Sustainability Report 2019 - KATHMANDU HOLDINGS LIMITED
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KATHMANDU HOLDINGS LIMITED Sustainability Report 2019
SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 1
Inspiring
adventure is
what inspires us.
The people who make up
Kathmandu are travellers and
adventurers from all over the globe.
From our beautiful, untamed home
New Zealand, we go out into the
world with a purpose at heart.
Whakaoho te Manurau I in sustainable product
roto ia tatou development and doing
To inspire and equip the business ethically. We’re
adventurer in all of us. focused on minimising
environmental impact, and
Since 1987, we’ve been look to contribute to the
engineering gear to equip wider community.
adventurers around the world We believe we have
in their quest to discover. an opportunity, and
Our passion is to inspire responsibility,
everyone to feel the thrill of to help create a better world.
travel and adventure.
Nothing enriches us like Na tatou – nga kaitiaki
exploring our planet, which is o te Ao
why caring for it is at our We need to care for this
Southern Alps / Ka Tiritiri o te Moana – South Island, New Zealand core. We strongly believe world together
2 SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 3
Our top 5
sustainability BECAME A CERTIFIED B CORP,
MEETING THE HIGHEST VERIFIED
highlights. STANDARDS OF SOCIAL AND
ENVIRONMENTAL PERFORMANCE
At Kathmandu, sustainability isn’t
a department, it’s a way of doing SCORED AN ‘A’ IN THE
A ETHICAL FASHION REPORT
things. Here are some of our TWO YEARS RUNNING
highlights from this year.
RANKED SECOND IN THE
TEXTILE EXCHANGE REPORT
2 THREE YEARS RUNNING
LAUNCHED OUR NEW
‘BEST FOR THE WORLD’
FIVE YEAR SUSTAINABILITY PLAN
RECYCLED 9.3 MILLION
PLASTIC BOTTLES INTO
OUR GEAR
4 SUSTAINABILITY REPORT 2019 INTRODUCTION SUSTAINABILITY REPORT 2019 5
Contents. Chairman’s and
CEO’s report.
6 Ta matou korero – Our Stories
Kathmandu becomes a certified B Corp. Our fight against modern slavery.
And a campaign to encourage helpful travellers.
Our biggest news in sustainability
this year is the announcement that
12 Ta matou rerenga – Our Journey Kathmandu has become the
largest company in Australia and
An in-depth review of our strategy has led to an ambitious
New Zealand to join the B Corp
new five-year plan.
movement.
Certified B Corporations commit to
using business as a force for good
to create a more sustainable and
22 Nga kaiwhakarato – Our Suppliers inclusive economy.
Moving beyond compliance to improving the lives of workers in
The certification measures
our supply chain.
performance in five categories:
governance, workers, customers,
DAVID KIRK XAVIER SIMONET community and the environment.
CHAIRMAN CHIEF EXECUTIVE OFFICER
Sustainability has always been part
32 Nga hua – Our Products of the Kathmandu DNA, and this
A move towards more recycled materials and fibres from renewable milestone reflects the hard work
resources sets up the future. our teams have done over the years
to improve the lives of people in our
supply chain and our community
and the efforts we’ve made to
lessen our impact on the planet.
46 Ta matou tapuwae – Our Footprint
This year, we released a five-year
We set a goal to have net zero environmental harm from our business
sustainability plan that pushes our
operations by 2025.
efforts in all these areas even
further. It includes our new social
impact statement to positively
impact the lives of 100,000 people
54 Ta matou hapori – Our Community through adventure and education.
A new social impact statement aims to empower our community to The plan also challenges us to
positively change the lives of 100,000 people in the next five years. integrate the principles of circular
economy throughout our business.
It’s all part of our mission to inspire
and equip the adventurer in all of us.
64 Ta matou ranga – Our Team
A focus on diversity has led to a rainbow network and new roles
for people with disabilities.
6 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 7
Business as a force
for good.
Kathmandu has become the largest In the B Corp certification,
certified B Corporation (B Corp) in Kathmandu was awarded high scores
Australia and New Zealand. in the workers, environment and
community sections. These scores
We are proud to be the first publicly
reflect the work we’ve done in
listed certified B Corp in New Zealand
preferred fibres and materials as well
and the first outdoor apparel and
as protecting the rights of employees
equipment retailer in Australia and
in our supply chain.
New Zealand to become one.
Kathmandu is part of a global ethical Globally, there are more than 3,000
business movement driving a more companies that have become
sustainable and inclusive economy. certified B Corps after completing the
certification process. There are nearly
By harnessing the power of business,
300 certified B Corps in Australia and
B Corps aim to use profits as a means
New Zealand, making it the fastest
to positive impacts for their
growing region per capita.
employees, communities and the
environment. “Kathmandu’s announcement as New
Zealand’s first B Corp-certified
B Corp is an initiative from B Lab, a
multinational retail business and
global non-profit movement of people
Australasia’s biggest B Corp is a
using business as a force for good.
significant milestone for Australia,
The B Corp assessment process
New Zealand and the wider B Corp
measures a company’s performance
movement,” says B Lab Australia &
in five categories: governance,
New Zealand CEO Andrew Davies.
workers, customers, community and
the environment. “Certification is open to all sizes of
business, and we are seeing increasing
“The B Corp certification is a milestone
interest from large corporations
achievement for the company and
across the world Kathmandu’s
reflects Kathmandu’s exceptional
certification sends an important
record in sustainability leadership,
signal for other big businesses to
which has been fundamental to our
follow in their lead.”
success,” says Kathmandu CEO Xavier
Simonet.
“Sustainability is part of Kathmandu’s
Kathmandu meets the
DNA and is integral to our entire
operation, from our supply chain to highest standards of
positive social and
our materials and products and our
operational footprint.”
environmental impact
8 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 9
Slavery is not history.
Did you know that there are more
people in slavery now than at any
opportunity for businesses to make a
dent in this problem,” Gary says.
