Sustainability Report 2018 - KATHMANDU HOLDINGS LIMITED - AWS
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SUSTAINABILITY REPORT 2018 INTRODUCTION SUSTAINABILITY REPORT 2018 1 World ready. We come from New Zealand, Whether you’re on an epic home to some of the world’s expedition, volunteering in harshest conditions. Since a remote part of the world, 1987 we’ve been engineering or exploring the best local outdoor gear for adventurers trails, you can be confident all over the world – preparing you can take on any all kinds of people for their destination in any weather next adventure. conditions with Kathmandu. For us, preparation is more We believe travel and than having the right gear. adventure is the ultimate Caroline Bellamy Adventurer and artist from It’s a mindset. It’s having life experience. With Nelson, New Zealand curiosity, an open mind, and product engineering and a hunger to learn. expert advice, we aim to Lake Marian, Fiordland give you the confidence National Park – South Island New Zealand to discover the world.
2 SUSTAINABILITY REPORT 2018 INTRODUCTION SUSTAINABILITY REPORT 2018 3 Our top 5 sustainability A highlights. 2 At Kathmandu, sustainability isn’t a department, it’s a way of doing things. Here are some #2 world ranking Scored an 'A' of our highlights from last year. by the Textile in the Ethical Exchange for Fashion Report preferred materials Fair Labor 80% towards Recycled 6.7 Association our zero waste to million bottles accredited landfill target into our gear
4 SUSTAINABILITY REPORT 2018 INTRODUCTION SUSTAINABILITY REPORT 2018 5 Contents. Chairman’s and CEO’s report. There have been some big wins 10 Our Journey for Kathmandu this year in our Since 1987, we’ve been building a culture of sustainability and sustainable practices. Not only now we’re starting to think even bigger. did we have our human rights work validated by Fair Labor Association accreditation, we also received an 'A' score in the Ethical Fashion Report. 18 Our Suppliers We know that workers’ rights is Looking after the people in our supply chain is our number one priority. the issue that our customers We’re evolving a new approach to how we do it. and shareholders care most about, so these results are important in more ways than one. We’re also incredibly proud of 28 Our Products our second placed Textile Exchange The materials we choose make a big difference to our impact. ranking for sustainable material We’ve made big strides this year in sustainable textiles. use and for diverting 80% of our waste from landfill. DAVID KIRK XAVIER SIMONET CHAIRMAN CHIEF EXECUTIVE OFFICER This year, Kathmandu acquired the Oboz footwear brand based in Montana, USA.Oboz is a leader in 46 Our Footprint footwear and product design and Operational efficiency supports environmental sustainability. have been one of our customers First we measure and then we act. since its inception more than ten years ago. All our achievements are possible because of the many passionate 54 Our Community people who champion Connecting our communities, customers and causes we care about. sustainability at Kathmandu – Our strategy focuses on three ways to improve people’s lives. from our store network to support offices. Sustainability isn’t a department, it’s a way of doing things. 64 Our Team The three pillars of our People Plan are helping us develop a safe, engaged and high-performing team.
6 SUSTAINABILITY REPORT 2018 INTRODUCTION SUSTAINABILITY REPORT 2018 7 “I think too many Tim Jarvis people are waiting for someone else uses adventure to save us all from climate change. to champion It will come down to individuals and the planet. organisations to be the change agents.” Kathmandu Ambassador Tim Jarvis is an environmental explorer and Tim is highlighting the real impacts of climate change by climbing all adventurer. He uses his world-first the mountains around the equator TIM JARVIS expeditions to share stories about that still have a glacier, documenting KATHMANDU AMBASSADOR environmental causes and help and recording their recession. people to take action. “There are 25 of those, and they’re at Tim was awarded 2016 Conservationist 0 degrees latitude. In a quarter of a of the Year by Australian Geographic century they’ll be gone due to climate for his 25zero project, which is raising change,” he says. awareness about the loss of equatorial glaciers. GEAR TO GET OUT THERE Tim worked with Kathmandu in the FINDING HIS WAY redesign of our XT expedition gear When he was just 12 years old, series, which he tested on a climb getting lost (and then finding his way) of Mt Kilimanjaro in June. in a Malaysian jungle helped Tim “To me, Kathmandu is about understand what he was capable of. getting out there, travelling, “I was scared, but I got back. That doing it responsibly, expanding began a feeling of being empowered your horizons and discovering new in the outdoors that’s kind of things for yourself. It’s also about continued ever since,” he says. making a contribution. I think too Spending time in nature made Tim many people are waiting for someone want to protect it, and that led to a else to save us all from climate career in environmental sciences. change. It will come down to individuals and organisations to “Things have kind of gone full circle be the change agents.” because now I use my expeditions around the world to try and highlight environmentalism,” he says. ADVENTURE ADVOCACY Tim has led expeditions to the South and North Poles, across many deserts and up many mountains. He retraced the journeys of Sir Douglas Mawson and Sir Ernest Shackleton using the 100-year-old equipment that they would have used. With his latest project, 25zero, Adventurer and Kathmandu Brand Ambassador Tim Jarvis testing the new XT range.
