conventional Leather Leather from real Conventional Alpaca exotic animals Down Angora Mohair
PLANET CONTINUED Climate Change The past two years, we have carefully analyzed We focus our climate impact work on our supply energy consumption levels of our own operations chain and consumer engagement, while also taking (including offices, stores, distribution centers and steps in our own offices and stores. car fleet). In collaboration with RESET Carbon Limited we analyzed the Scope 1 and 2 carbon UN Charter for Climate Impact inventory based on 2016-2018 data. We now know In December 2018, a group of leading fashion the carbon hotspots of our own organization and brands and NGOs launched the Fashion Industry where to focus our actions. Emissions are broken Charter for Climate Action. The Charter’s down into three categories; Scope 1, Scope 2 and commitments include a reduction in greenhouse Scope 3, as can be seen in the figure below5. gas emissions of 30% by 2030, public reporting of emissions, and development of a common Scope 1 emissions are directly emitted from messaging strategy to communicate the our owned and controlled operations. Scope 2 importance of climate action within the industry. emissions are coming from the generation of In July 2019, G-Star RAW signed the UN Charter electricity and heat and steam purchased by us. and publicly committed to addressing the topic of Scope 3 includes all our indirect emissions from our climate change. Read more about the start of this value chain activities. journey here. 5 The definitions of these scopes are retrieved from the Climate Action Playbook that explains the commitment from the Fashion Industry Charter for Climate Change. Illustration is based on the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard GREENHOUSE GASES 24 SCOPE 2 SCOPE 1 INDIRECT DIRECT purchased electricity, steam, heating & SCOPE 3 SCOPE 3 G-Star RAW Sustainability Report 2020 cooling INDIRECT INDIRECT for own purchased use transportation goods and and services distribution leased assets company investments capital facilities goods processing employee of sold commuting products franchises fuel and company energy related business vehicles activities travel use of sold leased assets products end-of-life transportation waste treatment of and generated in sold products distribution operations UPSTREAM ACTIVITIES REPORTING COMPANY DOWNSTREAM ACTIVITIES
PLANET CONTINUED Breakdown of total emissions Breakdown of total Scope 1 and 2 emissions from 2016 - 2018 by scope from 2016 - 2018 by source 2% 3% 0% 5% 8% Purchased electricity 16843 Natural gas Mobile fuel combustion Scope 1 Purchased heating Scope 2 Purchased cooling LPG 2445 82% inventory that allows to set a baseline. As most The key-highlights of our Scope 1 and 2 of our emissions are coming from Scope 3, we carbon footprint: expect to make the biggest impact there. Once we • Electricity consumption makes up 80% of have our footprint baseline for Scope 3, we aim to G-Star’s total scope 1 and 2 emissions set science-based targets for all three scopes by • Almost half of our global emissions comes 2022. This will prepare us to steer our full carbon- from our HQ offices and warehouses, reduction program towards a 30% reduction by based in the Netherlands 2030. • Our stores have the highest electricity intensity Pollution Minimizing pollution and the environmental impact of hazardous chemicals have been a major priority 25 Based on this analysis G-Star RAW knows that for us since signing the DETOX Commitment with we should prioritize efforts primarily on the Greenpeace in 2013. electricity consumption of headquarters and the two warehouses based in The Netherlands. ZDHC & Supplier Detox Program Furthermore, by procuring renewable energy Through the DETOX Commitment with Greenpeace G-Star RAW Sustainability Report 2020 we could make significant steps in reducing our we committed to ban the use of hazardous Scope 1 and 2 emissions, as well as by focusing chemicals from our products and production on energy management guidelines for our stores. processes in our supply chain. This followed our Specific reduction targets are planned to be set membership to the Zero Discharge of Hazardous by 2022, when the Scope 3 baseline has been Chemicals (ZDHC) initiative. The ZDHC member defined as well. brands unite around a joint roadmap to ensure safe and sustainable chemical use in the fashion industry. In 2021, we will take next steps by doing the Moving forward, we will continue to work with the Scope 3 carbon footprint analysis to understand tools of the ZDHC initiative, as well as applying our total carbon footprint. We will do this exercise the Higg Facility Environmental Module (FEM) in collaboration with RESET Carbon Limited. We standards and tools to monitor the performance in will first do a Scope 3 mapping to identify the production and manufacturing of our garments in main emission hotspots, followed by a Scope 3 our so-called Supplier DETOX Program.