75% of modern
other time in human history?1 It’s
Gary has seen modern slavery and slaves are hiding
estimated that 40.3 million people are
trapped or working against their will.2
human trafficking firsthand. For eight
years, he worked as a human rights
in global supply
As a criminal industry, the global investigator, going undercover in 13 chains.
profits from human trafficking are countries to help rescue enslaved
second only to the drug trade.3 Human people and facilitate the prosecution
trafficking accounts for approximately of the perpetrators. For Kathmandu, this meant ensuring
25% of modern slavery.1 our supply chain was transparent
“Right now, less than 2% of people in
and that our workers had a voice. We
The other 75% of modern slaves are slavery are liberated and their
worked in partnership with our
hiding in global supply chains.1 This is perpetrators held accountable.3 This
suppliers and in collaboration with
often in the form of debt bondage or rate shows that governments and
other brands to proactively address
debt slavery. This is when a person is NGOs working on this problem are not
such risks.
forced to work to pay off a debt. It going to address this issue without
might start when a mother seeks a the help of the private sector. The At the heart of the Kathmandu
loan to provide resources for her Australian Modern Slavery Act creates approach to human rights in the
children and then finds her entire the opportunity for collaboration supply chain is the brand statement –
family forced into labour for the ever- between businesses, governments to inspire and equip the adventurer in
increasing loan. Attempts to escape and NGOs.” all of us.
are often met with violence.
Gary says the Act will mean all large “That includes the people who make
The solution requires action from businesses will have to become more our gear and to inspire adventure
governments, NGOs and businesses. aware of the risks. presupposes that you have the
freedom to adventure in the first place.”
The 2018 Global Slavery Index found “Initially, it might be confronting for
36 countries were taking steps to some businesses who have just
investigate forced labour in business assumed that their supply chain is
or public supply chains, up from just free of slavery. A lot of people assume
four countries in 2016. that slavery ended in the 1800s. When
they start to look, they might be
Australia was one of them. The
surprised to find that their supply
Modern Slavery Act was passed by
chain includes high-risk industries or
the Australian Government in
product lines that cause, contribute or
October 2018.
are directly linked to modern slavery.”
From 1 July 2019, every company with
Gary is hopeful about the response that
revenues of AU$100 million or more
will come from more open reporting.
are required to track the risks in their
supply chains. From 1 July 2020, “The aim is not to say that you don’t
1. The Mekong Club, Oct. 2019, themekongclub.
these companies will be required to have slavery in your supply chain. The org
report their risks and what they are legislation is encouraging companies
2. International Labour Organization and Walk
doing about it. to report where they identify those
Free Foundation. Global Estimates of Modern
risks so that they can be addressed,” Slavery: Forced Labour and Forced Marriage,
Kathmandu Corporate Social
Gary says. “Allowing businesses to 2017, pp. 1–68. https://www.ilo.org/wcmsp5/
Response-ability Manager Gary Shaw
discuss slavery risks in the open groups/public/---dgreports/---dcomm/
says the legislation is a big step documents/publication/wcms_575479.pdf
without fear of shame or criticism will
forward for reducing slavery.
allow for the collaboration necessary 3. United States Department of State.
“With 75% of modern slavery to shut it down.” Trafficking in Persons Report. US Department of
happening in the global supply chains State Publication Office, June 2017, pp. 1-454
https://www.state.gov/wp-content/
of businesses, there is a huge A worker at one of our supplier factories
uploads/2019/02/271339.pdf outside of Ho Chi Minh City, Vietnam.
10 SUSTAINABILITY REPORT 2019 OUR STORIES SUSTAINABILITY REPORT 2019 11
“We felt we had a
responsibility to Helpful or harmful.
help people think
more deeply about
their impact.” Travel and tourism is a US$8 trillion
industry and the largest employer on
harmful effects of tourism and provides
education about how individual
issues in the three-part documentary
series. The films explored the impacts
Earth. But as Elizabeth Becker writes travellers can be more helpful in the of tourism in Bali, Nepal and Australia.
PAUL STERN in Overbooked, “Travel and tourism choices they make when travelling.
Kathmandu General Manager
has become a behemoth, capable of
GENERAL MANAGER The report looks at a problem called Marketing and Online Paul Stern says
doing great good and great damage.”
MARKETING AND ONLINE “tourism leakage”. This is when the series and report were designed to
As part of our World Ready brand companies in developed nations take educate customers and the public on
proposition last year, we decided to more profit from travellers than the how to have a more positive impact.
take some responsibility to educate less-developed destinations, which
“It’s part of our purpose to inspire
travellers and address some of the still have to absorb the costs.
people to go travelling, but we felt we
impacts of travel.
The report found that, on average, for also had a responsibility to help
Helpful or Harmful is a report and every US$100 spent by a tourist from people think a bit more deeply about
documentary series commissioned by a developed country, only US$5 stays their impact.”
Kathmandu and released last year. in the developing destination
This content reached millions of
country’s economy.
Research commissioned by people. It sparked discussion on social
Kathmandu found a third of Aussies Tourism can also be harmful when it media – with many people grateful to
and half of Kiwis think of themselves overloads infrastructure, damages learn more about how they could be
as the best travellers in the world, yet nature, alienates local residents or more helpful.
only 20% of us make an effort to spend threatens culture and heritage.
The second phase of this project will
our money to benefit local people.
These ideas were explored by launch this year to include markets
To help travellers match their actions investigative journalist Jan Fran, who beyond Australia and New Zealand.
with their intentions, the Helpful or travelled to three areas impacted by
Harmful report shines a light on tourism to shine a light on these
HARMFUL EFFECTS OF TOURISM
ALIENATED LOCAL DAMAGE TO OVERLOADED DEGRADED TOURIST THREATS TO
RESIDENTS NATURE INFRASTRUCTURE EXPERIENCE CULTURE & HERITAGE
WAYS TO BE HELPFUL
PURIFY YOUR OWN GET OFF THE LEARN SOME LOCAL CHOOSE LOCAL, OFFSET YOUR
WATER BEATEN TRACK LANGUAGE ETHICAL OPERATORS FLIGHTS
A local Nepalese man outside a waste
incinerator. Burning of waste surges in
Nepal during peak tourism seasons.
