SUSTAINABILITY 2017 - Kathmandu Holdings
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2 SUSTAINABILITY REPORT 2017 INTRODUCTION SUSTAINABILITY REPORT 2017 3 OUR STORY We were born in New Zealand Original. —a breathtaking country where Sustainable. isolation breeds innovation and Engineered. the hunger to explore. Adaptive. For 30 years we have designed These four principles are the gear to endure the rugged foundation of every piece that landscapes of our homeland, and carries the Kathmandu logo. to outfit the adventurous spirit of They’re the basis of the questions our people. we ask ourselves throughout the design and manufacturing process. With Kiwi ingenuity, and an open mind, we continuously adapt our gear to endure different weather conditions, diverse terrain and the ever-changing needs of travellers. We act with people and the planet in mind—from the creative minds of our designers to the careful hands of our suppliers, to the backs of our customers all around the world. We believe that adventure begins when you pack your bag. Easter in Queenstown, New Zealand, 2016 We are Kathmandu.
4 SUSTAINABILITY REPORT 2017 INTRODUCTION SUSTAINABILITY REPORT 2017 5 OUR TOP 10 SUSTAINABILITY HIGHLIGHTS 5 Launched our 5 Green Star AU Distribution Centre Won the Banksia ‘Large Business Sustainability Leadership’ award and two APC awards B+ in the Ethical Fashion Guide supporting workers’ rights Partnered with bluesign® to eliminate harmful chemicals Ranked #2 in the outdoor and sports category 2017 Textile Exchange Preferred Fibres and Materials report 8.5 M 8.5 million bottles of water saved 3.9 M 74 % Increased recycling rate 899 kg Recycled 3.9 million plastic Increased sustainable from 69% to 72%. 106 stores 899kg of clothes donated bottles into our gear cotton from 59% to 74% now recycling polybags to Red Cross Shops
6 SUSTAINABILITY REPORT 2017 INTRODUCTION SUSTAINABILITY REPORT 2017 7 CONTENTS CHAIRMAN’S & CEO’S REPORT As Kathmandu celebrates our 30th 8 Our Journey anniversary this year, we’ve had a Since 1987, we’ve been building a culture of sustainability and now we’re chance to reflect on how we’ve starting to think even bigger. evolved as a company. This report demonstrates how our aspirations for sustainable practice have matured over the last three decades. As a travel and adventure brand, we 16 Our Suppliers feel a great responsibility of caring for Looking after the people in our supply chain is our number one priority. our planet. We’re not in it alone. Our We’re evolving a new approach to how we do it. industry is actively working together to influence change and we are proud to be a part of the global progress. In FY 2017, we were honoured to 26 Our Products receive the Banksia Large Business The materials we choose make a big difference to our impact. We’ve made Sustainability Leadership Award, big strides this year in sustainable textiles. recognising the commitment and focus across our team. We were also DAVID KIRK XAVIER SIMONET acknowledged by the Textile CHAIRMAN CHIEF EXECUTIVE OFFICER Exchange ranking our business second globally in the outdoor and 44 Our Footprint sports category of the Preferred Operational efficiency supports environmental sustainability. First we Fibres and Materials 2017 Report. measure and then we act. We are pleased to have expanded our soft plastics recycling programme to 106 of our stores as we progress towards our zero-waste-to-landfill 52 Our Community target. We have also expanded our customer engagement programmes Connecting our communities, customers and causes we care about. Our and community investments. strategy focuses on three ways to improve people’s lives. This year, as in previous years, people have been at the heart of our journey to be a responsible corporate citizen — from taking an active role in the 62 Our Team personal development of our team The three pillars of our People Plan are helping us develop a safe, engaged members to protecting the rights of and high performing team. every person in our supply chain.
30 Years of OUR JOURNEY JOURNEY First Australian 1987 store opened First New Zealand 1991 store opened 50 stores 2007 total Kathmandu was 2009 publically listed 100 stores 2009 total Launched our Sustain 2010 the Dream plan OUR Released our first 2012 sustainability report 150 stores 2014 total Launched our international website 2016 and wholesale partnerships Kathmandu was recognised with 2017 the Large Business Sustainability Summit Club member Bob McLaughlan in Leadership award in Australia — the South Island of New Zealand for our Banksia Foundation 2007 Winter catalogue shoot.