8 SUSTAINABILITY REPORT 2018 INTRODUCTION SUSTAINABILITY REPORT 2018 9 Oboz outdoor footwear joins our family. This year, Kathmandu acquired Oboz – HOW DO YOU DESCRIBE YOUR opportunities and we are so excited an outdoor footwear company from VISION AND PURPOSE? to continue our journey as partners. Bozeman, Montana. Founder John We’re excited to help Kathmandu Our motto is ‘true to the trail’. Our Connelly shares some insights about grow its footwear business in New vision is to become the next great the Oboz journey and the Zealand and Australia and to have the American outdoor footwear brand. sustainability ethos that has been support and resources to develop our We think our greatness will come core to the brand from the very international businesses together. from manifesting passion, truth and beginning. Two key areas I believe we’ve needed soul in every pair we sell. help in are sustainability and Our purpose is to inspire, enhance innovation. We’re already seeing some HOW DID OBOZ COME TO BE? and promote active outdoor lives. benefits. I couldn’t be more pleased. In January 2007, I was having dinner Our mission is to treat our employees with REI’s footwear category manager and customers with respect and HOW IS SUSTAINABILITY and Chuck Roth (our director of dignity, build collaborative and APPLIED AT OBOZ? design). I mentioned that I was profitable alliances with our retail considering starting a new brand. One of the things I’m most proud and distributor partners, create The category manager said REI of (and I can’t remember whose idea shareholder value and continually would support it and become our it was) is that we decided to plant a strive to do things better, to minimise first customer. The next day, tree for every pair we’d sell. This was our carbon footprint and to always Kathmandu said they’d become before we even had a company name build the best-quality and best- our second customer. With these or any samples. We’ve now planted – performing outdoor footwear we votes of confidence, a plan was put through Trees for the Future – just possibly can. into motion. A factory was lined up, under 2,000,000 trees. Almost from investors were signed up, designs the beginning, we’ve run our offices were started, samples were made. HOW DOES WORKING WITH on wind power, and we’ve offset The brand launched at Outdoor KATHMANDU TAKE THE OBOZ our carbon footprint. All recyclable Retailer in November 2007. We VISION FURTHER? materials are recycled. With started a footwear company and Kathmandu’s help, we hope For me, selling the company to and came to market in record time. to do more. working with Kathmandu is the perfect ending to what was a great Another thing I’m very, very proud beginning. Having worked with of is that, for the last two years, 2016 WHERE DID THE NAME Kathmandu and visited New Zealand and 2017, we’ve won REI’s Vendor of OBOZ COME FROM? for three years prior to starting Oboz the Year Award for their outdoorwear Oboz is a combination of Outside made it feel very comfortable and like division, their largest division. and Bozeman. Bozeman, Montana, it was meant to be. The businesses is our home base and lies in the are very compatible, and we share the Greater Yellowstone ecosystem, which same values. Although we were includes five major mountain ranges successful and had strong year-over- and Yellowstone and Grand Teton year growth, moving up to the National Parks. Oboz is a unique land number three functional outdoor of glaciers and geysers, of bison, brand in the US, it has been wolves and grizzly bears where there challenging at times competing with is world-class fly fishing, hiking, biking, giant, well established brands. We climbing, river running, skiing and don’t have the resources our big wildlife encounters. It’s our inspiration competitors have, so joining up with and our testing ground. Kathmandu opens more growth “Our motto is ‘true to the trail’. “ JOHN CONNELY OBOZ FOUNDER Copyright Stephen Matera
10 SUSTAINABILITY REPORT 2018 OUR JOURNEY SUSTAINABILITY REPORT 2018 11 “I use my expeditions around the world to try and highlight environmentalism.” TIM JARVIS GLOBAL BRAND AMBASSADOR Journey. Our Tim Jarvis explores New Zealand’s Tasman Glacier.
12 SUSTAINABILITY REPORT 2018 OUR JOURNEY SUSTAINABILITY REPORT 2018 13 A sustainability programme built on passionate individuals. “Sustainability is about awareness and “At Kathmandu, sustainability goes supply chains. then positive behaviour change,” says hand in hand with everything that we We look to industry partners who can Kathmandu Sustainability Specialist do,” says Oliver. It’s about the people see the industry impacts as a whole – Oliver Milliner. and empowering them to get involved. did you know that the apparel There is nothing more rewarding to From our store team members taking industry accounts for 25% of global see when new staff join the company action to recycle shop fittings to the chemical use? Organisations like the and start making sustainable choices brand manager picking up rubbish on Sustainable Apparel Coalition help both at work and at home.” her favourite running trails, it is a brands better understand and collection of passionate individuals manage their impacts. that have piloted Kathmandu’s HOW DO WE KNOW Overarching all this is the question sustainability journey. WHAT’S IMPORTANT? what’s important to a healthy planet? We are guided by our Sustain the Everyone who connects with our The United Nations Sustainable Dream strategy, which provides a brand in some way deserves a voice in Development Goals are a great framework for measuring impacts how we prioritise our environmental framework for us to check ourselves and driving change across the and social work. That means against. We’re looking for new ways company. The strategy uses the employees, customers, shareholders to align our business to these goals. Sustainable Apparel Coalition’s (SAC) and people in our supply chain. For more information about how we Higg Index framework and aligns with This communication is happening all engage with people close to our brand the United Nations Sustainable the time, through interactions in store, and prioritise environmental and Development Goals. Our partnerships online and in the boardroom. We see social impacts, visit: www.kathmandu. and certifications help guide us as part of our role as education, sharing co.nz/corporate-responsibility/reports- well as providing a future pathway for what we have learned along the way and-policies. improvement. about the impacts of materials, reducing waste and working with “Sustainability is about awareness and then positive behaviour change.” Tim Jarvis testing the new XT OLIVER MILLINER range in New Zealand’s Aoraki/ Mt Cook National Park. SUSTAINABILITY SPECIALIST