12 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 13
Ta matou
rerenga.
Our journey.
Nepalese expedition guide Chhiring
Sherpa takes a break while hiking in
Nepal.
14 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 15
We’re aiming to be best
SOCIAL IMPACT TEAM PRODUCTS FOOTPRINT
Empower our community All Kathmandu team 100% of products Net zero environmental
for the world.
to positively change members embody the designed, developed and harm from our business.
100,000 lives. company purpose and manufactured using
values. elements of circularity ACTION POINTS
ACTION POINTS principles. Operate only zero-waste
Through collaboration, our ACTION POINTS facilities.
partners, suppliers and provide all team members ACTION POINTS
Set science-based targets
Summit Club members will access to programmes that Define our own unique
to combat climate change.
strive to: align with the company's circularity principles.
purpose. Operate with a net zero
·
improve the standard
carbon footprint.
of living and working Rank in the top quartile
of high performance for Have 100% sustainable
“Our new Four years ago, the United Nations
released a roadmap for ending
After a comprehensive review of our
current practices and strategies, Brian
conditions for 50,000
workers in our supply employee engagement. packaging materials by
sustainability poverty, fighting injustice and tackling and Mary’s report showed that, chain
be a leader in diversity and
2025.
climate change by 2030. The although we are a leader in Australasia
action plan is not Sustainable Development Goals and we stack up with global leaders
· provide 30,000 Nepalese
people with access to
inclusion.
about Kathmandu address the most pressing challenges
of our time, including climate change,
on material choices and human rights,
we still have room to improve
quality education
being the Best in resource depletion, poverty and social compared to global competitors in · give 10,000 Summit
Club members access
justice – aiming to help everyone from some areas – particularly around our
the World. It’s governments and businesses to environmental footprint, governance to volunteering and SDG SDG SDG
outdoor adventure
focused on citizens to transform our world by
stimulating actions that benefit
and social impact.
The report strongly advised · provide 10,000
making the best people and the planet.
Kathmandu to invest in these areas. disadvantaged youth
decisions for the These 17 global goals have defined
the agenda for good business –
Both Brian and Mary emphasise one
with outdoor education
· proactively address
world.” because all businesses will benefit
thing. “Our vision for Kathmandu is
to be a bright, shining voice of modern slavery within
from more resilient communities, our industry
human rights coming out of the SUPPLIERS GOVERNANCE CIRCULAR
reliable access to natural resources
OLIVIA BARCLAY southern hemisphere – and they can · enhance worker
and a healthy population.
do it at home as well as around the wellbeing through All direct suppliers across Become a leading global Integrate circular
BRAND MANAGER Although we’re proud of the work world. They can do it with that our business meet our
mindset transformation B Corp using our business economy principles
we’ve done already, we know that Kathmandu spirit of adventure and training. minimum expectations as a force for good. within the business.
doing our part for sustainable do it in an active way. There is a real on their social and
development will require us to keep opportunity for Kathmandu to lead in environmental impacts. ACTION POINTS ACTION POINTS
trekking this path. Understanding the people space, generating truly Become a leading certified Establish recommerce and
where we are is the first step. positive social impacts.” ACTION POINTS B Corp with an impact rental business models that
Ensure all suppliers across score of >120. support and drive circular
This year, we brought in Drs Brian and
our entire business are economy solutions.
Mary Nattrass of Sustainability
subject to measuring and
Partners to review our sustainability
improving their social and
strategy and initiatives. Based in
environmental impact.
Canada, Brian and Mary are global
leaders in sustainability, having worked
with some of the world’s biggest
brands.
SDG
SDG SDG
16 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 17
A NEW FIVE-YEAR PLAN BEST FOR THE PLANET
BEST FOR THE WORLD
After a comprehensive review by
Kathmandu, we have created a
This pillar sees a big shift towards
circularity principles. The Ellen OUR 2025 SUSTAINABILITY GOALS
five-year plan – Best for the World. MacArthur Foundation describes the
three principles of a circular economy
This new plan takes the
as designing out waste and pollution,
recommendations from the
keeping products and materials in use
Sustainability Partners review and
groups them into three pillars: people,
and regenerating natural systems. For
Kathmandu, this means applying
INTEGRATE CIRCULAR ECONOMY
planet and practice.
these principles to the way our PRINCIPLES WITHIN OUR BUSINESS
products are designed, developed and
BEST FOR PEOPLE manufactured. Our goal is to have
100% of our products designed,
This pillar covers all the people in our
developed and manufactured using
network – from the 50,000 people in
our supply chain to our 2,000
elements of circularity principles.
BECOME A LEADING GLOBAL
employees as well as our customers
and our wider community. This year,
Our waste and carbon footprint are
another part of our impact on the
CERTIFIED B-CORP
we created our social impact planet. Our aspirational goal for 2025
statement that sums it all up. Our is to have zero environmental harm
2025 aspirational goal is to empower from our business operations. To get
our community to positively change there, we’ll need to become carbon
the lives of 100,000 people. We’ll zero, operate zero-waste facilities and 100% OF PRODUCT DESIGNED,
inspire and equip people to discover look at how we can remove waste
their potential through education, from our supply chains. DEVELOPED & MANUFACTURED
personal development and wellbeing.
USING CIRCULARITY PRINCIPLES
To achieve this goal, we’ll take action BEST FOR THE WORLD IN PRACTICE
over the next five years to improve the
In this pillar, we focus on governance
standard of living and working
and widening the circular economy
conditions for people in our supply
principles to the whole business. This
chain. We’ll help our partners provide
30,000 Nepalese people with access
year, as part of our goal to use our NET ZERO ENVIRONMENTAL HARM
to high-quality education. We’ll give
business as a force for good, we
became a certified B Corp. This
FROM OUR BUSINESS
10,000 Summit Club members access
means Kathmandu meets the highest
to outdoor adventure and volunteering
verified standards of positive social
opportunities with free events.
and environmental impact. Our five-
For our team, we are aiming for 100% year goal is to become a leading B
of team members to embody the Corp by lifting our assessment score EMPOWER OUR COMMUNITY TO
company purpose and values. That from 83 points to more than 120.
means we will be a leader in diversity
The executive team and wider
POSITIVELY CHANGE 100,000 LIVES
and inclusion and will rank in the top
leadership team will have training and
quartile for employee engagement. It
accountability for sustainability
will also mean staff have access to
performance. A sustainability
programmes that align with the
governance structure will provide clear
company’s purpose.
performance accountability for all of ALL KATHMANDU TEAM MEMBERS
our sustainability and community
impact strategies.
