Sustainability Report 2019 - Pandora Group
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Sustainability Report 2019
SUSTAINABILITY REPORT 2019
Contents
Read about
reducing
emissions
01 04
OUR SUSTAINABILITY RESPONSIBLE
APPROACH 3 SOURCING 18
02 05
CLIMATE AND WORKPLACE
ENVIRONMENT 8 AND SOCIETY 21
03 06
CIRCULAR AND MANAGING
SUSTAINABLE JEWELLERY 13 SUSTAINABILITY 26
Read about our
impact through
suppliers
2
SUSTAINABILITY REPORT 2019
Bringing together traditional craftsmanship
and state-of-the-art innovation, we provide
affordable jewellery made from high-quality
materials to customers in more than 100
countries. Our hand-finished jewellery can be
personalised, and every day people around the
world express who they are and what matters
to them with their jewellery. In a
time of many fleeting moments, our jewellery
offers an enduring voice to people’s loves.
3
SUSTAINABILITY REPORT 2019
No. 1
jewellery brand in the world.
We have partnered
with UNICEF to support
young voices
In 2019, we sold 96 million
pieces of jewellery Top ranking in annual
MSCI sustainability
rating for the fourth
consecutive year
Science-based
Carbon Renewable
Recycled
target neutral energy materials
Committed to set a Carbon neutral 100% renewable By 2025, all silver and
science-based target to in our own opera- energy at our crafting gold in our jewellery
reduce carbon emissions tions by 2025 facilities by 2020 will come from
across our full value chain recycled sources
4
SUSTAINABILITY REPORT 2019
Time for Pandora’s operations are aligned with
the efforts of governments and health
authorities. We strive to manage store
transition
closures and reopenings in the best way
possible for everybody involved, and
are dedicated to ensuring safe work and
safe shopping. Through our work with
UNICEF, we also support work to combat
the spread of the virus.
Taking care of people and the planet is
our responsibility as a large global com-
Sustainability and responsible business
practices have been part of Pandora’s
By 2025 we will be pany, and it is also a strategic position
that will benefit our business in the long
way of doing business since the very be- carbon neutral in our term. Consumers are increasingly loyal
ginning. We believe high-quality jewel- to brands with strong social and envi-
lery, strong business performance and own operations. ronmental profiles, employees prefer
high ethical standards go hand in hand, companies with whom they share values,
and we craft our jewellery with respect and investors consider Environmental,
for resources, environment and people. Social and Governance (ESG) perfor-
mance alongside traditional financial
With the direction set by the UN out to reduce carbon emissions across metrics.
Sustainable Development Goals, com
our full value chain in line with the Paris
panies now have a clear roadmap for how Agreement. Moving further towards cir- Looking ahead, I believe sustainability
to contribute meaningfully to solving cularity in our materials and waste, our will only become more important. Not
some of the world’s biggest challenges. ambition is that all our silver and gold will just for Pandora, but for all companies.
Since 2011, Pandora has been commit- come from recycled sources by 2025. The transition to a low-carbon econo-
ted to the UN Global Compact corporate my is essential and will make businesses
responsibility initiative and its principles To help promote diversity and inclu- more resilient, profitable and relevant.
in the areas of human rights, labour, the sion beyond our own operations, we Pandora has a strong foundation to build
environment and anti-corruption. Over have launched a global partnership on and I look forward to sharing our pro-
the past year, we have made a number of with UNICEF. The aim is to empower the gress.
important decisions to raise our sustain- world’s most vulnerable children, espe-
ability efforts with particular regard to cially girls, and support them in educa-
climate and environment. tion and life skills. Profits from limited
edition jewellery sold in 100 markets
Pandora is committed to become a will support UNICEF's programmes. The Alexander Lacik
low-carbon, circular and inclusive busi- partnership evolves our long-stand- President & CEO
ness, and we are taking significant steps ing engagement in Thai schools to now
towards this aspiration. Already by 2025, reach children in many other countries.
we will be carbon neutral in our own
operations, and by joining the Science As the world struggles with the reper-
Based Targets initiative - the leading cussions of the COVID-19 outbreak, our
corporate collaboration for ambitious priorities are to support our employ-
action on climate change - we have set ees as best as we can, and ensure that Photographer: Jenna Schoenefeld
5
SUSTAINABILITY REPORT 2019
OUR SUSTAINABILITY APPROACH
Crafting for SUSTAINABLE DEVELOPMENT GOALS
Pandora supports the UN Sustainable Development Goals.
the future
Four goals in particular guide our strategy as this is where
we can contribute the most.