10 SUSTAINABILITY REPORT 2017 INTRODUCTION SUSTAINABILITY REPORT 2017 11 OUR JOURNEY, Kathmandu ambassador Tim Jarvis What would it take for us to uses adventure to raise awareness for environmental issues. SINCE 1987 move beyond sustainability towards being a business that puts back more than it takes out? We’ve done a lot of growing up in the last 30 INDUSTRY AND INTERNATIONAL FOCUS years. What would it take for us to move beyond Sometimes, our impacts are not front of mind sustainability towards being a business that puts for our customers. But that doesn’t mean they back more than it takes out? Our 1991 catalogue cover features are not important. Industry partners give us a boat navigating the pack ice of Big dreams like these can only be achieved if other tools for understanding our impacts. The Mowbray Bay, Antarctica. everyone plays a part. We’ve been building a Higg Index, a suite of self-assessment tools culture of sustainability that helps everyone designed by the Sustainable Apparel Coalition understand the impact of their role—from the with its roots in the outdoor industry, helps factory pressures caused by a late purchase order brands understand their impacts. It showed us to the waste we produce every day. At the same that chemical management is an area we time, our Sustain the Dream strategy provides a should focus on. The apparel industry accounts framework for measuring impacts and driving for 25% of global chemical use. Yet this was not change across the organisation. at the tops of our customers’ minds. To reduce our chemical impact, we partnered HOW WE KNOW WHAT’S IMPORTANT with bluesign®, an independent organisation A customer hikes through Fox Testing hiking gear on the Glacier in New Zealand. that guides brands toward better chemistry. We To understand our impacts and prioritise our Tongariro Crossing in 2002. Credit @brandoyelavichexplorer see it as part of our role to educate team action, we look to our stakeholders. They members and customers about these less- consistently tell us that human rights in the obvious impacts. supply chain should be our top priority. This year, The 1994 catalogue commemorated we’ve evolved our approach in this area—putting Because sustainability is all about making a the 100 year anniversary of the first more emphasis on openly building capability difference, collaboration is the key to driving summit of Mount Cook in 1894. instead of the cat-and-mouse game of auditing. industry-wide change. We work with others in our industry — even our competitors — in our We undertake detailed assessments and surveys mission to use business to drive change. every two years to identify and understand social and environmental impacts, rather than Our top five material issues have a strong focus material issues, but the communication is on people and are closely aligned to the United We’ve partnered with the Australian Himalayan Foundation since 2012. ongoing. We have regular conversations with our Nation’s Sustainable Development Goals. This customers on social media and through our report looks closely at the progress we’ve made customer service channels. This year, we saw a this year in these five issues: workers’ rights, spike in concern about microfibres and this product innovation, operational footprint, prompted us to develop clearer communications community engagement and team about how we understand this problem and development. what we can do about it. For further information on how we engage with our stakeholders and prioritise our environmental and social impacts, please visit www.kathmandu.co.nz/corporate-responsibility/ reports-and-policies
12 SUSTAINABILITY REPORT 2017 OUR JOURNEY SUSTAINABILITY REPORT 2017 13 BETTER TEXTILE EXCHANGE AUSTRALIAN HIMALAYAN FOUNDATION Our membership with the Textile Exchange supports our We have been partners with materials strategy, we also the AHF since 2012. We work TOGETHER participate in the Preferred with the AHF to support Fibres and Materials report. communities in Nepal, the nation that inspired our brand. GREEN BUILDING HIMALAYAN TRUST OF NZ Our partnerships with industry OUTDOOR INDUSTRY COUNCIL OF AUSTRALIA ASSOCIATION We have recently partnered associations help us measure Our membership with the with the Himalayan Trust to We participate in OIA’s and improve our own progress. Sustainability Working Group, a GBCA supports our green further improve outcomes building program. We also in education, health and We’re also able to better work collaborative platform of more work in collaboration with sanitation in Nepal. than 300 outdoor brands and towards global solutions to suppliers working together to this organisation in trialling new projects. the challenges faced in our identify and implement better business practices. industry. Our partner organisations are like specialist coaches. They guide SUSTAINABLE APPAREL CARBON DISCLOSURE AUSTRALIAN RED CROSS our strategy and train us to COALITION PROJECT We have been partnered with perform better. They pull us up Membership to the SAC gives We submit an annual Australian Red Cross since if we go astray and give us the us access to the Higg Index report to the CDP which 2011. We support their modules. We’ve been using the supports our carbon humanitarian work and tools we need to stay on track. index since 2014 which measurement and reduction emergency responses. supports our sustainability programme. We scored a B strategy. The index guides us for our 2016 report. on the environmental and social impacts of our products “The global supply chain and how we can improve. of apparel is complex FAIR LABOR ASSOCIATION ENVIRO-MARK SOLUTIONS NEW ZEALAND RED CROSS and interconnected. We’ve been members of the Our membership with We have been partnered with New Zealand Red Cross since The power of the OIA FLA since 2014. This organisation supports our CSR Enviro-mark Solutions helps us to measure our carbon 2011. We support their Sustainability Working strategy on our pathway to accreditation and ultimately footprint as well as facilitating carbon offsetting projects. humanitarian work and emergency responses. Group is bringing protecting workers rights in our supply chain. outdoor companies together to share OUTWARD BOUND learnings and find BLUESIGN® AUSTRALIAN PACKAGING COVENANT ORGANISATION Our bluesign® system We have been partners with solutions as an industry.” partnership supports our We submit an annual report Outward Bound since 2005 chemicals management to the APC which supports to enable growth through programme, materials our packaging and waste outdoor experiences with BETH JENSEN and products so that strategy. Our 2017 report was our staff, customers and SENIOR DIRECTOR OF SUSTAINABLE they are environmentally our highest score, 4.7 out of 5. young people. BUSINESS INNOVATION AT THE and socially friendly. OUTDOOR INDUSTRY ASSOCIATION
14 SUSTAINABILITY REPORT 2017 INTRODUCTION SUSTAINABILITY REPORT 2017 15 OUR WORLD Manufacturers Russia 142 FACTORIES IN CHINA U.K. Denmark 8 FACTORIES IN VIETNAM Canada Ireland Germany Netherlands Ukraine 7 FACTORIES France Serbia Bulgaria IN TAIWAN Macedonia China Spain Italy Greece Turkey U.S.A. South Korean Japan Materials Sourcing Israel Iran Afghanistan Nepal Pakistan Laos Taiwan Nicaragua Guatemala Cambodia Operations India Vietnam Phillippines Costa Rica Nigeria Somalia NEW ZEALAND AUSTRALIA Indonesia 47 STORES 116 STORES Peru Tanzania Timor-Leste Papua New Guinea 1 DISTRIBUTION 1 DISTRIBUTION Vanuatu Fiji Samoa CENTRE CENTRE Zimbabwe Namibia 1 1 Chile Australia OFFICE OFFICE South Africa Argentina Community Partnerships New Zealand 1,419 SPONSORSHIP APPLICATIONS 214 FREE GEAR RECIPIENTS Team Nationalities Antarctica
30 Years of OUR SUPPLIERS SUPPLIERS First Australian 1987 store opened First Chinese 2001 supplier First Vietnamese 2001 supplier First Taiwanese 2002 supplier Started to audit 2012 our factories Published our supplier 2014 Code of Conduct Joined Fair Labor 2014 Association OUR Scored a ‘B’ in the 2015 Ethical Fashion Report First Indonesian 2016 supplier First Nepalese 2016 supplier Scored a ‘B-’ in the 2016 Ethical Fashion Report Scored a ‘B+’ in the 2017 Nepalese women knitting our Khusi Ethical Fashion Report beanie in Bhaktapur, Nepal.