EMBODY THE COMPANY PURPOSE
For the whole organisation to shift to AND VALUES
circular principles, we’ll need to clearly
define what our own circularity
principles are across the organisation.
From there, we’ll be able to experiment
with internal business models that ALL SUPPLIERS MEET OUR MINIMUM
drive circular economy solutions. These
might be recommerce, repair or rental EXPECTATIONS ON THEIR SOCIAL
business models.
AND ENVIRONMENTAL IMPACTS18 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 19
A little B CORP TEXTILE EXCHANGE ENVIRO-MARK SOLUTIONS
help from
Certified B Corporations® Our membership with the Our membership with Enviro-
(B Corps™) are for-profit Textile Exchange supports Mark Solutions helps us to
companies that use the our materials strategy, and measure, manage and reduce
power of business to build a we also participate in their our carbon footprint.
our friends. more inclusive and
sustainable economy.
Preferred Fiber & Materials
Market Report.
Every explorer knows that a journey is better
with someone by your side. As we continue the OUTDOOR INDUSTRY CANOPY AUSTRALIAN PACKAGING
journey of sustainability, industry partnerships ASSOCIATION COVENANT ORGANISATION
provide important support – resources, We have been partners
information and frameworks. We participate in OIA’s with Canopy since 2016. We We submit an annual report to
Sustainability Working Group, work with them to use our the APC, which supports our
a collaborative platform of influence in our fabric packaging and waste strategy.
more than 300 outdoor brands supply chain to protect the
and suppliers working together world’s remaining ancient
to identify and implement and endangered forests
better business practices. and endangered species
habitat.
SUSTAINABLE APPAREL LEATHER WORKING GROUP AUSTRALIAN HIMALAYAN
COALITION FOUNDATION
Our work with the LWG helps
Membership of the SAC gives us to assess the environmental We have been partners with
us access to the Higg Index compliance and performance the AHF since 2011. We work
modules. We’ve been using capabilities of our tanneries with the AHF to support
the index since 2014, which and to promote sustainable communities in Nepal, the
supports our sustainability and appropriate environmental nation that inspired our brand.
strategy. The index guides us on business practices within the
the environmental and social leather industry.
impacts of our products and
how we can improve.
FAIR LABOR ASSOCIATION GREEN BUILDING COUNCIL HIMALAYAN TRUST
AUSTRALIA NEW ZEALAND
We became the first brand in
the southern hemisphere to Our membership with the We have partnered with the
achieve FLA accreditation. GBCA supports our green Himalayan Trust to further
This verifies that our social building programme. improve outcomes in education
compliance programme in our We also work in collaboration in remote rural Nepal.
supply chain exceeds the most with this organisation in
stringent global standards. trialling new projects.
“B Corps form a
community of leaders
BLUESIGN®
and drive a global CARBON DISCLOSURE
PROJECT
ELEVATE
Our bluesign® system Elevate Limited is our
movement of people partnership supports our We submit an annual chosen supply chain partner
using business as a chemicals management
programme, materials
report to the CDP, which
supports our carbon
and an industry leader in
sustainability, auditing and
force for good.” and products so that measurement and reduction improvement services.
they are environmentally programme.
and socially friendly.
B CORP COMMUNITY20 SUSTAINABILITY REPORT 2019 OUR JOURNEY SUSTAINABILITY REPORT 2019 21
KEY
Our world.
FACTORIES
101 TOTAL
China – 80
Vietnam – 11
Indonesia – 3
New Zealand – 3
Nepal – 1
Italy – 1
Spain – 1
Taiwan – 1
Iceland
Russia
MATERIALS SOURCING
Norway
Denmark
UK
Scotland
Germany
Lithuania
Ireland Poland Mongolia
Canada
Netherlands
Belgium
France Austria
OPER ATIONS
Switzerland
Macedonia China
New Zealand
Spain
Italy Greece 48 stores
USA South Korea Japan 1 distribution centre
Malta
Iraq 1 headquarters – Christchurch
Algeria Afghanistan Nepal
Egypt Australia
Mexico Thailand Taiwan
Pakistan Laos 119 stores
Yemen Hong Kong 1 distribution centre
Myanmar
Cambodia 1 headquarters – Melbourne
India Vietnam
Philippines
Ethiopia America
Nigeria Somalia Sri Lanka 1 headquarters – Bozeman
Malaysia
Indonesia
United Kingdom
Rwanda Kenya 1 store
Papua New Guinea
Peru Brazil Tanzania
Fiji Samoa
Zambia
Namibia
Chile
Australia COMMUNITY
South Africa
SPONSORSHIPS
Argentina 14 Adventure Sponsorship
winners travelled to
Mongolia, Namibia, Zambia,
New Zealand
Tanzania, Kenya, New Zealand,
Samoa, Papua New Guinea,
Nepal, Australia, Peru, Norway,
England, France
214 adventure sponsorship
recipients
49* NATIONALITIES
ACROSS OUR TEAM
*Estimated at the time of publication22 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 23
kaiwhakarato.
Nga
Our suppliers.
A worker at one of our supplier
factories outside of Ho Chi Minh
City, Vietnam.24 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 25
New social impact
TGI factory manager
Ms Nguyen Trang.
statement includes
workers.