Gender equality
We are an inclusive brand committed to advancing equal-
ity and diversity through e.g. our partnership with UNICEF
by funding programmes that support girls’ education and
empowerment.
Every day, people express who they are
and what matters to them with their
Pandora jewellery. Whether it is a display Decent work and economic growth
of friendship or romance of any kind, or a Our modern crafting facilities in Thailand provide safe and
love for art, gardening or our planet. Our healthy working conditions for more than 11,000 employees
jewellery is a way to express these loves. with wage levels and benefits above local jewellery industry
average.
That is our purpose: We give a voice to
people’s loves.
Since our foundation, we have been con- resources, social and economic inequali-
scious of the need to manage our im- ty, and other major global issues. The UN Responsible consumption and production
pacts on the environment and how our Sustainable Development Goals (SDGs) Circularity is central to how we design, craft, source and offer
business affects the livelihoods of work- capture these challenges and set out an our jewellery, e.g. we use recycled metals in our jewellery, and
ers and communities in our value chain. agenda that Pandora actively contrib- the majority of our crafting waste is reused.
This business approach has already led utes to as part of our day-to-day oper-
to extensive use of recycled metals, re- ations.
use of waste and deep engagement in
the Thai community. To remain a successful business, Pandora
must continue to evolve as a sustainable Climate action
The need for sustainable business prac- company that creates value to all our We are intensifying our climate efforts by committing to
tices has only become more important stakeholders. This way of working is in become a carbon neutral company and set a carbon emission
as it is now clear that companies must line with our historic legacy, while at the reduction target in line with the Paris Agreement and the
best available science recommendations.
adjust their way of doing business to same time requiring us to accelerate the
respond to the climate crisis, the loss integration of sustainability throughout
of biodiversity, the depletion of natural our business. This is the point of de-
parture for our sustainability strategy
and our three-pronged aspiration to
become a low-carbon, circular and inclu-
sive business.
6
SUSTAINABILITY REPORT 2019
A low-carbon business A circular business An inclusive brand Becoming a low-carbon, circular and in-
In early 2020, we announced our first big Reducing our carbon footprint also re- We continuously work towards creat- clusive business will require close collab-
step towards becoming a low-carbon quires changes to our choice of mate- ing an inclusive and effective organisa- oration with a wide range of stakehold-
business with our commitment to be rials and our procurement, waste man- tion benefiting from a diverse group of ers. In 2019, we evolved our responsible
carbon neutral in our own operations by agement and design. This is why another high-performing employees. We do not sourcing programme further to cover
100
2025, convert to 100% renewable energy cornerstone of our strategy is to adopt a tolerate any form of discrimination and more aspects of social and environmen-
in our manufacturing operations by the circular approach to how we design, craft are committed to gender diversity in our tal impacts in our supply chain.
end of 2020, and set a science-based and source our products, packaging and organisation. As an element in this, we
target for reducing greenhouse gas other in-store materials as well as our entered a major global partnership with
emissions across our value chain. stores themselves. This will help us be- UNICEF in 2019 to educate and empow-
come a business that leaves a smaller percent renewable er children and young people, with par-
impact on the environment. Here, we energy in our manu- ticular focus on girls.
are also taking big steps. By 2025, all facturing operations
gold and silver in our jewellery will come by end 2020 Later, we will unfold our strategy for di-
from recycled sources – including grains, versity and inclusion to further advance
semi-finished items such as chains and equality in and beyond our company.
bangles, and other components. In 2019,
we were at 71%, so this shift will have a
significant impact on our value chain car-
bon emissions and our broader environ-
mental footprint.