18 SUSTAINABILITY REPORT 2017 OUR SUPPLIERS SUSTAINABILITY REPORT 2017 19 PEOPLE FIRST Our suppliers 2017 140 TOTAL SUPPLIERS 100 % NEW SUPPLIERS screened using social criteria Workers sewing DriFill Down Jackets at a Evolved management approach builds supplier in Shenzhen, China. 8.5 YEARS on brand values. average tenure with suppliers Our customers, shareholders, them. If we have influence we will RESPONSIBLE PURCHASING AUDITS HAVE LIMITS partners and team members agree — take the opportunity to work with This year, we have also been working Auditing factories has been the main looking after the people who make suppliers to solve problems. But when 40 on a responsible purchasing policy. method that companies around the our products is the most important there is a supplier with severe TOTAL The policy outlines the responsibility world have used to measure conditions AUDITS thing we can do to be a responsible problems and an unwillingness to we have as a brand to ensure that we in the supply chain. But after several company. improve, and we don’t have any are not putting duress on our decades, it’s clear that, on their own, 2 influence or ability to facilitate UNANNOUNCED Corporate social responsibility is a factories through delays to the audits have failed to improve the lives change, our best bet is probably to AUDITS clunky term and it means different development process and that we are of workers in global supply chains. Too walk away. things to different organisations. At working to best buying practices. often, they simply promote a game of 35 Kathmandu, it’s simple. Our CSR We’re aware that leaving a factory Delays during the development cat and mouse between the auditors team is committed to protecting impacts the people who work there process can mean that factories have and the suppliers. The audit is not SUPPLIERS human rights and improving too, so how we leave is also important less time to produce the product, designed to identify or address the root corrective action plans conditions for workers through our — we can do it in a way that has which can lead to excessive overtime causes of issues or prevent them from supply chain. To achieve that, we’re minimal impact on workers. work and subcontracting. occurring again. evolving our approach to one that is less about risk management and Secondly, we adjust audit scores to put greater weight on the values that “It’s in our interest to get this right,” says Group Product Operations ON THE ROAD TO FLA 2 EXITS more about transparency and equaling 5% of total are most important to us such as Manager Tara Strangwick. “Robust ACCREDITATION suppliers partnership. integrity, honesty and openness. By supply chain management and the For the last four years Kathmandu has investing more in those suppliers who implementation of initiatives like the been on the journey towards FROM AUDITING TO are transparent about their responsible sourcing policy will benefit accreditation with the Fair Labor UNDERSTANDING challenges, we believe we can do us not just from a CSR perspective 100 Association (FLA). Our new approach more good for the workers. but also from a quality and business Our new approach is to move away to working with suppliers is in line with HOURS process perspective.” from cat and mouse towards Lastly, we are prioritising the the best practices and training office staff transparency and understanding. We challenges. “We can’t solve all of the To ensure the success of our recommendations of the FLA. B+ in the achieve this in a number of ways. problems at once,” says Corporate responsible purchasing initiative we For more information on our Supplier Ethical Fashion Firstly, by segmenting our supply chain, we categorise our suppliers Social Responsibility Manager Gary Shaw. “So we have to focus on are including policy requirements and key performance indicators in all job Code of Conduct, please see: www.kathmandu.co.nz/corporate- 95 % according to the severity of their addressing those issues that we can descriptions with purchasing of support office staff 2017 Report problems and our ability to influence immediately impact.” responsibilities. responsibility/reports-and-policies employees trained
20 SUSTAINABILITY REPORT 2017 OUR SUPPLIERS SUSTAINABILITY REPORT 2017 21 WORKERS’ We’ll continue to BEYOND THE AUDIT This year we have partnered with own corrective action plans (CAPs) look for ways to Elevate Limited, a new social and then work in partnership to resolve compliance partner that has a wealth them. In addition we will support VOICE collaborate with of experience in capacity building and them with targeted eLearning and worker empowerment. We will still training modules that specifically brands to reduce use audits but with the understanding address the challenges they are facing. that they are just a snapshot in time We’ll be working with suppliers to help the pressure of and provide us with a baseline from them understand how these audits on our which to target improvements. improvements can also make their companies more profitable with better We will encourage supplier ownership suppliers. by empowering them to create their staff retention and improved efficiency. Workers in Shanghai sewing the women’s hooded pullover. Breaking ground with In our mission to improve conditions So we’re trying something new. We CASE STUDY for workers, hearing and listening to are developing a communication a WeChat grievance their voice is critical. channel for workers on the social EMBRACING OUR mechanism. Unions and collective bargaining give media platform, WeChat, to meet COMPETITION TO workers where they are and to give workers in many parts of the world a them an anonymous way to report ACHIEVE MORE We partnered with Columbia Sportswear voice. But 85% of our suppliers are in to educate workers and managers about problems. In our mission the importance of contributing to China, where collective bargaining is Chinese Social Insurance. almost unheard of. This means we We’re including a QR code on our Protecting vulnerable workers is a job to improve need other tools. Code of Conduct to be displayed in the workplace so that workers can that is bigger than any one single brand. To make progress, we have to One common practice is interviewing We’ll continue to look for ways to when they shift provinces. Workers on conditions for workers at their workplace as part of easily connect by scanning the code into their mobile phone. This new work together. This year, we contacted some of our outdoor industry peers collaborate with brands to reduce the low wages are not motivated to invest any audit, but this doesn’t usually pressure of audits on our suppliers. part of their pay into this government workers, result in honest communication and communication channel will also allow us to conduct anonymous and engaged with them as supply chain partners. With one supplier, we We also worked with eight other scheme, but without contributions, feedback. hearing and worker surveys in addition to in- worked with Columbia Sportswear, REI international brands this year to help they are not eligible for the benefits, like healthcare and retirement income. We currently have an email account factory interviews. This gives us a way Co-op and MEC to do one audit educate workers and managers about listening to where workers anywhere in our global to truly measure change — and find instead of four. This is more cost the importance of contributing to By sharing the costs with eight other supply chain can contact us. This out what initiatives are actually efficient for each of us, but it also Social Insurance in China. It’s a brands we were able to implement an their voice is channel of communication hasn’t making a difference in the lives of helps relieve ‘audit fatigue’ for the complex problem, exacerbated by education programme that will help worked — we’ve received zero emails those who make our apparel and supplier, freeing them to spend more migrant workers finding it difficult to increase payments and protect more critical. in the last three years. equipment. solving the problems. contribute or access social insurance workers.