“The aspiration Our new five-year sustainability
strategy focuses on people, planet
This year, we travelled to one of our
most progressive factories in Vietnam
is that we would and practice. We have included our to collect stories from the workers
50,000 supply chain workers in our about how this training is already
empower and social impact aspiration: to empower changing lives.
inspire our our community to positively change
100,000 lives. We’ll do this by
Corporate Social Response-ability
Manager Gary Shaw says, “At a
workers.” proactively addressing modern slavery
baseline, we want to ensure that the
in our industry, by working to improve
worst forms of modern slavery and
the standard of living and working
exploitation are eradicated. But that’s
GARY SHAW conditions for those people in our
just a baseline. The aspiration is that
CORPORATE SOCIAL supply chain and by enhancing worker
we would empower and inspire our
RESPONSE-ABILITY MANAGER wellbeing with education, training
workers to grow and flourish in the
and mindset transformation.
same way we want to ourselves.”
Mindset training helps
workers see new possibilities.
Vietnamese supplier TGI has Trang says the people who go through such sad circumstances. Instead of
implemented a mindset training the training are better employees and hiding in fear, we were inspired to be
programme for its employees. Factory tend to stay with the company longer. courageous and change together.
manager Ms Nguyen Trang says they
“We would like to improve the “After taking the course, I feel like, when
saw this programme being used in
education of the community. We there are difficulties, I can openly share.
another company with good results
want to see our employees develop I can now openly report to my
and implemented it at TGI in 2015.
their life with a transformed mindset supervisors to solve the obstacles and
The first round of training included so they will be happier in their job and not be afraid or hide things.
200 workers, and the second round in their family.”
“What we learned was powerful
included 500 workers.
My Le Thi is a worker who went because we could apply our new skills
Trang says she’s seen the changes through the training. “I discovered I and ways of interacting with others to
firsthand. “They can organise their had the ability to change my mindset our work but also in our daily life with
daily life better. They are more and overcome difficulties. There was a friends and family.”
confident in themselves and in their class where we wrote down each of
abilities. Before, when we offered the challenges we were facing. After
people promotions, many would that, each person had the
DriFill down jackets being refuse. The mindset training helps opportunity to share their obstacles.
produced in Shenzhen, China.
open their mind and be more positive.” I heard about such difficult stories,26 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 27
How one factory protects
SUPPLIER PROFILE
workers from debt Social media tools create
bondage. opportunities for change.
“We created loans The International Labour Organization
estimates that around 8 million
These interest-free loans are
approved on a case-by-case basis.
Last year, we introduced a new way
for workers around the world to let us
Kathmandu Corporate Social
Response-ability Manager Gary Shaw
This is one example of how open lines of
communication with workers can spark
to help the people around the world are enslaved Stories are collected by the Youth know directly when they felt their explains, “In one case, we received a improvement. Kathmandu is currently
due to what is known as debt Union and put to the management human rights were being complaint about a particular manager rolling out an equivalent platform in
employees have a bondage. It happens when people sell board. The company also has a compromised. WeChat is one of the who was behaving in an unprofessional Vietnam to ensure workers there can
better life.” their labour in exchange for a loan
and then become trapped in a
charitable foundation called Golden
Heart, which gives grants of US$500–
world’s largest multipurpose
communication platforms, and this
manner towards some female workers. also communicate immediately and
directly with the company.
“As a result of our intervention, the
situation where they are unable to $10,000 to employees who are facing year, we have heard from several
factory invested in leadership training “We aim to come alongside our suppliers
MS NGUYEN TRANG repay or escape the bond. The hardship. The TGI management workers via this channel.
and a review of management. They and work together to improve,” Gary
practice is illegal, but penalties are board contributes US$22,000 per
FACTORY MANAGER These led to ongoing conversations hired someone to help them change says.” In this case, our partner ELEVATE
rarely enforced in the parts of the year to this fund.
with our China-based supply chain the company culture, and when the was able to recommend the necessary
world where it’s most common. This is
Progressive companies like TGI can see specialist and resulted in Kathmandu manager concerned was unwilling to steps for improvement and facilitate
the extreme end of the spectrum, but
the benefits of workers who are less contacting our suppliers to seek change his behaviour, he was training. This is going beyond risk
debt can be crippling for many low-
vulnerable and more engaged. clarification, redress or immediate ultimately dismissed.” management and compliance to
wage workers.
action. genuine positive change.”
As a result of Kathmandu’s
Kathmandu’s Vietnam-based supplier
commitment to sustainability, we
TGI has taken a progressive step
Corrective action have identified suppliers like TGI as
towards helping workers who find
"high-potential, high-growth vendors
plans themselves facing debt.
that will be allocated more business.
Factory manager Ms Nguyen Trang
Kathmandu issued 144 “By supporting companies like TGI with
explains, “Some workers need to
corrective action plans our business, we are directly
borrow money to help their parents
following social audits preventing and proactively addressing
build a house or for a wedding,
designed to identify and those factors that fuel modern
university fees for their children or in OUR SUPPLIERS 2019
collaboratively improve the slavery,” Corporate Social Response-
the case of illness. If they borrow
working conditions and ability Gary Shaw says.
101 37
money from a private bank, the
wellbeing of those in our supply
interest is 20%. We created loans
chain.
from our management board to help
the employees have a better life so
Factory exits they don’t have to worry and can KATHMANDU KATHMANDU BRANDED
concentrate on their job.” BRANDED FACTORIES SUPPLIERS
Kathmandu exited 34 factories.
100% 144
Some were as a result of
consolidating a number of
smaller suppliers with whom
we had very little influence. The
remaining suppliers were exited
NEW SUPPLIERS SCREENED CORRECTIVE
after repeatedly failing to USING SOCIAL CRITERIA ACTION PLANS
improve and showing no
intention or desire to do so. By
29 34 625
working with fewer suppliers,
we can increase our purchasing
power, allowing us to have
more influence over workplace
best practice. TOTAL AUDITS EXITS HOURS TRAINING STAFF28 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 29
Laborlink gives Another 'A' score in the
workers a voice. Ethical Fashion Report.
“Honest A worker at one of our supplier
The 2019 Ethical Fashion Report was
released by Tearfund in April.
Kathmandu scored an A again this
year and ranked as one of New
Tearfund CEO Ian McInnes says this is
a sign that accountability is starting
transparent
factories outside of Ho Chi
Minh City, Vietnam. Zealand’s top five companies. to motivate change from companies.