PLANET CONTINUED Higg Facility Environmental Module (FEM) environmental impacts, especially regarding The Higg FEM allows manufacturing factories average chemical management scores. These to measure their environmental performance, scores represent 66% of our production volume. benchmark their results against peers, and identify To improve the environmental performance in areas to make meaningful improvements. The G-Star’s supply chain, we will continue to disclose Higg FEM guides factories through a step-wise the Higg FEM performance of our suppliers. In approach to environmental management. 2021 we aim to publish the Higg FEM verified The following graph shows that, compared to supplier performance that represents 80% of 20186, our suppliers have improved across all G-Star RAW production volume. Verified FEM assessments of G-Star RAW tier 1 and tier 2 factories 48.41 36.3 Average waste score verified 35.39 39.71 22.89 Average air emissions score verified 30 83 68.75 Average water score verified 58.41 73.89 60.74 Average wastewater score verified 46.4 54.19 Average Chemicals Management 35.79 score verified 16.88 83.4 Average Environmental Management 63.54 System score verified 67.9 91.33 Average Energy/Greenhouse 83.4 26 Gas emission score verified 57.73 67.7 52.60 Average score total verified 44.67 0 20 40 60 80 100 G-Star RAW Sustainability Report 2020 2019 2018 2017 For definitions of supply chain tiers, please see our Supply Chain Handbook 6 Suppliers are asked in 2020 to disclose data of 2019. Therefore, our reflection on 2020 includes FEM supplier data from 2019. Data displayed was not verified by an external party.
PLANET CONTINUED MRSL performance per parameter The performance per parameter of all factories As part of our Supplier DETOX Program, all G-Star included in the program is shown in the overview RAW's supply chain partners are required to follow below. As can be seen, a small percentage of ZDHC’s Manufacturing Restricted Substances List failures and non-tested parameters require our (MRSL). We also encourage them to make use attention. We are working together with our of the ZDHC Gateway to identify safer and more suppliers to improve these failures. In 2021, we will sustainable alternatives and to test wastewater to continue to engage suppliers to further strengthen ZDHC Wastewater Guidelines. Our DETOX program sustainable chemical management practices, for now covers 75% of our annual production volume example by requesting suppliers to purchase safer (including tier 1 and 2 wet processing facilities), and and more sustainable (ZDHC MRSL conformant) we have seen 90.4% compliance in the last year. chemical products. All factories - Performance by Parameter (MRSL Substances) VOCS Polyaromatic hydrocarbons Phtalates PFOA Organotin compounds Halogenated solvents Glycols Flame retardants Disperse dyes Carcinogenic dyes Azo dyes Chorophenols Chlorobenzenes and Chlorotoluenes 27 APEOs/Aps % of manufacturers 0% 20% 40% 60% 80% 100% . Not Detected Detected Not Tested G-Star RAW Sustainability Report 2020
REFLECTION ON 2020 Strategic Topic 2019 Achievements 2020 Highlights & Progress 2021 Actions & Goals Circularity Launched 4th generations of Cradle to Cradle Certified™ Received Cradle to Cradle Certified™ Gold certification Define roadmap for the 2025 Cradle to Cradle Certified™ Gold denim Fabric, with the on product level. goals. Word’s 1st stretch. Received Cradle to Cradle Replace 90-95% of all Worked with Fashion Positive Certified™ Gold certification polybags with recycled PE to define and promote safe for Black Denim. polybags. and circular materials. Set new 2025 goal: 20% Pilot paper-based polybags. Set a new circular roadmap for of our collection should be packaging made with Cradle to Cradle Re-initiate in-store takeback Certified™ fabrics. service to collect post- consumer waste. Tested if virgin plastic polybags could be swapped for polybags made from 100% recycled post-consumer polyethylene (PE). Conducted research on circularity initiatives (pre- and post-consumer waste options) and determined to focus on upcycling and takeback schemes. Sustainable 97% of our cotton is sustainable cotton. Reached 99% sustainable cotton by the end of 2020. Get certified on brand- level for Organic Cotton Materials Standard and explore Global 86% sustainable materials Reached 93% sustainable Recycle Standard brand-level across all products. materials by the end of 2020. certification. Benchmarked materials for Elaborated Fiber Ranking for Publish Fiber Ranking for on- sustainability in our Fiber on-product communication product communication. Ranking. and aligned with stakeholders to improve the tool. Keep involved with new industry tools for fiber Integrated Fiber Ranking benchmarking. within different departments: Product Development, 28 Sourcing, Design, and Marketing. Defined Sustainable Materials roadmap and set goals for 2025 and 2030. ANIMAL WELFARE G-Star RAW Sustainability Report 2020 • Ban on Down • Use of animal derived fibers is now part of our Sustainable Materials strategy (for more details see Animal Welfare policy)