14 SUSTAINABILITY REPORT 2018 OUR JOURNEY SUSTAINABILITY REPORT 2018 15 A little help from TEXTILE EXCHANGE AUSTRALIAN HIMALAYAN FOUNDATION Our membership with the Textile Exchange supports We have been partners with our friends. our materials strategy, and the AHF since 2012. We work we also participate in their with the AHF to support Preferred Fibre and communities in Nepal, the Materials Market report. nation that inspired our brand. Every explorer knows that a journey is better with someone by your side. As we continue the OUTDOOR INDUSTRY GREEN BUILDING HIMALAYAN TRUST journey of sustainability, industry partnerships ASSOCIATION COUNCIL AUSTRALIA NEW ZEALAND provide important support ‑ resources, information and frameworks. We participate in OIA’s Our membership with the We have recently partnered Sustainability Working Group, GBCA supports our green with the Himalayan Trust to a collaborative platform of building programme. further improve outcomes in more than 300 outdoor brands We also work in education, health and and suppliers working together collaboration with this sanitation in Nepal. to identify and implement organisation in trialling better business practices. new projects. SUSTAINABLE APPAREL CARBON DISCLOSURE AUSTRALIAN RED CROSS COALITION PROJECT We have partnered with Membership of the SAC gives We submit an annual Australian Red Cross since us access to the Higg Index report to the CDP, which 2011. We support its modules. We’ve been using supports our carbon humanitarian work and the index since 2014, which measurement and reduction emergency responses. supports our sustainability programme. strategy. The index guides us on the environmental and social impacts of our products and how we can improve. “The Higg Index FAIR LABOR ASSOCIATION ENVIRO-MARK SOLUTIONS NEW ZEALAND RED CROSS empowers We became the first brand in the southern hemisphere to Our membership with Enviro-Mark Solutions helps us We have partnered with New Zealand Red Cross organisations at achieve FLA accreditation. to measure our carbon since 2011. We support its This verifies that our social footprint as well as facilitating humanitarian work and any stage of their compliance programme in our carbon offsetting projects. emergency responses. sustainability journey supply chain exceeds the most stringent global standards. to reduce their environmental impacts BLUESIGN® AUSTRALIAN PACKAGING and strengthen the Our bluesign® system COVENANT ORGANISATION communities where partnership supports our We submit an annual report chemicals management to the APC, which supports they operate.” programme, materials our packaging and waste and products so that strategy. JASON KIBBEY they are environmentally and socially friendly. SUSTAINABLE APPAREL COALITION CEO
16 SUSTAINABILITY REPORT 2018 OUR JOURNEY SUSTAINABILITY REPORT 2018 17 KEY Our world. Arctic MANUFACTURERS 75 TOTAL (Only Kathmandu manufacturers) China – 59 Vietnam – 7 Taiwan – 2 New Zealand – 2 Indonesia – 2 Israel – 1 Nepal – 1 India – 1 Iceland Russia MATERIALS SOURCING Norway Denmark UK Scotland Germany Canada Ireland Poland Netherlands Belgium France Austria Switzerland OPER ATIONS Macedonia China New Zealand Italy Greece 47 stores USA South Korea Japan 1 distribution centre Malta Iraq 1 office Algeria Israel Afghanistan Nepal Egypt Australia Mexico Pakistan Thailand Taiwan Laos 116 stores Yemen 1 distribution centre Myanmar Cambodia 1 office India Vietnam Philippines Ethiopia America Nigeria Sri Lanka 1 office Malaysia Somalia Indonesia United Kingdom Rwanda 1 store Brazil Fiji Samoa Zambia Chile Australia COMMUNITY South Africa PARTNERSHIPS Argentina 13 Adventure Sponsorship winners travelled to: Antarctica, Iceland, New Zealand Egypt, Brazil, Australia, Arctic, Norway, New Zealand, Ethiopia, Thailand. 214 adventure sponsorship recipients Antarctica 46 NATIONALITIES ACROSS OUR TEAM
18 SUSTAINABILITY REPORT 2018 OUR SUPPLIERS SUSTAINABILITY REPORT 2018 19 “We are not about ticking boxes. We are about making change.” Suppliers. GARY SHAW CORPORATE SOCIAL RESPONSIBILITY MANAGER Our This year’s Christmas gifts for good are hand-crafted by women in Nepal.
20 SUSTAINABILITY REPORT 2018 OUR SUPPLIERS SUSTAINABILITY REPORT 2018 21 We’re learning to use audits as a step towards change. Sustainability is about people, RESPONSIBLE PURCHASING CODE OF CONDUCT especially when it comes to We’ve used responsible purchasing to For more information about our protecting human rights in our make sure we’re not putting pressure Supplier Code of Conduct, visit supply chain. on our factories that would make it www.kathmandu.co.nz/corporate- Over the last 18 months, our harder for them to keep excessive responsibility/reports-and-policies . approach to looking after people overtime in check. all the way down our supply chain And we’ve put more weight on has evolved. We’ve put values and improvement than on perfection. transparency front and centre, Auditing helps us find areas that which means our suppliers are need improvement, but working clear about how we expect them closely with factories to make change to look after their workers, but they is when we have a real opportunity also understand why this is important to improve conditions for workers. to us and to our customers. OUR SUPPLIERS 2018 150 Kathmandu and branded suppliers 8.6 YEARS AVERAGE TENURE WITH SUPPLIERS 40 0 Unannounced Audits 100 TOTAL AUDITS 12 Corrective Action Plans % NEW SUPPLIERS SCREENED USING SOCIAL CRITERIA 13Exits 200 Hours training office staff Support office employees trained = CSR Specialist based in China DriFill down jackets being A worker fabricates jackets at produced in Shenzhen, China. a factory in Shenzhen, China.
22 SUSTAINABILITY REPORT 2018 OUR SUPPLIERS SUSTAINABILITY REPORT 2018 23 FLA accreditation Scoring an 'A' shows collaboration in the Ethical and transparency. Fashion Report. After a four-year journey, Kathmandu became the first in the Southern Today, the non-profit helps around 5.5 million workers across the world to “We commend Each year, the Baptist World Aid and Tear Fund rate apparel brands in Hemisphere to have its compliance have a voice in their own futures and Kathmandu for Australia and New Zealand on their programme accredited by the Fair feel safer at work. supply chain practices. In the 2018 Labor Association (FLA). its strong report, Kathmandu received an 'A' There are just 43 brands to have LEARNING CONTINUES commitment to score for the first time. received this accreditation. It comes after lengthy reviews, assessments “Working with the FLA has really transparency.” “This score shows they have confidence that our systems are robust and follow helped us understand what good and audits designed to make sure best practices,” says Corporate Social corporate social responsibility (CSR) companies fulfil the principles of fair SHARON WAXMAN Responsibility Manager Gary Shaw. looks like,” Gary says. labour and responsible sourcing. FLA PRESIDENT AND CEO FLA President and CEO Sharon VALUES DRIVE IMPROVEMENT Waxman says, “We commend IN LEAGUE WITH GIANTS Kathmandu for its collaboration Gary attributes the increase from “This puts us alongside companies like with other brands and civil society 'B+' in 2017 to 'A' in 2018 to a number of Patagonia, Adidas and Nike,” to remediate labour rights violations, changes. “We partnered with ELEVATE, says Corporate Social Responsibility along with the company’s strong a company that better reflects our Manager Gary Shaw. commitment to transparency in values,” Gary says. “We started using publishing its supplier list and results a technology platform called RizePoint, The FLA grew out of a group of of FLA factory assessments online.” which helps us manage audit scores so multinational companies and NGOs that we can see trends and measure brought together by President Clinton ourselves against best practice. The in 1996 to improve working conditions focus is not just on policing the supply in the apparel and footwear industries chain but improving it. The software after a series of high-profile incidents delivers e-learning modules to suppliers exposing sweatshop labour. in their own language so that that they can learn how to make changes and why those changes are important.” CONNECTING DIGITALLY Other improvements this year include the introduction of a grievance mechanism that utilises the popular Chinese social media platform WeChat. Gary says the next range of improvements will be about going beyond compliance towards proactive supply-chain capacity building and development. “We are not about ticking boxes. We are about making change,” Gary says. Sewing jackets in Shenzhen, China.