7
SUSTAINABILITY REPORT 2019
02
Climate and
environment
8
SUSTAINABILITY REPORT 2019
Reducing
emissions PANDORA'S
CLIMATE AMBITIONS
Three targets guide
our efforts to reduce our
carbon emissions
Carbon neutral in own
operations by 2025
As the world's largest jewellery maker,
we are determined to reduce our cli-
Joining the Science Based Targets
initiative to reduce impact across
full value chain
Carbon neutral
in own operations
Joining other leading companies in re- by 2025
mate footprint and help set an example ducing emissions in line with the Paris
for the wider industry. We aim to source Agreement and the best available sci-
100% renewable energy at our crafting ence recommendations, Pandora has
facilities by the end of 2020 and become committed to set a science-based tar-
carbon neutral in our own operations by get through the Science Based Targets
2025. initiative. Thus, before the end of 2021
100% renewable energy
we will present a detailed plan for re-
at our crafting facilities
Our own operations cover crafting fa- ducing emissions across our value chain. by 2020
cilities, retail stores, offices, and ware-
houses. In 2019, the footprint of our own More than 90% of our emissions occur in
operations was 71,699 tCO2e. Electricity our value chain, driven by the raw materi-
and heating make up the main emission als used in our jewellery, franchise stores
sources. Our crafting facilities account- and transportation. In partnership with
ed for 52% of our emissions, followed by experts and our suppliers, we are re-
Committed to set
our more than 1,300 owned-and-opera- searching the impact of our materials as a science-based target
ted (O&O) stores and 200 other points well as exploring scaleable solutions that to reduce emissions across
of sale, which accounted for 46%. will result in significant carbon emissions our full value chain
reductions. Moreover, by using recy-
cled metals and man-made stones that
have a lower carbon footprint than their
mined counterparts, we significantly re-
duce our value chain emissions.
9
SUSTAINABILITY REPORT 2019
Pandora’s path to carbon-neutral operations
Make own operations carbon neutral
A. Decrease emissions B. Source renewable energy C. Offset emissions
Set science-based target for full value chain
Raw Refining Crafting Packaging Transportation Offices and Pandora Franchises
materials warehouses stores
A. Decrease emissions B. Source renewable energy C. Offset unavoidable emissions
We continuously work to implement new energy-saving We will source renewable electricity for our crafting fa- For all remaining unavoidable emissions linked to our
measures across our stores, offices, crafting facilities, cilities from verified solar energy providers in Thailand direct business activities, we will purchase carbon off-
and warehouses. Pandora’s crafting facilities in Thailand through renewable energy certificates. sets to meet our target of becoming carbon neutral. We
are among the most modern and energy efficient in the acknowledge the limitations of this approach, but see it
industry. Our facility in Lamphun in Northern Thailand Longer term, we plan to increase our own production as the best possible solution when it is not possible to
and our AAA crafting site in Bangkok are both LEED of solar power, currently providing 2.4% of our crafting reduce emissions in any other way.
(Leadership in Energy and Environmental Design) certi- facilities’ electricity, and engage directly in developing
fied. Furthermore, in 2019 Pandora launched the test of renewable energy projects, e.g. through power purchase Offsets can also help mitigate other causes of climate
a new store concept. It was created with sustainability agreements. We will also introduce a policy for purchas- change such as deforestation and the destruction of
in mind and reduces lighting energy consumption by at ing green power for our stores. wetlands. We expect offsets to not exceed more than
least 20% compared with lighting in the old stores. 5% of our total emissions reductions.
10SUSTAINABILITY REPORT 2019
Less waste
In addition to reducing carbon emis-
sions, we continuously work to reduce
our wider environmental footprint. Here,
88%
our focus is on water usage and waste at waste at our
our crafting facilities. crafting facilities
recycled in 2019
Water Waste
We aim to reduce water consumption
and increase water recycling rates.
Pandora is committed to reduce or re-
cycle waste materials. We focus on waste
at our crafting facilities.