22 SUSTAINABILITY REPORT 2017 OUR SUPPLIERS SUSTAINABILITY REPORT 2017 23 “Without a willingness to improve, it is hard to continue to work with a factory that has very different values” TARA STRANGWICK GROUP PRODUCT OPERATIONS MANAGER KHUSI BEANIE By employing Nepalese knitters to create our CASE STUDY even after two years of failed audits, Khusi beanie, we’re helping them find we hadn’t seen any change in independence in a region where women are AUDITS RESULT IN attitude. Without a willingness to still struggling to match the literacy and TWO EXITS improve, it is hard to continue to employment rates of men. work with a factory that has very different values. A hero product of our winter 2017 It was important that we didn’t let the feel- The second exit was because the range was a beanie that combines good nature of this project wash over the details of our supply chain accountability. The We carried out 40 audits this year. In audit found forced labour. We had our product development with our beanies were knitted in small home and 10 of those, we found significant incidents of non-compliance with our little influence in this facility and again the supplier was unwilling to community work. community-based groups but then sent to a factory for final touches and packaging. This code of conduct. We followed up on cooperate. Although forced labour is eight of these by issuing corrective factory had never been audited by an overseas common in the apparel industry, action plans and ongoing company, so we sent auditors in and they did especially in areas where there are remediation efforts. For the other find some issues of non-compliance as we lots of migrant workers, this is a deal two, we ended our relationship. expected. A corrective action plan (CAP) was breaker for us. We passed on the agreed on to ensure that the entire project has Despite the high costs involved in details to other brands who use the integrity and those working at the factory are exiting a supplier, the decision was same supplier and who have greater also empowered and protected. made to exit one factory because, leverage to insist on change.
24 SUSTAINABILITY REPORT 2017 OUR SUPPLIERS SUSTAINABILITY REPORT 2017 25 TEAM PROFILE Kathmandu now has two full-time people dedicated to improving conditions in the supply chain. Here’s a look at how they got here and why they care. CASE STUDY PUTTING VALUES INTO ACTION In early 2017, we visited a factory in China and asked to look through the books. The factory produced a flawless set of books and our auditor was suspicious that these “Human rights is records were falsified. our single most “Some companies have zero tolerance and this leads factories important priority to cook the books,” says Corporate Social Responsibility Manager Gary as a brand—and Shaw. “In this case, we explained to the factory managers that we’re that’s because not looking for perfection, we’re CSR manager Gary Shaw pointing to our code of conduct with one of our Chinese suppliers. looking for honesty and people matter.” transparency.” The translators explained this to the GARY SHAW factory manager and eventually he CORPORATE SOCIAL GARY SHAW re-emerged with a completely RESPONSIBILITY MANAGER different set of books. At his interview for the job of he came home with enough Corporate Social Responsibility experience to write a book, and then “Suddenly, we had a relationship,” manager, Gary Shaw was clear about started his own anti-human Gary says. “With that trust, we his role. “If you’re looking for someone trafficking non-profit organisation. could move away from us being to simply minimise your risk, don’t hire the policeman and them trying to Gary brings his skills for getting to the me. But if you want to make an get away with something. Now heart of a problem and his passion for impact as a business, I’m your man.” that they understand our values, defending human rights to his role at we can work together to help the Gary holds a masters degree in third- Kathmandu. In his first eight months, factory to improve.” world economic development, and is he’s already using his experience to particularly passionate about issues of shake up the company’s CSR exploitation and injustice. He originally approach in a way that will drive imagined working for the UN but more tangible improvements for instead followed a childhood dream of workers. being a police officer and then a “Knowing how vulnerable so many detective in the New Zealand Police. people in the world are, I really feel Gary took a leave of absence from there is an exciting opportunity for a the police to gather evidence required great Kiwi company like Kathmandu to rescue people from human to drive change.,” says Gary. “Human trafficking and prosecute those rights is our single most important responsible. He went undercover and issue as a brand—and that’s because used a false identity. Four years later, people matter.”
30 Years of OUR PRODUCTS PRODUCTS First Australian 1987 store opened First NZ 1991 store opened Started recycling plastic 1994 bottles into our gear Licence agreement 1998 signed with GORE-TEX® Became Fairtrade 2013 licensee Joined the Better 2015 Cotton Initiative OUR 100% Responsible 2016 Down Standard Bluesign® 2016 partnership Canopy 2016 partnership Committed to Responsible 2016 Wool Standard Summit Club member Bob McLachlan on Recycled 3.9 million 2017 the way to Muller Hut in Aoraki Mt Cook bottles into fabric National Park.