24 SUSTAINABILITY REPORT 2018 OUR SUPPLIERS SUSTAINABILITY REPORT 2018 25 CASE STUDY WeChat complaint opens doors for improvement. For years, the official grievance COLLABORATING FOR IMPACT channel for workers in our supplier The grievance was sent to Kathmandu factories sat dormant. Even if workers and to MEC in Canada. Kathmandu had access to email, approached four other brands with they would have struggled with production at the same factory. the English email address. Together, the six companies made up Last year, we introduced a new almost all the factory’s business. method through the ubiquitous “We knew that, through collaboration Chinese social media platform and joint problem solving, our efforts WeChat that worked by scanning a would have greater impact due to our QR code. The hope was that workers group influence at the facility,” would be able to contact us if they Gary says. weren’t being treated fairly in their A Kathmandu employee runs workplace, even though it can Initially, the factory denied the charge, training to help build better Workers from TGI, a supplier outside sometimes go against traditional but eventually conceded they had grievance mechanisms. Ho Chi Minh City, Vietnam. Chinese culture to make such a covered up subcontracting. complaint. There are signs that these cultural “In the end, they were very apologetic,” Gary says. “They seemed surprised “CSR and human norms are shifting. This year, we that we genuinely wanted to know rights relies on us SUPPLIER SPOTLIGHT Women-run factory received our first grievance from about their problems so we could help workers in our supply chain. It them improve. I think they assumed being able to inspect became an opportunity to test our that we only cared about having our and do audits so recycles water to feed systems and drive real improvements boxes ticked at audit time. They have for workers. said they didn’t understand the value we placed on transparency.” we can say with The workers reported various confidence that the workers fresh vegetables. health and safety breaches and that the factory was subcontracting ELEVATING STANDARDS people are being work to other factories without our knowledge or approval. The factory is now working with our ethical sourcing partner treated well.” ELEVATE on a six-month improvement GARY SHAW Outside Ho Chi Minh City, TGI’s Kathmandu Sourcing Manager Phil The company also rewards employees’ RELYING ON TRANSPARENCY programme. Kathmandu’s China- based CSR specialist is also running CORPORATE SOCIAL two factories make fleece and Bailey says, “I have been to more children with money for each year of “CSR and human rights relies on us RESPONSIBILITY MANAGER woven garments for Kathmandu. than 1000 factories in my career, and school they complete. In 2018, they training to help the company build being able to inspect and do audits so only a handful of those are run by gave financial prizes to 218 children of more robust internal grievance TGI CEO is Ms Nguyen Bao Tran, we can say with confidence that the women." workers. TGI also gives university mechanisms for the factory. who was trained by the Chairman, people are being treated well,” says scholarships to rural children. Corporate Social Responsibility “It starts with us having to explain Mr Vu Duc Giang, to take this role. TGI has taken other initiatives Manager Gary Shaw. “It relies on to them why we care about their Mr Giang says his philosophy with to look after workers. It uses Phil says the TGI factories rate transparency. That’s why our terms workers and why our customers care,” rural factories is to find local talent mindset training to help workers highly for quality, delivery and of trade don’t allow outsourcing Gary says. “They have gone on a and train them through to senior set goals and to help them grow corporate responsibility. As a result, without asking our permission first.” journey of improvement, which all the management. Along with the CEO, into management roles. Kathmandu has increased its orders brands will be watching closely. We six of the seven senior management through the factory. Both factories have water recycling will keep working with them as long are women. systems. At one, the water supplies as they are willing to improve. a small farm that helps to feed the Working together on these problems workers, who are split between is where the real opportunity for their two factories according to change exists.” their food preferences.
26 SUSTAINABILITY REPORT 2018 OUR SUPPLIERS SUSTAINABILITY REPORT 2018 27 Moving the dial on human rights. AUSTRALIAN MODERN WORKER VOICE SLAVERY ACT The Australian Modern Slavery Act is Our audit partner ELEVATE has currently in the process of being partnered with Laborlink, an legislated . The law is similar to others award-winning mobile platform in the UK and USA, which that establishes a two-way acknowledge that there are more communication channel for people in slavery today than ever workers to share their viewpoints before in history – 45 million people in real time and for companies to according to estimates from the have clear visibility of worker Global Slavery Index. “A lot of them wellbeing in their supply chains. From are hiding in the global fast fashion 2018, every full audit we conduct will industry,” says Kathmandu Corporate be integrated with Laborlink and Social Responsibility Manager Gary allow us to ask our workers specific Shaw. The International Labour questions about their safety and Organisation reports that half of wellbeing. This tool will facilitate modern slaves are in debt bondage, better detection and risk analysis, working to repay impossibly high enhanced reporting and prevention debts. Kathmandu has policies and by engaging with vulnerable workers practices in place to ensure that we in hard-to-reach places. do not allow forced labour in any of our production facilities. The OBOZ legislation requires companies with more than $80 million in revenue to With the acquisition of Oboz footwear, submit an annual report showing the Kathmandu will add Vietnamese work they are doing to insure there is footwear factories to its list of no forced labour in suppliers. These will be transitioned their supply chain. “All companies into the Kathmandu corporate social have a role to play,” Gary says. responsibility programme in the second half of 2018. “We’ll be learning from the good work that Oboz has done in CSR and looking forward to aligning best practices across our brands,” says Gary. “All companies have a role to play in making sure there is no forced labour.” GARY SHAW CORPORATE SOCIAL Workers in Shanghai sewing RESPONSIBILITY MANAGER the women’s hooded pullover.