100%
Water consumption decreased 4% gypsum waste
from 967,046 m3 in 2018 to 928,010 m3 Total waste decreased 8.3% from 6,897 reused in e.g.
in 2019, largely as a result of reduced tonnes in 2018 to 6,321 tonnes in 2019. the construction
production volumes. In parallel, we in- In parallel, we succeeded in maintaining sector
creased the water recycling rate from a very high overall waste recycling rate
22% in 2018 to 23% in 2019 as a result of 88%, one percentage point lower than glass waste
of various investments in water recycling in 2018. The high recycling rate is driven recycled into new
capacity at our crafting sites, includ- by 100% recycling rates for our four pri- glass products
ing installation of new filters for recy- mary waste streams, gypsum, glass, wax
cling water. At our Lamphun facility, we and rubber. Gypsum waste is recycled wax waste
recycled 47% of water in 2019. We will in the construction sector, glass waste reused for
continuously transfer experience and is recycled into various glass products, candle or mould
knowledge from Lamphun to our facili- wax waste is used to make candles or as manufacturing
ty in Bangkok to drive further improve- a moulding material for other manufac-
ments in our total water usage. turers, and rubber waste is made into rubber waste
plastic products or used as fuel by the reused in plastics
cement industry. Pandora cannot repur- or as fuel
pose these waste streams within our
own operations, so we have partnered
with other industries to give them a sec-
ond life.
Repurposing
In addition to minimising waste at our wax and rubber
crafting facilities, we encourage all store During the jewellery crafting pro-
staff to sort and dispose of in-store cess, we use wax models and rub-
waste and live up to local requirements. ber moulds. The wax and rubber are
recycled in other industries.
We are looking into global waste man-
agement systems for our key waste ma-
terials.
11SUSTAINABILITY REPORT 2019
ENERGY CERTIFICATES
Supporting Our aim is to be able to increase this fur-
ther, but our capacity is limited by roof
renewables in
space and other factors. Therefore, we
are purchasing the remainder of elec-
tricity in the form of verified renewable
Thailand energy certificates through the Siam So-
lar Energy 1 project.
What is a Renewable
Siam Solar Energy 1 Energy Certificate?
Siam Solar is a component in Thailand’s Once electricity is fed into the grid by a power gen-
clean energy transition. The project bun- erator, it blends in with all the other electricity. There
dles ten solar photovoltaic (PV) pow- is therefore no way to track renewable electricity
through the system, just like a cup of water poured
er plants across the Kanchanaburi and
into a river cannot be tracked.
Suphan Buri provinces in central Thailand.
Pandora has committed to source 100% Each plant can deliver approximately 10 Since energy cannot be physically traced in the grid,
renewable electricity at our crafting fa- MW of electricity to the Thai grid. Renewable Energy Certificates (RECs) were created
cilities by the end of 2020. to keep track of renewable energy production. When
Siam Solar and similar projects reduce a generator — a solar power plant, for example — gen-
To reach this goal, we will first increase Thailand’s reliance on imported ener- erates a megawatt-hour (MWh) of power, it creates
our own production of green power gy and drive both national and regional electricity and receives one REC, a certificate saying
by installing solar voltaic panels at our economic growth. Aside from meeting that it has generated one MWh of electricity from
crafting facilities. In 2019, we produced the energy demands of regional Thai clean sources.
over 1,300 MWh of renewable energy, communities, this project improves local
covering 2.4% of our total consumption. infrastructure and generates new jobs.
80
The RECs from the project are certified
under the International REC Standard
with the additional GoldPower label. This
guarantees that the project has been
audited against the highest standards
and that the renewable energy purchase
provides actual additional reductions in thousand tonnes
carbon emissions and deliver significant, annual CO2e reduction
verified social and environmental bene- by Siam Solar
fits to the local community.