28 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 29 TRADE OFFS Our priority of preferred materials: When comparing the impacts of different 1. Responsible Down 2. Recycled Polyester materials, there’s no easy answer. This year we became members of the At the end Which material is the most sustainable? Down or synthetic? and with our industry peers in order to find solutions that are viable for Textile Exchange. In of the day, Cotton or viscose? Polypro or wool? If there was an easy answer, our job the entire industry at scale. Inform means being transparent about what 2016 they ranked us #2 in the outdoor sports we are would be simple. we’re doing and where we are in the “All materials have trade-offs and journey. It’s also about category for how we motivated there are no easy answers,” says communicating with customers to help them make good choices. integrate preferred Kathmandu Textile R&D and by the finite Responsible Material Manager Manu “Material solutions targeting ocean materials into nature of Rastogi. plastics” has been added to the list business operations. this year at number eight. This is Life cycle impact assessments tell us our world. that about 85% of the impact of a looking at how our materials choices can prevent plastics ending up in product comes from the material we oceans or even develop products that choose. So it’s important to look remove plastics from oceans with closely at each material’s impact on recycled plastic components. 3. Sustainable Cotton 4. Bluesign® Approved Fabrics/Trims climate change, water use, pollution, and resource depletion. Microfibres also sit in this section. The problem of tiny fragments of Our approach is to analyse materials polyester clothing ending up in according to the size of their impact oceans has become more important and how much influence we can over the last year. This material have. We’ve ranked them in order of problem might sit higher in the list, importance into a list that we call but as a relatively new problem, our Preferred Fibres and Materials. there aren’t many clear solutions yet, “It’s a fluid list,” says Manu. “It so our ability to influence it is lower 7. P referred Man- changes according to global impacts than some of the others. Made Cellulosics and customer feedback as well as our At the end of the day, we are internal priorities as our business motivated by the finite nature of our 8. M aterial Solutions evolves.” world. Raw materials are limited, but Targeting Ocean Plastics The Preferred Fibres and Materials the pressures on those raw materials strategy at Kathmandu has three continue to increase. main pillars: lead, connect and “If we don’t make changes, we will inform. Leadership is all about not have enough resources for both driving innovation and setting the food and clothing,” says Manu. 6. M aterial Solutions bar high. Connection is a strategy for 5. Responsible Wool Targeting Water Saving building partnerships with suppliers
30 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 31 “They are interested to hear about how their product is being used.” 33 % MANU RASTOGI of our synthetic TEXTILE R&D AND RESPONSIBLE insulation is recycled MATERIALS MANAGER & bluesign® approved Manu visiting one of our down suppliers in China, RDS certification in the background. RECYCLED EVERYDAY SYNTHETIC RESPONSIBILITY INSULATION Responsible down has become business as usual. As we start our journey toward more We reached the summit, but the journey is far sustainable synthetic insulation, we’re already from over. one-third of the way. Last year, we achieved our goal of The work continues with our suppliers When it comes to warmth for weight, workers and safe for consumers. 100% of our down being certified by too. We will always need to monitor nothing beats down. On expeditions Because recycled polyester is number the Responsible Down Standard. This our supply chain, which includes where these two factors are make or two in our priority of preferred standard, which was developed by farmers but also processors, agents break, there really is no other choice. materials, we are constantly looking global non-profit, the Textile Exchange, and slaughterhouses. It’s a process of We like down because it’s a natural for new innovations in the area of is a way to make sure the down in our continual engagement and education. product and one that is a waste recycled insulation and working on products comes from birds that have material from goose farming. “When we visit these farmers, they are ways to increase its use in our ranges. been treated well—that means no live so glad to meet us,” says Manu. “They Most synthetic alternatives require plucking or force feeding. It means the Polartec Alpha and Primaloft Silver are interested to hear about how their more extraction of petrochemicals, animals have enjoyed the five Eco are two types of insulation in our product is being used, who is wearing but when we can use recycled freedoms of animal welfare. range. Both use more than 50% these products. We can talk to them polyester, we can offer a sustainable recycled content and are bluesign® The RDS certification is gaining about what customers expect and alternative to down that will work in approved. Using tiny fibres with traction. There are now 400 million connect and build trust. It’s important all but extreme circumstances. pockets of air to trap heat, these birds under farm certification to the that we aren’t completely relying on Already, 33% of our synthetic synthetic insulation options are a RDS. This is up from 150 million birds the standard.” insulation is recycled and also great leap forward for sustainable, last year. bluesign® approved, which means it synthetic insulation. We can’t go beyond 100%, but our has been manufactured in a way that journey is not over. is safe for the environment, safe for
32 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 33 RECYCLED POLYESTER We’ve been recycling plastic bottles into products for 23 years. This year, we recycled almost 4 million bottles. 3.9 MILLION plastic bottles recycled into product in 2017 Kathmandu was founded 30 years ago, when fleece was just hitting the scene as a great-leap-forward in materials technology. Compared to wool, it was amazingly light and warm and quick-drying—all revolutionary attributes for outdoor enthusiasts. Kathmandu quickly became the largest user of Polartec fabric in the Southern Hemisphere. In 1994, after a decade of development by Malden Mills in the USA, Kathmandu launched Ecofleece, a recycled fleece fabric. A 1996 Kathmandu catalogue declared that “wearing an Ecofleece garment makes a statement of your awareness and concern for the environment.” Today, polyester has outstripped cotton to become the world’s most in demand fabric—there is currently twice as much demand for polyester compared to cotton and the gap is growing steadily. With limited fossil fuels available to feed this demand, and a mounting mountain of post– consumer plastic waste, recycling is the obvious answer. Global demand is reflected here at Kathmandu, where polyester is our number one fibre in terms of use. So shifting from virgin to recycled polyester is an important part of our materials strategy. For the last few years, we’ve been measuring the number of plastic bottles we recycle in our garments. In 2016, we aimed to recycle 1 million bottles. We beat our target by 20% to get to 1.2 million. So we set our sights higher. Our FY2017 goal was 2.5 million bottles. And our actual was a whopping 3.9 million. Next year, we’re upping the ante again. Our 2018 goal is to recycle 5 million plastic bottles into products. Unifi, who makes our Repreve recycled polyester, Summit Club member Bec Cotton, who has a PHD in sustainability, wears was named fibre producer of the year at the 2016 the new Earthcolours Hoodie at a recent World Textile Awards. shoot in Japan.