28 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 29 “Change comes from an understanding between two humans.” MANU RASTOGI RESPONSIBLE MATERIALS MANAGER Products. Our Summit Club member Ben on location in Kaikoura.
30 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 31 Combining forces for better material choices. Wool or polypropylene? Down or pollution. Centralising all of this into END OF LIFE synthetic? Hemp or cotton? one index means that everyone is The Higg MSI measures impacts up to Consumers are asked to make these using the same process to arrive at an finished materials, but of course that choices every day. We all want to do impact score. Without this, it would is only about halfway through the the right thing, but the answer is be impossible to make comparisons. lifecycle of a garment. Turning rarely clear. The Higg MSI is constantly being finished material into a product that One tool that we use at Kathmandu improved as more data feeds in. adapts to your needs and lasts a is the Higg Materials Sustainability You might be surprised at some of lifetime is our job. After that, it’s over Index (Higg MSI). This online database the results. to our customers to put our products is available to anyone at msi.higg.org. to good use and to manage the It has been developed by the impacts of washing and disposal, so, SURPRISING IMPACTS Sustainable Apparel Coalition (SAC), we’re also building resources to guide a group of businesses from the We tend to think of cotton as good customers on the best ways to care apparel, footwear and textile because it’s a natural material and for our products along with easier industry who have come together polyester as bad because it’s made ways to send products back for repair. to make it easier for the industry to from petrochemicals. But the Higg The journey continues. It’s exciting measure and reduce impacts. MSI rates the impact of polypro at to see solutions emerging and to 39 and the impact of conventional know that together we can make cotton at 98 (a lower score equals LEARNING TOGETHER a difference. lower impact). But the story doesn’t SAC’s framework for this is called end there. Diving into the cotton For our full list of priority of preferred the Higg Index. It’s an online self- impacts, you can see that growing materials, visit assessment tool that lets companies the cotton makes up the bulk of the www.kathmandu.co.nz/corporate- measure their impacts across the impact, contributing a whopping 66 responsibility/responsible-materials. entire business and see how they’re points. Choosing a more sustainable doing compared to other companies. raw material source reduces the impact dramatically. If a designer can The Higg Index is an unprecedented industry collaboration. It’s a resource swap conventional cotton for recycled We tend to think Recycled cotton cotton, they can reduce the material that no single company could ever have hoped to build on its own. source impacts to almost zero and of cotton as good has a lower cut out the dying process completely, because it’s a environmental 98 By doing all the heavy lifting, bringing the impact score down to calculations and assessments in the background, brands are just 27 points. natural material impact on the empowered to make better choices. Simple? Not exactly. But it’s a and polyester planet than 39 27 valuable tool for our teams to make The Higg MSI collects data from the industry, for the industry. informed decisions based on very as bad because other materials, detailed assessments of the impacts. The SAC uses the data to conduct it’s made from bringing the environmental assessments from “It’s not perfect,” says Group raw production through to finishing. Product Operations Manager petrochemicals. impact score This produces a measure of how a material impacts on things like Tara Strangwick, “but all the world’s heavyweights have got a better down to just climate change, water scarcity and chance if they’re working together.” 27 points. CONVENTIONAL POLYPRO RECYCLED COTTON COTTON
32 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 33 Number two in the world for materials...again. “This really The Textile Exchange ranked us second out of 19 global outdoor 2.16 million 100 watt lightbulbs for a year and the CO2 equivalent of validates that brands for our use of sustainable 289 Boeing 747s flying from London materials for the second year in a row. to Delhi. our approach The Textile Exchange is an industry In the outdoor and sports category, to materials is platform where brands can we maintained our overall position as collaborate on industry challenges. #2, while the field grew from 14 to 19 correct.” Its aim is to support companies brands. Our total score improved from to transition away from conventional 64.3/100 to 73.85/100. TARA STRANGWICK fibres and materials to ‘preferred’ Responsible Materials Manager Manu GROUP PRODUCT fibres and materials – or those Rastogi says, “The improvement was OPERATIONS MANAGER with less impacts. primarily because of our commitment to using 100% preferred man-made TRACKING PROGRESS cellulosics and because of our uptake of recycled cotton.” The Textile Exchange’s Preferred Fiber and Materials Market Report tracks the progress of the textile industry FUTURE IMPROVEMENTS in its mission to accelerate Manu says moving into the top sustainable practices. spot might be possible with the The 2017 report included 97 apparel introduction of Responsible Wool 2 brands. Preferred cotton and Standard (RWS) products, more GLOBAL SCOREBOARD preferred down were the top recycled fibres and bio-based performers in the overall index materials as well as closing in on while the report cited room for the goal to reach 100% sustainable improvement amongst recycled cotton. fibres and man-made cellulose. “This recognition is huge for us,” # says Group Product Operations WORLD RANKING IN THE TEXTILE EXCHANGE PREFERRED MATERIALS MAKE A DIFFERENCE Manager Tara Strangwick. “The Textile MATERIALS REPORT Exchange is the most recognised By choosing preferred materials, the industry body, and the rankings are 6 industry has saved enough to meet 10 very detailed.” the needs of everyone on Earth for 13 days, enough energy to power # by Volume on the Preferred Down Leaderboard # BY VOLUME ON THE #5 RECYCLED COTTON LEADERBOARD by Growth on the Preferred Down Leaderboard 9 100% INCLUDED IN THE 100% CLUB ON THE PREFERRED DOWN # LEADERBOARD & THE PREFERRED ON THE RACE-TO-THE- MAN-MADE CELLULOSICS TOP LEADERBOARD FOR LEADERBOARD PREFERRED COTTON
34 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 35 Manufacturer gives Kathmandu the All-In Award. We thought we had big ambitions China in March 2018 to learn more Microfibre research ramps for recycling plastic bottles into about how the plastic bottles are up with new study. garments – starting with a 1 million transformed into fibre. Last year, the impact of microfibres bottle goal in 2016 and growing to exploded into public consciousness. “It’s not a fancy process,” Manu says. a 7.5 million target for 2019. But Tiny particles from our clothes are “They use a mechanical grinder to REPREVE, who makes most of the escaping from washing machines and break down the bottles into plastic recycled polyester in our range, are into waterways where the chemicals chips. This means there are less aiming for 30 billion bottles by 2022 in those fibres are consumed by fish chemicals in the process.” (current count is around 12 billion). life and eventually even make it back Manu also likes the traceability of into our food chain. REPREVE. “All recycled fibres are not INSPIRING DESIGNERS alike. REPREVE uses a standard that NATURAL FIBRES REPREVE has created the