12SUSTAINABILITY REPORT 2019
03
Circular and
sustainable
jewellery
13SUSTAINABILITY REPORT 2019
Towards
circularity
Optimise Design for
recycling of circularity
products
Our jewellery has always been enduring. METALS USED IN
Each piece is often kept for many years PANDORA JEWELLERY
or may have more than one life as it is
passed on as a gift or through resale. Other metals (copper, Enable Use recycled and
palladium, steel, etc.) longer use of sustainable
We have always crafted our jewellery Approx. 25% Silver and gold
primarily from silver and gold which, like Approx. 75% products materials
many other metals, that are infinitely re-
cyclable.
Now, Pandora will continue to pursue the
Reduce, reuse and
principles of circularity in how we design,
recycle waste in
craft, source and offer our jewellery, con- manufacturing
scious that jewellery must be provided and stores
in a way that supports a better balance
when it comes to use of natural materials,
waste, greenhouse gases, and pollutants.
Circular materials
Our goal is that all our materials should Towards 100% recycled silver and gold This represents a significant opportunity
be renewable, recycled or otherwise In 2019, 71% of the silver and gold in for Pandora to further reduce our envi-
sustainable. We will base our definition We predominately use gold, silver, pal- Pandora’s products came from recy- ronmental footprint. Recycled metals
of ‘sustainable materials’ on generally ladium and copper; man-made stones cled sources. Now, we have set a target have a considerably lower impact than
accepted certifiable standards, life-cy- such as nano crystals and cubic zirconia; that by 2025 all of it must come from mined metals in terms of water, CO2 and
cle assessments and other scientific ev- and, in significantly smaller amounts, recycled sources. This includes grains, other air pollutants. Sourcing recycled
idence. materials such as natural gemstones, semi-finished items such as chains, and raw materials will cut carbon emissions
leather, polyester and glass. Silver is the other parts supplied by external ven- by two thirds for silver and by more
most used material in our jewellery, fol- dors. While almost all the grains we use than 99% for gold, according to life cy-
lowed by copper. In 2019, silver account- are recycled (in 2019, 98% of the silver cle assessments. While we are confident
ed for over half of all purchased product and 100% of the gold), most of the sil- that our suppliers meet our social and
materials, measured by weight. ver and gold in semi-finished items and environmental standards, we also rec-
parts come from mined sources. ognise that the recycled silver supply
14SUSTAINABILITY REPORT 2019
SUPPLY OF RECYCLED SILVER
chain poses its own social and environ-
mental challenges. We will engage with
stakeholders in the industry to improve In 2019, Pandora commissioned a study by the consultancy firm Rambøll on the
global silver market and supply chains. The study has shed light on some important
standards and to make the supply chain
characteristics of the global market for recycled silver.
more transparent.
Stones with less impact • Volume of recycled silver has remained steady in recent years: Annual global
In line with previous years, Pandora pur- silver supply has remained around 30,000 tonnes since 2009. In 2018, recycled
chased 1.1 billion stones in 2019, and silver amounted to 4,706 tonnes, around 15% of the total supply, a figure that has
more than 99.9% of these were man- remained relatively stable in the last five years. In general, the amount of recycled
made, primarily cubic zirconia and nano silver on the market follows the movements in the price of silver.
crystals.
• Majority of recycled silver comes from industry: 60% of recycled silver comes from
industry, where silver is used as a catalyst to make ethylene oxide, an important
Like metals, natural stones are finite
raw material in chemical production, but also in electronics and for other purposes.
resources that can cause environmen-
Silverware, jewellery and coins account for a total of 28% and photography accounts
tal damage when mined. According to for 12%.
a study by environmental consultancy
1/3
Trucost, the environmental cost of cubic • More than half of recycled silver comes from North America, the EU and Japan: Re-
zirconia is just 0.001% of that of a mined cycled silver supply originates mainly in North America, the EU and Japan accounting
diamond, largely due to the vastly small- for a total of 53%. 19% and 28% originate in China and rest of the world respectively.
er quantity of energy required to pro- The majority of scrap supply is traded in-country or in-region, suggesting that availa-
duce cubic zirconia. ble recycled silver supply originates from local scrap resources.