34 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 35 100% IS IN SIGHT We’re more than two-thirds of the way towards our goal of sourcing 100% sustainable cotton by 2020. Cotton is a great natural resource but Kathmandu is one of the top 10 Better Sustainable conventional cotton production has Cotton retailers when measured as a serious environmental and social percentage of total cotton cotton breakdown consequences. The cotton industry is consumption. responsible for 24% of the world’s The BCI programme began insecticide use and 11% of pesticides. implementation in 2010. By the 2015-16 We’re on track to meet our goal of season, it had reached 1.5 million sourcing 100% sustainable cotton by cotton farmers across 23 countries in 2020. This year we reached 74% — up five continents. Better Cotton was 74 from 59% last year. % grown on 3.4 million hectares of land, We source a mix of organic, Fair Trade, accounting for 12% of global recycled and cotton sourced through production. the Better Cotton Initiative (BCI) to BCI’s results show that in the 2015-16 make up our sustainable cotton mix. season, BCI farmers in India used an BCI makes up the largest part of this average of 9% less pesticides whilst portfolio. BCI is a global initiative that achieving 20% higher yields than those aims to find more sustainable solutions not using BCI techniques. These results for farmers, for the environment and really are better — better for farmers, for the future of the sector. better for the environment. The initiative aims to have 5 million farmers producing 8.2 million metric tonnes of Better Cotton by 2020. That’s around 30% of global cotton 49 % BCI 18 % Organic production. Organic cotton, by 5 2 comparison, makes up around 1% of % % global cotton production. Fairtrade Recycled Our sustainable 100% 2020 cotton journey 74% 2017 59% 59% 2014 2016 38% Cotton harvesting at a Fair Trade cotton 2015 farm run by our supplier Pratibha Syntex in India.
36 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 37 H2OPE “Water is at the core of sustainable development, healthy ecosystems and human survival.” Fair Trade worker at Pratibha Syntex in India. THE UNITED NATIONS Recycled cotton: from factory scraps Fairtrade supplier wins to customers’ backs award for water savings 8.5 MILLION Recycolor cotton is the latest addition to our sustainable cotton Pratibha Syntex is our supplier of Fairtrade line-up. It’s biggest win is water savings, says Kathmandu Textile products. It is a vertical textile manufacturer, R&D and Responsible Materials Manager, Manu Rastogi. meaning it employs everyone from farmers right through to garment sewers. It works “Cotton’s biggest environmental impact is water use,” says Manu. with 30,000 farmers and 7,000 employees to Cotton uses water in growing, production, and dyeing. deliver garments to global apparel brands Conventional dyeing has other negative effects too. In China, from more than 20 countries. The business is where around 65% of the world’s clothing is produced, the World bottles worth of fresh water saved in 2017* Bank estimates 17 to 20 percent of industrial water pollution built around sustainable practices all the way through the supply chain. comes from textile dyeing and treatment. Based in India, Pratibha’s owners, employees To make Recycolor cotton, scraps are gathered up from factory and families have faced an intensifying water cutting tables, sorted by colour, and then fed into huge stripping crisis for more than a decade. The company machines that break the fabric back down into their original fibres. decided that business-as-usual was not an These broken-down fibres are usually too short to spin, so they are option and they began to develop water- mixed with virgin cotton to create a stronger finished yarn. The efficient farming practices, fabric production The textile industry is a big water-user so resulting fabric has a distinctive marle-look that needs no dyeing. and manufacturing. Along the way, they innovations here can make a big difference. The recycled cotton portion of Recycolor fabric uses about 70% have also been able to support economic less water. development for thousands of farmers and workers. It’s not hard to understand why clean Textile R&D and Responsible Materials water is important. The United Manager, Manu Rastogi. Last year, Pratibha reduced fresh water Nations says, “Water is at the core of consumption by 14% and total water The textile industry is not only one of sustainable development, healthy consumption by 21%.They did this by using a the largest polluters but is also one of ecosystems and human survival.” It is raft of measures from moving to drip complex because it is linked to the largest consumers of water and Water-saving dyeing process irrigation, using low-water dyeing processes, energy. The industry has high levels of everything — from food production installing water meters on all equipment, re- wastewater discharge, about 600 to climate change to human health using water onsite and re-capturing steam. litres of wastewater per kg of textile to war. on average. It is estimated that Ecoya is a nylon fabric dyeing process that puts the colour in at They are on track to reduce their dependence More than a billion people currently around 25% of the chemical the beginning to save water. The pigment is added to the on water by a further 1 billion litres, which will live in water-scarce regions, and by compounds produced world-wide are polymers before the yarn is spun. So you have coloured yarn and reduce risk for at least 30,000 farmers and 2025 an additional 3.5 billion people used in the textile industry and it also no need to dye the fabric. their families. may be affected. takes up to 40,000 litres to irrigate Traditional dyeing methods require an inefficient process that Pratibha’s work was recognised in 2015 by a the cotton to maturity and provide The UN’s Sustainable Development applies colour to the surface of the fibre after it is produced. This Global Award in Sustainable Apparel (GLASA). finishing for 1 kg textile (Asano and Goal 6 calls for improved water is water and energy intensive. Visvanathan, 2001). quality and water-use efficiency The result is big savings on water, energy and CO2 emissions. by 2030. We’ve identified some areas where we And, because the yarn is dyed all the way through, this Ecoya can start reducing water use and will “We’re aware that water is one of the process also improves the colour fastness of the garment. continue to grow our water-saving world’s biggest environmental measures over the next five years. Ecoya has been introduced this year into some of our travel shirts. priorities — so we’re making it one of our priorities, too,” says Kathmandu *based on 500ml bottles We also use solution dyeing in our Polypro baselayer range.