Champions means we can trace the material to ALSO CONTRIBUTE of Sustainability Award to inspire make sure it comes from post- designers and consumers to choose consumer waste. REPREVE makes it The focus has been on polyester sustainable fabrics and ultimately easy for us to keep track of how many fibres, which are essentially tiny pieces help solve the problem of plastic bottles we are recycling in our ranges, of plastic. But a closer look at the bottles ending up in the landfill, or which also helps us to keep improving.” data shows that natural fibres are worse, in the oceans. also heavily treated with chemicals and can in some cases be even worse. At the 2018 awards, Kathmandu THE UNCOUNTED BOTTLES was recognised with the All-In Award To create solutions, we need to The Kathmandu recycled polyester for integrating REPREVE extensively understand the issue more clearly. bottle count only includes numbers into product lines from the start. We’ve undertaken a study to quantify that have been verified by REPREVE, Kathmandu’s impact and set a REPREVE is now used in 71 products in but the range includes lots of other baseline. The research is being carried the Kathmandu range, bringing this recycled polyester too. “We only claim out by fabric technologist Georgia year’s bottle count to 6.7 million. bottle counts where we can back Tangney as part of her postgraduate those numbers up 100%, every time, research with the University of Otago. with traceable documentation. LEARNING MORE I think if we converted all our recycled The study is looking at how many Responsible Materials Manager Manu plastic use, the number would be microfibres are generated by Rastogi visited the REPREVE plant in closer to 20 million,” Manu says. Kathmandu products (including fleece) and what the impact of those fibres might be. It’s also 7.5 looking at solutions – measuring 2019 GOAL the effectiveness of the Guppy Friend MILLION microfibre filter, which is available in Our plastic bottle Kathmandu stores. 6.7 2018 recycling journey MILLION UNANSWERED QUESTIONS 3.9 “There are lots of questions 2017 about microfibres that are still MILLION unanswered. This study will help 1.2 2016 us understand the issue as it applies specifically to us so we can look for MILLION The Cotinga Backpack is made ways to manage it,” says Responsible with REPREVE fabric and recycles 17 plastic bottles. Materials Manager Manu Rastogi.
36 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 37 We’re on track for our sustainable cotton goal. Sustainable Because we’re narrowing in on our WORKING WITH SUPPLIERS target fast, it wasn’t a huge leap cotton breakdown when we joined the Sustainable These changes require suppliers to come on board. Cotton Communique. Driven by Prince Charles, as part of the “One example is our sleeping bag Prince of Wales International stuff sacks. These are made from Sustainability Unit, the 80% polyester and 20% cotton. communique asks brands to All up, this represented just 0.13% commit to using only sustainable of the cotton we use, but to get it 78 % cotton by 2025. Kathmandu is one across the line we had to engage of 36 brands to sign up so far. with the supplier, educate them about why this is important to us, introduce them to the BCI, and GETTING THERE have all the discussions about This year, we increased from 74% quality and cost that go along to 78% sustainable cotton. A mix with any changes. of recycled cotton, Better Cotton “At the end of the day, the change Initiative (BCI) cotton and organic comes from a face-to-face cotton will get us there. conversation and an Responsible Materials Manager understanding between two Manu Rastogi says the final push humans. It’s never as simple as 53 % BCI 15 % Organic to 100% is the most difficult. “This is the long tail that is hardest just swapping out the fabric, but hopefully the process helps to get across the line. When you shift the needle for the industry 7 % Fairtrade 3 % Recycled have a glove or a sock with 5% as a whole.” 11.5 cotton or a big complex product like a child carrier with a bit of cotton, we have to find solutions for all these last little details to reach our goal.” 100% 2020 Our sustainable 78% MILLION 2018 cotton journey 74% bottles worth of fresh 2017 water saved in 2018* 59% 59% 2016 2014 The United Nations is calling for a “fundamental shift” in 38% the way water is managed. 2015 By using more recycled cotton and solution-dyed polyesters, we have been able to increase our water savings from 8.5 million bottles to 11.5 million bottles of water this year. Cotton harvesting at a Fairtrade cotton farm run by our supplier Pratibha Syntex in India. * based on 500ml bottles.
38 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 39 Design challenge delivers most sustainable range yet. This year, we launched the DESIGN TRANSFORMATION EarthColors Hoodie. It was a “The design process has been about challenge thrown down by our transforming an ordinary hoodie designers – what’s the most into a ground-breaking garment. sustainable hoodie we can make? Every detail has been questioned,” The starting point was the says Keb. “From eyelets to trims to EarthColors dye, a natural organic packaging – we just keep asking dye made by global dye house ourselves how can we make these Archroma from agricultural waste. more sustainable?” The inedible parts of nuts, fruits and The trim is a blend of BCI cotton and seeds are used to create a REPREVE recycled polyester. The logo sustainable non-petroleum dye print has been done using a low- alternative. impact dye. TRACEABLE DYES JUST THE START Apparel designer Keb Brabazon says, The EarthColors Hoodie was the start “I love the fact that, “I love the fact that, with EarthColors, you can trace it all the way back to of our garment dyeing programme. This year, the design team will look with EarthColors, you the land and that there is a face to for more opportunities to incorporate the people making this stuff. By can trace it all the way investing in these new technologies, these sustainable materials and processes into the range. A range back to the land...” we help build capacity so that eventually we can incorporate these of shirts, pants and tees will be launched later this year. things into all of our products.” But KEB BRABAZON Kathmandu team member Jacinta the design team didn’t stop there. wearing the latest EarthColor range APPAREL DESIGNER on location in Sapa, Vietnam. Bio-based synthetics Biosynthetics are made from critical to building a more sustainable Kathmandu Responsible Materials The EarthColors Hoodie released by natural, renewable resources. industry. Unlike petrochemical-based Manager Manu Rastogi is part of Kathmandu in 2017 is an example will help meet growing These could be crops like corn or fibres, biosynthetics can even mitigate the working group. “The lifecycle of a second-generation biosynthetic. global textile demand. sugarcane, waste from agriculture climate change by absorbing CO2 analysis tells us that the first Agricultural waste replaced fossil-fuel As part of our work helping to or forestry industries or non-food during the growth phase. generation biosynthetics, which based dyes. push the industry needle on sources like fungi and bacteria. come from crops, compete with the The working group is pulling together sustainability with the Textile food industry. We need to work on With the global demand for textiles metrics and lifecycle data so that Exchange, Kathmandu has joined more alternatives in the second and expected to more than double by impacts can be quantified and the biosynthetic working group. third generation that are from 2050, these emerging fibres will be compared. waste and non-food sources.”