The Ethical Fashion Report sheds light
communication on what the industry and individual
companies are doing to address
Companies are assessed at three
critical stages of the supply chain –
Kathmandu Corporate Social
Response-ability Manager Gary Shaw
is how we create issues such as forced labour, child raw materials, inputs production and says the report helps raise the bar on
labour and other forms of worker final stage production. This year, in human rights in the supply chain.
change.” exploitation. Each report – since the addition to the four established key “Companies are competitive by
launch of the first in 2013 – has areas of grading (policies, nature. Now instead of trying to be
tracked progress within the industry. transparency and traceability, the best in the world, they’re
GARY SHAW
The change since 2013 has been auditing and supplier relationships, competing to be the best for the
CORPORATE SOCIAL significant. The 2019 report assessed and worker employment), Tearfund world. Like the Modern Slavery Act,
RESPONSE-ABILITY MANAGER 130 fashion companies (representing has added a fifth grading criteria – the Ethical Fashion Report invites
480 brands) on how well they environmental management. companies to become more aware of
mitigate the risk of exploitation in their supply chain and the impact
Tearfund said this year saw the most
their supply chain. they have on the world.”
substantial progress in traceability
down the supply chain since its
conception in 2013.
One of the other tools we use to “We did an audit this year on one of
understand the concerns of workers in our new suppliers that came back
our supply chain is Laborlink, an almost perfect with a score of 93%.
anonymous confidential survey tool However, in the anonymous Laborlink
that workers complete using their survey, 58% of workers reported that
own mobile phone. their supervisors often or sometimes
yell at them. So the workers’
“Audits are very good at looking at the
wellbeing is still being impacted, and
building, checking that fire escapes
that is a concern.”
aren’t blocked and that workers are
getting fairly paid, but it doesn’t Gary says the next step is a
reveal things like harassment or conversation with the factory
bullying, which can have a much managers. “We’ll ask if they
more detrimental impact,” says recognise the issues involved and
Corporate Social Response-ability are equipped to address them. If
Manager Gary Shaw. not, we’ll invite them to work with
ELEVATE to change the culture of
The traditional audit process does
their workplaces and make it clear
include interviews with workers, but
to all what is acceptable.
these are often done on the factory
premises, in sight of their managers, “We don’t expect or anticipate
and it’s not surprising that they result perfection. What we do require is
in very few complaints. Some workers honest transparent communication
are worried they will lose their jobs if so we can work on these issues
they speak up, or in some cases, there together. This is how we create
is a cultural expectation that they change. We collaborate with ELEVATE
remain silent out of misplaced loyalty because they understand the issues,
to their employer. have the experience and expertise
and know the culture,” Gary says.
Garments being manufactured
at TGI in Vietnam.30 SUSTAINABILITY REPORT 2019 OUR SUPPLIERS SUSTAINABILITY REPORT 2019 31
Ongoing progress.
COLLABORATION ADDRESSES SUPPLY CHAIN GOES PUBLIC
WORKER CONCERNS
In December, we made 100% of our
In three cases, our grievance Tier 1 manufacturing list public on the
mechanism resulted in us working with Open Apparel Registry.
other brands to increase our influence.
Gary says this move creates greater
“Sometimes our spend with a transparency and accountability. “In
particular factory isn’t significant, so the past, many brands saw this as a
our voice is not as influential,” explains risk. But today, it’s best practice. It
Corporate Social Response-ability means that, if someone finds human
Manager Gary Shaw. “This is a rights violations in our supply chain,
common problem for businesses all we want people to be able to track us
over the world who truly want to down and let us know about it. We
make a difference but don’t have the are not about self-protection. We are
leverage or influence to do so on their about collaboration and doing the
own. However, as an example, by best for the world.”
working together with other brands,
Tier 1 includes all of our
we were able to approach one of our
manufacturers. Gary says the next
shared factories with a unified and
step is to increase transparency to our
powerful voice as together we made
Tier 2 suppliers, like fabric mills.
up more than 90% of their business.
They were suddenly very responsive
and eager to address the issues we OBOZ TAKES FIRST STEPS ON
raised.” This approach has been CORPORATE SOCIAL
welcomed by other brands. “New RESPONSIBILITY JOURNEY
ways of doing business built on
Gary spent time with the team at
partnership and collaboration are
Oboz this year to share his supply
essential if we are going to
chain approach and knowledge.
meaningfully improve the lives of
Oboz CEO Amy Beck says, “It was
workers and their communities.”
great to have Gary and his
knowledge to partner with us on this
very important topic. We are in the
“We were able to process of building our CSR and
sustainability road map. By working
approach with a with the Kathmandu team and their
unified and processes, standards and training,
this will be an area of focus and
powerful voice as priority for our teams and partners.”
together we
made up more
than 90% of their
business.”
GARY SHAW Workers in our Nepalese factory handmaking
our annual Christmas ornament. All proceeds
CORPORATE SOCIAL go to our community partners to fund
RESPONSE-ABILITY MANAGER education in Nepal.32 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 33
Nga hua.
Our products.
Summit Club member Ben
on location in Kaikoura.34 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 35
Number two in the
Kathmandu team member Jacinta wearing an
Earthcolours tee while exploring the farmers
markets in Vietnam. Every Earthcolours
product is dyed with fully traceable, patented
world for the third
Earthcolours that come from agricultural
waste like nutshells, leaves and vegetables.
year running.
“It’s about learning The Textile Exchange is a global non-
profit on a mission to transform the
More importantly, the benchmarking
programme has been able to track
and moving textile industry. It uses industry progress in the industry as a whole.
benchmarking to help brands The number of companies
forward as an understand where they are and where participating grew 106% to 111
industry.” they might be heading. As a network,
the Textile Exchange helps brands
companies from 17 countries with an
estimated combined turnover of
share their knowledge and join forces US$1.65 trillion. The report showed
MANU RASTOGI to influence change. that the Founders Club – who have
been using the tool for three years –
HEAD OF PRODUCT INNOVATION The Corporate Fiber & Materials
are outperforming other companies.