38 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 BLUESIGN THE UNSEEN PLASTIC ® A new partnership helps address one of our industry’s biggest impacts. POLLUTION PROBLEM The apparel industry accounts for IF YOU KNOW WHAT GOES IN, YOU 25% of global chemical use. Only 10% KNOW WHAT COMES OUT of the chemicals that go into a textile The aim of the bluesign® system is factory, come out in the fabric. The responsible use of resources, clean rest is either recycled or ends up in processes with controlled air and the air, the water, the land—and the water emissions, safe processes for people. the workers and safe products for We’ve partnered with bluesign®, an consumers. To achieve this, the independent chemical auditor that system defines criteria for works with producers, manufacturers ingredients, for the manufacturing and brands to reduce harmful process and for finished products. By Our restricted chemicals in the textile industry. making sure all the ingredients are approved, it’s much easier to make substance list Bluesign®, which was founded in sure the finished products are 2000 and is headquartered in approved. Switzerland, continually pushes for “better chemistry”. Bluesign® also works with a growing Toxin-absorbing plastic microfibres Kathmandu published its (inset) shed from polyester clothing are number of brands, who need a way being discovered in waterways all around restricted substance list online at Bluesign® partners like Kathmandu to navigate the complex textile the world. the end of July 2017. This is have access to the extensive industry and give customers important because it give bluesign® database of more than 900 assurance that materials have been customers a transparent look at chemicals, which are rated as blue manufactured responsibly. what substances we will not (clear to use), silver (use with good allow in our products going management) or black (never use). As more brands sign up as system forward. As we grow into a Bluesign® helps factories manage partners, it creates more demand Tiny plastic fragments from clothes have been found in oceans all global company, this will be silver chemicals with good practice for bluesign® approved materials and important for compliance. While and replace black chemicals with puts pressure on the whole industry around the world. What we can do about it is not yet clear. Australia has only three bluesign® approved. to improve. restricted substances, there are Customers know that a bluesign® Microfibres are tiny fragments of WHAT IS THE INDUSTRY DOING? WE’RE ALSO EDUCATING more than 3000 chemicals approved fabric has been KATHMANDU SIGNED UP AS A fabric (smaller than 5mm) that shed CUSTOMERS. restricted globally. The first step is to understand more. manufactured in a way that is safe BLUESIGN® SYSTEM PARTNER IN from clothing when it’s washed. They Luckily, we’re not alone. Our entire Most microfibres are released by RSL: www.kathmandu.co.nz/ for the environment, safe for workers DECEMBER 2016 are so small that many of them are industry needs to face the microfibres home washing machines, so corporate-responsibility/reports- and safe for consumers. not caught by washing machines or “Becoming a bluesign® system problem and we can be more customers can also have a role in and-policies wastewater treatment filters and so partner is a significant step in our effective in partnership than in our finding solutions. Initial research they end up in rivers, lakes and, sustainable materials strategy,” says own brand silos. shows that top loaders shed seven eventually, the ocean. Textile R&D and Responsible times more fibres than front loaders. The Outdoor Industry Association Materials Manager Manu Rastogi. Microfibres, being plastic, absorb Sustainability Working Group have set There are also a few home-based “We see bluesign® as the gold toxins and, unlike natural fibres, they up a Microfibres Task Force to microfibre-catching products making standard for ensuring that our do not break down. The biggest investigate the problem further and their way onto the market. We’re 25 The apparel products are free from hazardous concern is that marine life are % look for industry-wide solutions. educating customers about these chemicals and are made as ingesting these tiny, toxin-filled fibres industry accounts responsibly as possible. When we and that the plastics (and toxins) are Early research shows that high quality options and also the idea of washing less and making their voice heard. for 25% of global choose bluesign® certified fabrics, making their way back into our food fabrics shed fewer fibres, so there we are assured that the raw cycle. may be some choices we can make chemical use. materials we use help protect not when choosing fabrics that will make only the environment, but also those a difference. As an industry, we may who come in contact with them: also be able to put pressure on textile textile workers, factory workers and manufacturers to develop fabrics that ultimately, our end consumers.” shed fewer microfibres.
40 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 41 PROTECTING ENDANGERED FORESTS A growing demand for viscose is threatening fragile habitats. Man-made viscose comes from communities have been evicted wood fibres. It sometimes goes by from their lands—sometimes even the names of rayon, modal or violently intimidated by lyocell. The textile industry, aggressively expanding logging especially the fashion industry, is companies. using more and more of it every year. This growing demand is THERE ARE ALTERNATIVES. putting pressure on endangered forests. Trees might not be the best source of pulp. The current process wastes Kathmandu has joined approximately 70% of the tree and CanopyStyle to be part of the uses a lot of chemicals to solution. manufacture. One of CanopyStyle was formed in 2013 to CanopyStyle’s solutions is to protect endangered forests from support development of being culled by the textile industry. alternative pulp sources from Every year, between 70 and 120 agricultural waste. million trees are felled for fabric. CanopyStyle is now the fastest- That’s enough to circle the equator growing environmental initiative in seven times. the global fashion industry. In the last three years, more than 100 GLOBAL HOTSPOTS brands, representing more than $100 billion in revenues, have Canada, Brazil and Indonesia are signed on to CanopyStyle. the biggest exporters of pulp. Indonesian rainforests are home to By working with both producers pygmy elephants, Sumatran tigers, and consumers (brands), 40 orangutans, rhinoceros and CanopyStyle has locked in the % thousands of bird, animal and manufacturers responsible for 70% insect species. of global viscose production to take steps to make sure they aren’t Indonesia ranks as the third largest sourcing material from global emitter of greenhouse gases endangered forests. (behind the US and China)—mostly because they are logging these All Kathmandu viscose is supplied of Indonesian high carbon peatland forests. In by Lenzing. A recent audit of the last 50 years, over 40 percent Lenzing confirmed that its supply CanopyStyle is working to protect Indonesian rainforests that provide rainforests lost in the of Indonesia’s rainforests have chains are at low risk for sourcing habitat to orangutans from the pressure of growing demand for viscose fabric last 50 years been lost. from ancient and endangered forests. from wood fibres. Species have been pushed to the brink and forest-based