40 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 41 Synthetic down jacket takes home Gold Award. We’ll always argue that there’s no “This is our first true down alternative,” substitute for down when it comes says Responsible Materials Manager to performance. That’s why we’ve Manu Rastogi. “It’s a great alternative worked hard to make sure 100% of for people who don’t want to buy our down is certified by the animal products.” Responsible Down Standard. But Manu says that, on performance There will always be a place for down, and sustainability scores, down still but that doesn’t stop us from looking wins. at alternatives. ThermoPlume by “The Higgs Materials Sustainability PrimaLoft is the first down-like Index looks at the overall synthetic that has passed our sustainability of a huge list of standards for performance and materials according to a lifecycle production. It is easy to wash, analysis. Down rates number two. I fast to dry and keeps you warm am a vegetarian myself, but as long even when wet. as people in China are eating geese We used ThermoPlume in our and ducks, down will be an extremely Lawrence travel jacket, which sustainable by product of that won a Gold Award at the ISPO industry.” outdoor product fair. “This is the first true down alternative for people who don’t want to buy animal products.” MANU RASTOGI Summit Club member Hannah wearing the Lawrence Jacket on RESPONSIBLE location in Wanaka, New Zealand. MATERIALS MANAGER
42 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 43 Designing with a Keeping an sustainability lens. eye on quality. Kathmandu designers are using a tool from the Sustainable Apparel DDM this year as a trial and we will introduce more products To make products with less impact, they need to last. To make sure our New Zealand and Australia is not the answer to improve manufacturing “We make products Coalition (SAC) to score and and designers next year.” products meet quality standards, quality. To that end, we are working for activities of improve the sustainability of we carry out planned inspections on creating and rolling out a products at the design stage. Darren says the Higg DDM helps designers stop and consider impacts on high-risk products when they reach Quality Excellence programme to consequence, The Higg Index is a self-assessment early on. “It’s resetting the way you our distribution centres. Reactive quality inspections are done when a better manage product quality at the point of manufacture. As well and we need to tool that is used throughout design. You have to ask, if I choose Kathmandu to measure sustainability this product or this trim, what impact team member or a customer raises as reactive inspections, Kathmandu ensure that our a concern about a product. When has also been working with a third- and benchmark performance against others in the industry. am I going to have?” the team receives negative feedback, party inspection company to verify gear meets and IT’S IN OUR DNA they investigate the root cause of the issue and consider the impact on the product quality for high-risk products prior to shipment. exceeds customer RIGHT DOWN TO THE TRIMS Sustainability is part of Kathmandu’s customer. “We can only improve product quality expectations.” Designers use the Higg Design product design DNA. “Whenever a “We make products for activities of by working with our manufacturing Development Module (Higg DDM) to designer is starting a new concept, consequence, and we need to ensure partners at a factory level so that TARA STRANGWICK score a product by rating the sustainability of the materials – right down to trims and tiny details. Once scored, a product can be they have to look at the four design philosophies: original, engineered, adaptive, sustainable,” Darren says. 45k that our gear meets and exceeds customer expectations” says Group Product Operations Manager Tara Strangwick. But performing they are fully aligned with our inspection and quality standards,” Tara says. “We look forward to sharing more about this programme GROUP PRODUCT OPERATIONS MANAGER benchmarked against He makes the point that sustainability cannot override “Durability inspections at distribution centres in as it unfolds.” other Kathmandu products and those of competitors, challenging designers performance. “Durability is key to sustainability. I think a lot of is key to to continually look for ways to improve the sustainability score. consumers are pushing back from the sustainability.” whole concept of fast fashion and the “It brings in a sense of competition throwaway culture. We are offering an DARREN BARRY for our designers – looking at how to alternative as a stylish technical KATHMANDU beat their score,” says Kathmandu outdoor brand with strong HEAD OF DESIGN Head of Design Darren Barry. “Two sustainability principles.” designers have gone through the Higg CARE AND REPAIR Customer health and safety. Our customers rely on us to keep The customer received professional them safe in the outdoors. This is a medical attention and the retail big responsibility. This year, we have general manager worked through and two safety issues to report. A resolved the complaint with the customer reported frostbite when customer. 4907 0 270 wearing Kathmandu XT Fitzgerald In January, a power bank was Unisex NGX Alpine Mountaineering reported as exploding and catching Boots. The boots were being used in fire in a backpack at Melbourne conditions outside their intended use Airport. There were no injuries but it so the problem was more a problem REPAIRS Product Recalls Inspections was investigated and with the quality of advice given than a report forwarded to Melbourne the quality of the product. Airport Security.