AND PRODUCT SUSTAINABILITY Benchmark is an annual report that
helps businesses to measure how their Kathmandu Head of Product
preferred fibre and materials strategy Innovation and Product Sustainability
stacks up and to track progress. Manu Rastogi says, “The Textile
Exchange benchmarking is a great
Kathmandu is one of 43 companies in
tool and has helped us develop
the Founders Club of the Textile
insights and strategies into areas for
Exchange and has reported its
improvement. It’s not about being
material choices to the benchmark
first or being last on the chart, it’s
study for three years.
more about learning and moving
For all three years, we’ve sat in the forward as an industry.”
Leader’s Circle for the Outdoor/Sports
category – with a number two ranking.
GLOBAL SCOREBOARD
2 #
WORLD RANKING IN THE
TEXTILE EXCHANGE PREFERRED
MATERIALS REPORT
#7
by volume on the Preferred
Down Leaderboard
#5
by growth on the Preferred
Down Leaderboard
100%
INCLUDED IN THE 100% CLUB
ON THE PREFERRED DOWN LEADERBOARD,
PREFERRED LYOCELL LEADERBOARD AND
PREFERRED MAN-MADE CELLULOSICS
LEADERBOARD36 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 37
Recycled
Summit Club member Jarod putting his Solus
pack to good use in Cuba. The Solus pack is
made with REPREVE fabric and recycles 13
plastic bottles.
materials win.
When it comes to choosing the most “Recycling is a key component of that.
sustainable materials, there are few If we want to shrink the loop, we’ve got
easy answers. Cotton is a natural, to keep materials in use for as long as
renewable material, but its we can,” Manu says. “Our goal is to
environmental impacts are almost become a recycling champion – not
three times greater than polypro. The just recycled polyester but nylon and
materials that win the sustainability cotton and TPU in our rainwear.”
game change based on what you’re
Polyester holds the title as the number
measuring and where the material is
one fibre used worldwide. Only 15% is
being made. Some methods use more
produced using recycled materials –
energy, but if it’s renewable energy,
the rest is virgin polyester produced
the impact decreases.
for consumer demand.
There are so many variables that it
Recycled polyester has been part of
could be a full-time job just figuring
the Kathmandu range since the 1990s.
out what’s the best product to buy.
The REPREVE brand of recycled
Luckily, at Kathmandu, there’s polyester is now used in 101 products
someone whose job it is to do all this in the Kathmandu range. We recycled
analysis for you. His name is Manu 9.3 million bottles last year alone.
Rastogi, and his title is Head of
Manu says that measures of
Product Innovation and Product
sustainability change depending on
Sustainability.
which lens you look through. If water
Manu uses tools like the Higg Materials use is most important, one material
Sustainability Index, life cycle analysis wins. If carbon emissions is most
and conversations with individual important, another material wins.
suppliers to make decisions on which Life cycle analysis is an attempt to
materials have the least impact. see a product with all the lenses
stacked together.
The ultimate aim is to move towards a
circular economy where products sit “People tend to go towards natural
within a closed loop, because we fibres, but a life cycle analysis shows
know that 85% of a product’s impact polyester is the best of the lot. We do
comes from its materials. all that research in the background.”
Our plastic bottle 10.0
2020
TARGET
recycling journey MILLION
9.3
2019
ACTUAL
MILLION
7.5
2019
TARGET
MILLION
6.7
2018
MILLION38 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 39
100% sustainable
cotton on the horizon.
Sustainable For the last five years, we’ve been better for the people who produce
working to transition our entire it, better for the environment it
cotton breakdown range to sustainable cotton. This grows in and better for the
year, we hit 99%, and from sector’s future. They aim to do
September 2019, all new products that by making Better Cotton a
will be made exclusively with mainstream commodity.
sustainable cotton.
Last year, more than 1 million
Head of Product Innovation and metric tonnes of Better Cotton
99
Product Sustainability Manu went into the world’s supply
%
Rastogi says the biggest chains. Better Cotton was grown
challenges came when converting by 2.2 million farmers in 21
the tail end – the blended fabrics countries and made up 19% of
that were only 5% or 10% cotton. global cotton production.
Sometimes, this meant Manu is excited about growing the
approaching suppliers who we recycled cotton percentage in the
didn’t have large volumes with and range. When it comes to impact,
asking them to switch to Better recycled cotton beats other
Cotton Initiative (BCI) yarns. sustainable cotton hands down. It
takes pre-consumer waste from
“The first step is asking,” Manu
the factory floor and blends the
says. “We found that most of our
65 %
BCI 22 %
organic suppliers didn’t realise how easy it
was to do. We would give them
fabric back to a yarn, removing all
the heavy impacts from the
growing and dyeing phases of
the resources to go further down
9 3
% % cotton production.
the chain to the yarn supplier. In
fairtrade recycled
12.1
the end, everyone said yes.”
Better Cotton makes up the
largest chunk of our sustainable
cotton portfolio. The BCI exists to
make global cotton production
100%
2020
TARGET
Our sustainable 99% MILLION
2019
cotton journey
78% bottles worth of fresh
2018
water saved in 2018*
74%
2017
By using more solution-dyed polyester,
nylon and polypropylene, recycled and
59%
fairtrade cotton, we have been able to
2016
increase our water savings from 11.5
38%
million bottles for 2018 to 12.1 million
2015
bottles for 2019.
Summit Club Member Hayley wearing
the new Kathmandu Logo Tee on
location in Cuba * based on 500ml bottles.40 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 41
A growing
resource.
As we transition away from fossil
fuels, the world will need renewable
Commercial bio-
materials to replace the synthetics based synthetics
that make up many outdoor products.