• Considerable part of the supply chain remains informal: Scrap for recycled silver
Natural stones are still used in smaller carbon emissions
from electronic and electric sources (WEEE scrap) is traded in formal and infor-
quantities and selected collections. from recycled silver
mal supply chains. In Europe, the majority of recycled silver passes through formal
compared to mined
supply chains, while informal supply chains likely make up a larger share in Asia. The
silver
informal scrap supply chain is traditionally made up of small and medium-sized en-
terprises, including scrap collectors, consolidators, separators, and, in some cases,
refiners.
• Informal supply chain has ESG gaps: The social and environmental impacts through-
out the informal WEEE scrap supply chain are significant and include health and
safety hazards, waste disposal, emissions to the environment, use of vulnerable
Recycled labour, and violations of human rights. In general, the formal recycled silver supply
chain poses far fewer risks to workers, communities and the environment.
silver and gold
In 2019, 71% of the silver
and gold in Pandora’s jew- Pandora intends to explore opportunities for engaging with key stakeholders in the
ellery came from recycled recycled silver supply chain to improve and formalise it. In addition, we intend to ex-
sources plore opportunities for increasing the availability of recycled silver as there appears
to be untapped opportunities for increasing the rate of recycling of silver.
15SUSTAINABILITY REPORT 2019
Other jewellery materials
Pandora uses other raw materials, al-
CIRCULAR DESIGN
though in small volumes and mostly for
specific collections. These raw materi-
als include glass, leather, polyester, pearl
Pandora will continue to
develop circularity targets Made from scrap
and mother of pearl, some of which can
be recycled. These materials make up less and standards for primary
than 0.1% of our total product materials. product raw materials in line In 2019, Pandora crafted more than 200
thousand pieces of jewellery from Mura-
We make sure that these materials come with our commitment to only no glass. Glass from the Venetian island
from suppliers that respect our social use renewable, recycled and of Murano is characterised by vivid col-
and environmental standards and that ours, superior clarity and transparency.
they adhere to local material require- sustainable materials in our
ments such as REACH. Pandora will con-
tinue to develop circularity targets and
jewellery. Glass is a natural product that can be
recycled many times. In 2019, we intro-
standards for primary product raw ma- duced a unique collection to show that
terials in line with our commitment to recycling is not only good for the envi-
only use renewable, recycled and sus- ronment, it can also result in amazing
tainable materials in our jewellery. jewellery.
The limited edition collection “Beau-
Packaging and store materials Similarly, we are making more sustaina- tifully Different” used leftover glass
We believe that a beautiful piece of ble choices of furniture and fixtures for fragments from the Murano workshops
jewellery should come in sustainable our concept stores. We are testing a new to create new jewellery. The glass frag-
packaging. We have decided that all box- design for the stores, which reduces en- ments were collected and remelted into
es and bags must be made using only ergy consumption for lighting by at least new glass rods with unique patterns and
FSC-certified paper. We are testing jew- 20%. swirls that were then cut into the correct
ellery boxes and bags with reduced plas- sizes and shapes.
tic content. In 2021, we will further develop our ap-
proach for packaging, display materials This is an example of designing with cir-
and in-store furniture and fixtures. cularity in mind.
Recycling waste BEAUTIFULLY
DIFFERENT
As part of our approach to circularity, The six designs
we continuously work to reduce, reuse from the 'Beau-
or recycle our waste streams. The pri- tifully Different'
mary waste streams are generated at collection were
our crafting facilities. Secondary, smaller made from left
waste streams come from our stores. over Murano glass.
Read more about waste in the
Climate and environment section
16SUSTAINABILITY REPORT 2019
LETTERBOX CONCEPT
You’ve got mail Most online shoppers know the frustra-
tion of missing an at-home delivery. You
have to wait for new pick-up details or
queue at the post office to get your or-
der. Not the ideal experience.
Pandora is shipping online orders in
a smaller and more environmentally- Pandora saw potential to make it easier
for customers to receive their orders,
friendly box. It gives our customers a while at the same time reducing the
better shopping experience, reduces need for packaging materials and saving
packaging and saves costs. on shipping costs.