44 SUSTAINABILITY REPORT 2018 OUR PRODUCTS SUSTAINABILITY REPORT 2018 45 Responsible wool lands in store. Next January, Kathmandu will be the first brand in the southern have been looked after right through the supply chain. The RWS “That’s how we hemisphere to have Responsible prohibits the practice of mulesing, change the status Wool Standard (RWS) products on where strips are cut from the the shelf. sheep’s rear. This is still common in quo and make This comes after years of working Australia but has been phased out in New Zealand. sustainability stick.” with farmers and others in the supply chain to convince them of “We’ve finally done it,” says MANU RASTOGI the value of the programme. Responsible Materials Manager Manu Rastogi. “It happened by RESPONSIBLE The RWS is an animal welfare and MATERIALS MANAGER engaging deeply with farmers and land management standard supply chain partners, helping developed by the industry under them understand the vision and the Textile Exchange umbrella. Like helping to make it their vision too. the Responsible Down Standard, That’s how we change the status the RWS aims to create a quo and make sustainability stick.” traceable certification programme that ensures animals and land Tiber ngx hiking boots are made with leather from tanneries that are certified by the Leather Working Group. FUR-FREE FIRST FOR LEATHER WORKING GROUP SOUTHERN HEMISPHERE Kathmandu has become the first This year, we signed up to the Leather “Leather is a bit like down. It’s OK to retailer in the southern hemisphere Working Group, a consortium of use as long as we address the issues. to join the Four Paws Global Fur-Free around 400 brands who are focusing Just like down, leather is a byproduct Retailer programme. on environmental impacts at the of the meat industry so as long as we tannery level. manage the chemical and water use Four Paws is an international animal and can trace the source, it can be protection group that opposes the Kathmandu uses leather in footwear pretty sustainable.” fur industry’s treatment of animals. only. Responsible Materials Manager First 2019 The group says the global fur trade Manu Rastogi visited tanneries this products sources 95% of its fur from animals year to seek answers to some of his in store forced to live in small wire cages. questions. Already, 100% of Our responsible RWS launched and leather used in 2016 Now running in more than 20 “Tanneries use huge amounts of Kathmandu became wool journey part of the industry countries, Fur-Free Retailer includes water, chemicals and waste. Only Kathmandu footwear more than 880 major labels. 20–25% of an animal skin (based working group comes from tanneries on weight) is turned into leather, “Caring for the welfare of animals is so I wanted to know where the rest important to Kathmandu because it is goes. I also wanted to know more that are certified gold important to our customers, our team members and our shareholders. We about what chemicals are used and or silver by the Leather what happens to those chemicals. are proud to be considered a leader in I’m also interested in the traceability Working Group. this space and encourage other of the leather. Do they know where retailers to join and make the pledge it has come from?” says Manu. to eliminate animal fur in any of their products,” says Ben Ryan, Kathmandu General Manager of Product.
46 SUSTAINABILITY REPORT 2018 OUR FOOTPRINT SUSTAINABILITY REPORT 2018 47 Footprint. Our “Carbon credits give us a land purchase fund. That means regenerating forest and more carbon being fixed.” HUGH WILSON Hugh Wilson uses carbon credit BOTANIST AND HINEWAI funds to restore native forest on RESERVE MANAGER Banks Peninsula.
48 SUSTAINABILITY REPORT 2018 OUR FOOTPRINT SUSTAINABILITY REPORT 2018 49 Smart reductions make sense to the bottom line. Our environmental footprint is a way This year, we took steps in both of to measure our impact on our planet. these areas, having our carbon Only when armed with an accurate accounting system certified by a third measure can we take meaningful party and increasing the percentage steps towards reducing our footprint. of our waste diverted from landfills. Carbon and waste are our biggest impacts as a business. We are guided DOUBLE BOTTOM LINE by the United Nations Sustainable The good news is that both of Development Goals as we look for these are driven not just by those ways to be part of a shift towards looking after our environmental a more circular economy. impact but also by those looking after the bottom line. PRODUCTION AND CONSUMPTION “Using and managing resources Goal 12 is all about sustainable responsibly like recycling and reducing consumption and production patterns. energy consumption is a bit like good This means using resources more housekeeping,” says Chief Operating efficiently and minimising waste. and Financial Officer Reuben Casey. “This is something we can all contribute to.” “Recycling and reducing energy consumption is a bit like good housekeeping.” REUBEN CASEY Kathmandu’s Christchurch support office is one of three 5 Green Star rated CHIEF OPERATING & FINANCIAL OFFICER buildings the company operates.
50 SUSTAINABILITY REPORT 2018 OUR FOOTPRINT SUSTAINABILITY REPORT 2018 51 Over 15 tonnes of soft plastics now being recycled each year. The Ellen MacArthur Foundation “A key learning was that clear plastic We did look at eliminating polybags estimates that 98% of plastics being was our biggest waste to landfill completely, but nothing else does as produced today come from virgin issue,” Oliver says. “88% of our stores good a job at getting product to plastic. This is because most plastic is are recycling their clear plastics now.” store undamaged. We figured out not recycled and a worrying amount that damaged stock would have Another challenge is landlords is either sent to landfills (40%) or into more impact on waste than who control recycling in many of the environment (32%). recyclable polybags. the shopping centres where our A few years ago, in our eagerness stores operate. to run a more sustainable business, “I’m really proud that this year we we set an ambitious zero waste goal. recycled 100% of plastic polybags “I’m really proud LEARNING FIRST from stores in New Zealand. All up, we have saved 15 tonnes of soft that this year we “When we set the target, we didn’t plastics from landfill,” Oliver says. recycled 100% of even know what waste we were producing,” says Kathmandu CREATIVE SOLUTIONS plastic polybags Sustainability Specialist Oliver Milliner. To achieve this, we employed some across stores in Store waste “We hadn’t done any waste audits.” Aspirational goals help us achieve new solutions. “We were down to just five stores where recycling was not New Zealand.” breakdown aspirational results. We started available, so we got the stores to with audits that helped us package up all their polybags and OLIVER MILLINER understand where our waste send them to stores in larger centres KATHMANDU comes from. We created waste where they could be recycled.” SUSTAINABILITY SPECIALIST scorecards for each store so we can see exactly what is recycled. Our overall 80 % 2018 recycling rate 98 % Paper/ Cardboard 50 % Paper/ Cardboard 88 %P olybags and shrink wrap 72 % 30 % Polybags and 2017 69 % shrink wrap 2016 27 % Co-mingled recycling 10 % Co-mingled recycling 10 Sustainability Specialist Oliver Milliner, left, talks to Hugh MacEwan of Waste Management at the % Non-recycled recycling transfer station in Christchurch. material
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