Bio-based materials are essentially come from
synthetics made from plants. Not only
can they can help reduce our
renewable sugars,
dependence on fossil fuels, they can starches and
also absorb CO2 when growing to give
us a climate-neutral alternative. lipids – think corn,
Of course, it’s never that simple. If beets, sugar cane
growing plants for synthetic fabrics
takes away from land we need for
and plant oils.
food or if it requires fertilisers that
broader range of renewables,
cause the release of nitrous oxide,
including algae, fungi and bacteria.
then we’re not really winning. But
these problems are slowly being Kathmandu made its foray into bio-
tackled, and bio-based synthetics is based materials with EarthColors dye,
one of the major areas of innovation which is made from the inedible parts
in the textile industry. of nuts, fruits and seeds. This year, our
Stockton Jacket used a bio-based
Today’s commercial bio-based
waterproof membrane.
synthetics come from renewable
Summit Club member Jen wearing the sugars, starches and lipids – think “Bio-based materials will move up our
highly sustainable Stockton Jacket during corn, beets, sugar cane and plant oils. preferred fibre and material portfolio,”
an unexpected sun shower in Tasmania. The
Stockton Jacket features recycled REPREVE In the future, there may be an says Head of Product Innovation and
face fabric, recycled polyester insulation opportunity to extend this to an even Product Sustainability Manu Rastogi.
and a recycled inner lining.42 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 43
New quality
DATA BREACH
CARE AND REPAIR
Between 8 January and 12
February, an unidentified third
programme rewards party gained unauthorised access
to Kathmandu’s website. During
this process, the third party may
excellence.
have captured customer personal
3,546
information and payment details
entered at checkout for potential
fraudulent use.
As soon as we became aware of
REPAIRS
this incident, we took immediate
steps to confirm that our online
“We’ve spent the store and our wider IT environment
were secure. After this, we worked
last two years closely with leading external IT and
designing a new SAFETY
cyber security consultants to fully
investigate the circumstances of
programme that the incident and confirm which
customers were impacted.
addresses quality Reported incidents Our number one focus was to
of manufacturing.” were a result of clearly identify who had been (and
foreign articles rule out who had not been)
found in clothing and potentially affected by this
TARA STRANGWICK some equipment incident and also identify precisely
GROUP PRODUCT failures. Over half of what information was involved so
the reported
11
OPERATIONS MANAGER we could meaningfully inform our
incidents resulted in customers about how they may
no injuries and four have been affected.
were a result of
Kathmandu proceeded to roll out
non-compliance with
a global notification campaign to
Incidents voluntary codes.
directly notify 19,726 potentially
affected customers and 24
regulators/law enforcement
agencies in 93 jurisdictions. It is
not clear the exact amount of
Quality is at the heart of The Supplier Quality Excellence Five core suppliers were onboarded
individuals who suffered a loss or
Kathmandu’s sustainable approach to programme is designed to be an early into the programme this year. These
fraud as a result and no
product development, because even detection system that picks up suppliers represent 43% of our total
substantiated complaints were
the greenest material choices won’t manufacturing problems before the spend. The programme is working.
stack up if the products don’t have a product leaves the supplier. The aim is First-time pass rates improved by 38%. Customer return received from customers or
regulators.
long and useful life. to reduce the number of
The programme also includes a rates for quality
unacceptable products that arrive to As an organisation, we attach a
Group Product Operations Manager Certified Factory Auditor initiative,
our warehouses and, ultimately, to high value to our customer data,
Tara Strangwick explains, “There are designed to make sure factory
reduce the number of customer and we take the protection of our
lots of facets to quality. One part is inspectors are crystal clear about our
returns due to manufacturing customers’ data very seriously. We
0.34%
designing for quality. Does the quality standards. Only those that
workmanship. have worked and will continue to
product do what it’s supposed to do? pass the programme become 2016 work with the relevant authorities
Then there is the quality of The new Supplier Quality Excellence Certified Factory Auditors and are
and independent security experts.
0.31%
development. Does everything tick programme is an award-based system able to inspect product on our behalf.
2017
the boxes for the user and does it for suppliers. The programme includes This year, we certified our first two Kathmandu conducted a post-
work? And then there is the quality of a factory quality audit that helps drive groups of auditors at two of our incident review of the security
0.26%
the manufacturing. We’ve spent the continuous improvement in a factory’s suppliers’ factories in China. breach, and from this review, we
2018
last two years designing a new quality processes. The programme understand our management
0.20%
programme that addresses that.” also includes product inspections and approach to the breach was
2019
incorporates customer feedback by adequate. Further changes have
aligning with return rates. been made to upgrade credit card
payment processing systems to
prevent this happening again.44 SUSTAINABILITY REPORT 2019 OUR PRODUCTS SUSTAINABILITY REPORT 2019 45
Oboz Oboz products will incorporate
more sustainable materials in
the next two years.
sustainability
update.
WITH DAWSON WESTENSKOW,
DIRECTOR OF PRODUCT
WHAT ARE THE BIGGEST WHAT PROGRESS HAVE YOU MADE
SUSTAINABILITY CHALLENGES FOR THIS YEAR?
OBOZ WHEN IT COMES TO
I think the biggest progress we have
PRODUCT?
made in sustainability in 2019 has been
I think overall our biggest in setting up verification mechanisms.
sustainability challenge has been The first was getting integrated into
clarifying our core values as a the Kathmandu factory audit system.
company and then using those values That has been a huge step for us, and
to inform the overall sustainability it has been great to have the support
strategy. The challenge is that we can of Kathmandu during that process.
go so many different directions when The second form of verification is
it comes to product-related around restricted substance list testing.
sustainability, but we really need clear We are working with a third-party
overarching values that inform where testing firm to help set up that
we should go. We are in the process of programme.
doing that work.
The transition to Forest Stewardship
Council (FSC) mixed packaging has
been a big win this year. We will
complete this transition before the
“We have started end of 2019.
to incorporate We have also started to incorporate
more sustainable materials into our
more sustainable development process. We will be
materials into our launching products in 2020 and 2021
that utilise a percentage of recycled
development materials as well as bloom algae
foam (replacing 30% of petroleum-
process.” based materials in our insoles). These
changes will not impact all products,
but we are testing them in collections
DAWSON WESTENSKOW
with the hope of using them more
DIRECTOR OF PRODUCT broadly in the future.46 SUSTAINABILITY REPORT 2018 OUR FOOTPRINT SUSTAINABILITY REPORT 2019 47
Our new flagship store
in Christchurch.
tapuwae.
Ta matou
Our footprint.You can also read