REFLECTION ON 2020 CONTINUED Strategic Topic 2019 Achievements 2020 Highlights & Progress 2021 Actions & Goals Climate Change Deployed the Higg Facility Environmental Module (Higg Aligned / integrated with other departments on goals Scope 3 footprint mapping (with external consultant). FEM) tool to understand our and priorities (in particular carbon impact in the supply logistics) for Scope 1 and 2 Define 2025 roadmap & chain. emissions. priorities. Signed up to the UN Fashion Aligned with external partner Charter for Climate Action: to prepare for Scope 3 built an inventory of Scope 1 mapping in 2021. and 2 emissions. Pollution Deployed the Higg Facility Environmental Module (Higg 90.4% average compliance to the G-Star RAW DETOX Adopt Higg verified FEM at Tier 1 (and 2) supplier that FEM) tool to understand our program. represent 80% of G-Star RAW carbon impact in the supply production volume. chain. Completed the ZDHC 2020 Brand Leader programme. Train and engage suppliers on Signed up to the UN Fashion G-Star RAW environmental Charter for Climate Action: The Higg verified FEM requirements. built an inventory of Scope 1 that represents 66% of our and 2 emissions. production volume scored an Improve supplier compliance average of 67.7/100. to the G-Star RAW DETOX program. 29 G-Star RAW Sustainability Report 2020
G-Star RAW Sustainability Report 2020 30 PHILANTHROPY
PHILANTHROPY The GSRD Foundation was founded in 2007 Education as G-Star’s corporate foundation. Its mission is Vocational training and education for young to create a positive impact on the lives of the people, focusing on knowledge and skills that people and communities in the countries where will help them to learn a trade, improving their G-Star RAW products are made. It does so by chances of getting a job and thus of having a supporting projects that focus on the education, better future. training and coaching of young people. Entrepreneurship Our ethos is that knowledge, an entrepreneurial Life-skills training and coaching for young mindset and self-empowerment are key people, to help them to become independent, to economic independence and social seize initiatives and leverage opportunities in development. To facilitate this, the Foundation order to become more self-sufficient, either supports projects that focus on education and as proactive employees or through self- entrepreneurship. employment. The GSRD Foundation is active in four G-Star RAW production countries: Bangladesh, China, India and Vietnam. 31 G-Star RAW Sustainability Report 2020 Bangladesh India • Active since 2008 • Active since 2008 • Supported 35.825 beneficiaries over the years • Supported 171.850 beneficiaries over the years • Currently 6 active projects • Currently 7 active projects China Vietnam • Active since 2009 • Active since 2014 • Supported 530.429 beneficiaries over the years • Supported 15.615 beneficiaries over the years • Currently 3 active projects • Currently 6 active projects
PHILANTHROPY CONTINUED The Foundation supports all of its projects through to strengthen the projects we support and the partner organizations, which have a proven partner organizations that run them. All projects track-record in education and entrepreneurship seek to help people leverage opportunities to and countries where GSRD is focusing its efforts. become more self-sufficient, either as proactive We strive for long-term relationships in order employees or through self-employment. Currently the GSRD Foundation The GSRD Foundation has been works together with working together with 18 partners. 54 partners over the past year. 22 projects are being 92 projects have been supported supported today. since 2008. Beneficiaries supported through: 763.046 lives have been impacted by the GSRD Foundation since 2008 32 Education Entrepreneurship Education & Entrepreneurship The COVID-19 pandemic has created Support from the disaster fund was not only unprecedented challenges for our partners and used for emergency relief, but also to cover G-Star RAW Sustainability Report 2020 projects in the countries where G-Star RAW operational costs during lockdowns (e.g. being products are made. Some of our partners also able to pay the salary of the teaching staff or had to suffer from floods, cyclones and other the rent of the vocational training center). We natural disasters on top of the devastating effects are in close contact with all our partners and of the pandemic. We supported our partners to we will keep on supporting them throughout adjust to the situation and we provided additional this crisis. support for COVID-19 prevention and for the communities most affected by the virus. We do so by providing additional funding for specific We reached COVID-19 interventions. Examples of additional support provided include hygiene packages and food distribution, awareness raising activities 73.301 people during the COVID-19 crisis and handing out personal protective equipment. through our disaster fund.
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