Smaller is better
The idea was to secure next-day deliv-
ery by developing a package format that
could fit in a standard letterbox. That way
customers could get their orders even if
they were not home to receive them.
The first trial took place in the UK. The
new letterbox concept was well received
87%
by our customers and saved Pandora
more than DKK 25 million in shipping
costs in the UK. It also reduced the size
of the box by 60%, saving packaging ma-
terials.
Following the successful trial in the UK, of customers provided
Pandora has introduced the new letter- positive feedback on
box design to other online markets in the packaging and the
Europe. next-day delivery.
The design will not only reduce costs and
make online shopping easier for our cus-
tomers, it is also expected to save over
200 tonnes of CO2 per year.
17SUSTAINABILITY REPORT 2019
04
Responsible
sourcing
18SUSTAINABILITY REPORT 2019
Impact through
suppliers
We aim to work with suppliers that share Responsibility
our commitment to sustainability, and in We will improve the social and environ-
2019, Pandora took steps to better align mental footprints of our supply chain,
our responsible sourcing programme primarily by choosing suppliers that
with our sustainability ambitions. comply with category-specific inter-
nationally recognised standards. For
We take a category-specific approach to instance, in 2019 all our metal refiners
responsible sourcing in keeping with our were certified according to either the
commitment to circularity. This means LBMA or the RJC standards.
that we seek to define specific criteria
for each of our product and material
categories based on a common set of Traceability
standards listed in our supplier code of We will improve our ability to trace the
conduct and our responsible sourcing origin of our raw materials, including by
policy. ensuring that raw materials are con-
flict-free. In doing so, we are informed by
Our approach seeks to continuously im- the OECD Guidelines for Due Diligence
prove our performance around three Guidance for Responsible Business Con-
objectives: responsibility, traceability duct.
and transparency.
Transparency
We will improve our disclosure of key
suppliers and the structure of our sup-
ply chains. Since 2018, we have been dis-
closing our suppliers of silver grains, gold
grains and diamonds, and we will extend
this to other primary raw materials with
due respect for Pandora's and our busi-
ness partners' need for confidentiality.
19SUSTAINABILITY REPORT 2019
NON-COMPLIANCE ISSUES
IDENTIFIED AT AUDITED RESPONSIBLE SOURCING
SUPPLIERS IN 2019 PROGRAMME
Issues Percentage
Health and safety 56% Guiding policies &
Compensation and supplier code
benefits 17% Responsibility, traceability
and transparency
Working hours 10%
Environment 8%
Insufficient
child/forced labour
procedures 4%
Freedom of Compliance,
association 3% verification &
Disciplinary practices 1% supplier screening
Ethics 1%
Material &
Our performance supplier selection
In 2019, we aligned our supplier code of ment or confirm their active certifica- Third-party verification
conduct with the Ethical Trading Initia- tion to verify compliance with our stand-
tive’s ETI Base Code on labour practice, ards. Suppliers are audited annually if
and our associated audit protocol with they are required to comply with mate-
the internationally recognised Sedex rials traceability requirements. In 2019,
Member Ethical Trade Audit's (SMETA) 99% of our total direct sourcing value
four pillars of labour, health and safety, was audited by third-party auditors. This Compliance
environment, and business ethics. This is consistent with last year’s figure. Pan- monitoring
change will take effect during 2020. dora ordered a total of 16 independent Frequent desktop and
third-party supplier audits. These iden- on-site audits conducted
depending on nature
We maintained our commitment to en- tified a total of 262 non-compliance
of certification
suring that all new product suppliers issues, of which only two were zero tol-
are assessed by an independent third erance breaches that were immediately
party or hold active certifications from and satisfactorily resolved. The majority
internationally recognised certification of non-compliance cases identified dur-
standards. All existing product suppliers ing the audits involved either health and
perform a biannual third-party assess- safety standards or working conditions.