42 SUSTAINABILITY REPORT 2017 OUR PRODUCTS SUSTAINABILITY REPORT 2017 43 RESPONSIBLE WOOL Care and Repair Keeping an eye on quality Helping grow demand for a traceable standard that protects animals and the land. 86 PLANNED INSPECTIONS High quality products last longer and have less impact. To make sure products meet our quality standards, we carry out 39 inspections in our distribution centres. We REACTIVE INSPECTIONS do proactive inspections with products that way down our supply chain—from might be high risk—maybe they are from a This year, Kathmandu has continued the extra cost involved in signing up new supplier or maybe there were quality 0 its collaboration with the Responsible to the certification is worthwhile. This farmer groups, topmakers, spinners, PRODUCT knitters and our garment factories to concerns in the prototype stage. Reactive Wool Standard, a voluntary global doesn’t mean that farmers aren’t RECALLS support them through the transition quality inspections happen when a shop or standard that addresses the welfare doing the right thing by their land and and let them know that this a customer raises a quality concern. of sheep and the land they graze on. animals, it just means they can’t see Progress has not been as quick as we had hoped. Our aim was to introduce the value in tracking it to the level that the standard requires. assurance of animal welfare is important to us. 1,007 REPAIRS IN NEW ZEALAND Customer health & safety RWS products to stores by winter 2018, There are some certified sheep out but we’ve had to revise that to summer 2019. there now, growing their woolly coats over winter ready for shearing in 1,750 REPAIRS IN AUSTRALIA Ensuring our products are safe for our customers is critical so that they are safe in August/September. We’re looking the outdoors. When we introduce any new Part of the problem is that there is an forward to being able to identify product into the market, we ensure we’ve 18-month cycle from the birth of a those sheep on the tags of our wool researched the compliance requirements. certified lamb to its wool arriving in products in a few seasons. We had one incident of noncompliance stores as a jumper. In the meantime, we’re which resulted in a fine. This one incident There are lots of challenges along the occurred because the product was still communicating with people all the way. One is convincing farmers that within the registration process. In the future, we will not release products into the market until compliance checks are complete. Privacy We have a stringent policy and processes to protect the privacy of our Summit Club members and online account customers. Last year, we received 12 customer complaints relating to online breaches of privacy. The complaints resulted from a technical issue after a change to our website. A full audit of our website was conducted immediately. We found two pages with personal customer information that should have been excluded from our cache service. The problem was rectified within 24 hours and a full explanation was provided to all affected customers. We received no complaints from external organizations or any regulatory body regarding privacy and no leak, theft or loss of customer data was identified. Summit Club members Goodwin Williamson and Johanna Thuvesson at the head of Lake Pukaki.
30 Years of OUR FOOTPRINT First Australian 1987 store opened New Zealand’s first 1991 store opened Replaced plastic bags with recycled paper 2012 bags in our store network FOOTPRINT Became a signatory to the Australian 2012 Packaging Covenant (APC) Released our first annual 2012 sustainability report Received Australian Packaging 2014 Covenant award Joined the Green Building 2014 Council of Australia Committed to a zero waste 2014 to landfill by 2018 target Committed to reducing our carbon 2014 emissions by 20% by 2020 Won an award with the 2014 Carbon Disclosure Project Melbourne CBD flagship store designed 2015 to target 5-Star Green Building rating OUR Began our first carbon offset 2016 project at the Hinewai Reserve Christchurch support office opened 2016 as second 5 Star Green Building Received Australian 2016 Packaging Covenant award Melbourne distribution centre opened 2017 as third 5 Star Green Building Our carbon credits go towards Received two Australian 2017 developing this native habitat at Packaging Covenant awards Hinewai Reserve on the Banks Peninsula.
46 SUSTAINABILITY REPORT 2017 OUR FOOTPRINT SUSTAINABILITY REPORT 2017 47 GOOD GREEN HOUSEKEEPING BUILDINGS Operational efficiency supports environmental sustainability. We think of managing our Financial Officer Reuben Casey. environmental footprint a bit like “Waste and energy usage affect good housekeeping. It helps us everyone at Kathmandu, so we are operate more efficiently and makes us excited to be integrating solutions to feel proud of our role as corporate reduce our impact.” The new Melbourne Distribution Centre is citizens in a finite world. We use the Higg Index, a ground- our third 5 Green Star building. We are very clear what our priorities breaking suite of self-assessment tools are — developing our green building developed by the Sustainable Apparel programme and our recycling Coalition, to measure our impacts and strategy as well as reducing our find areas where we can improve. energy usage. We know these things are important because our customers When measuring our footprint, the Higg Index helps us measure and “There’s no This year, we opened our second 5 Green Star rated building. Our building programme helps us reduce our operational footprint as well as “We built for and partners tell us. This year, we partnered with Conscious Consumers, prioritize how we manage our operational footprint. It also helps us question that Australian distribution centre joins our New Zealand Support office with this enhancing staff health, wellbeing and productivity. the future.” which allows customers to link environmental and social concerns to understand our port-to-port carbon emissions, where we see dramatic operational distinction. Building materials are chosen for their STUART DAY The 25,000 square metre building is lower life cycle impacts. Stormwater is purchases. Their 10,000 members said waste and packaging was their differences between sea freight and air freight. The Higg Index also helps us efficiency three times the size of the previous captured to supply amenities and to COMMERCIAL MANAGER distribution centre but uses the same irrigate surrounding landscaping. biggest environmental concern. manage packaging and waste. supports amount of energy. The incoming Solar panels and insulation reduce the So how do we shift the dial? First we measure, then we set goals and We also measure ourselves against the United Nation’s Sustainable environmental goods platform faces east to avoid bad weather while the office area is amount of energy needed. Ventilation, natural light and noise develop action plans to achieve them. These strategies minimise our impact Development Goals (SDGs). SDG 12 is about responsible consumption and sustainability.” orientated to the north to capture natural light. control all help make the indoor environment more pleasant. and also boost our bottom line. production. Our waste management The Green Star standard looks at strategy is a big part of our Stuart Day, commercial manager of “There’s no question that operational REUBEN CASEY innovation, water use, energy and contribution in this area. SDG 13 is Kathmandu’s distribution centre says, efficiency supports environmental emissions as well as indoor about taking action on climate CHIEF OPERATING & “We built for the future and want to sustainability,” says Chief Operating & environmental quality. Our green change. FINANCIAL OFFICER use this space for the next 20 years.”
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