20SUSTAINABILITY REPORT 2019
05
Workplace
and society
21SUSTAINABILITY REPORT 2019
An inclusive
culture
Pandora is committed to fostering a cul- Pandora’s new Cooperation Committee
ture of diversity and inclusion within and was introduced at our Global Office in
beyond our own operations. We respect 2018. The Committee includes employ-
human rights throughout our value chain ees from across the business units, and
and strive to create a safe, healthy and the purpose is to enable ideas, com-
fulfilling working environment for all our ments and input from the organisation
employees. to be communicated directly to Pando-
ra's Executive Leadership Team.
People and culture
Everything we do at Pandora is made Respecting human rights Since late 2019, we
possible by our 28,000 employees. Pandora’s Human Rights Policy outlines have introduced
our commitment to the United Nations two limited-edition
One aspect of creating a winning culture Guiding Principles on Business and Hu- jewellery collections
to support UNICEF.
is to listen and act on employee feed- man Rights and the core conventions of
Read more on
back, which is why we conduct an em- the International Labour Organization
page 25.
ployee satisfaction survey each year. In (ILO).
2019, employee engagement remained
high, with an index score of 81 out of Our annual due diligence in line with
100, three points above peer group the OECD Due Diligence Guidance for
companies. Responsible Business helps us identify
potential risks. We mitigate such risks
through our Responsible Sourcing Pro-
gramme, which requires our suppliers
and subsuppliers to meet high ethical
standards, including respect for human
rights.
22SUSTAINABILITY REPORT 2019
In 2019, there were four work-related pany assets. Code of Conduct training Organisational diversity
For our statements on the UK Modern
accidents with absence, compared with also forms part of our onboarding pro- Pandora’s Diversity Policy sets out our
Slavery Act and The California Trans- two accidents in 2018, among more than cess for new employees. commitment and targets to foster an in-
parency in Supply Chains Act, read 11,000 employees at our crafting facili- clusive culture.
more at our website: ties. The lost time injury frequency rate To support the Code, our employees
(LTIFR) of 0.15 remains low, which is sat- are encouraged to raise ethical con- or our Board of Directors and senior
F
pandoragroup.com/
sustainability
isfactory, and mitigations have been put
in place.
cerns with local management, HR, Legal
or Compliance teams. If employees per-
management, our target is that the per-
centage of the underrepresented gen-
ceive that their concerns are not prop- der should be at least 40%.
erly addressed, or if they are not com-
Code of Conduct fortable with raising concerns through At the end of 2019, women made up
Our efforts to identify, assess and miti- The Pandora Code of Conduct explains these channels, they can choose to use 50% of Board members (4 out of 8),
gate human rights risks in the jewellery what is required of all employees with Pandora’s externally managed whistle- compared with 43% in 2018 (3 out of 7),
supply chain are reviewed every three respect to human rights, working con- blowing function. which is above average for large listed
years by independent third party audits ditions, environmental footprint and Danish companies.
as part of our certification against the anti-corruption. The Code offers em-
Responsible Jewellery Council’s (RJC’s) ployees one common point of reference Diversity and inclusion At the end of 2019, 26% of senior man-
Code of Practices (COP). In 2019, more for ethical dilemmas, backed by training We continuously work towards creating agement (Executive Leadership Team,
than 95% of our total direct spend was modules spanning hiring procedures, inclusive, attractive, effective and fun General Managers and VPs) were women,
subject to independent third-party au- workplace ethics, anti-harassment, teamwork that benefits from a diverse down from 30% in 2018, but in line with
dits, including robust third-party certifi- fraud, gift giving and the misuse of com- group of high-performing employees. Danish gender statistics for middle and
cations. We do not tolerate any form of discrim- senior managerial positions. Pandora will
ination and will continue to advance our continue to strive for a better gender
approach to diversity and inclusion in balance in senior management.
Health and safety and beyond our own operations.
To make sure our crafting facilities follow
Addressing COVID-19 Globally, the gender split among Pando-
Pandora’s safety, health and environ- During the coronavirus outbreak, Pan- ra's employees is 74% women and 26%
mental standards, we have established
dora’s top priority has been to keep Empowering young voices male. The nature of Pandora’s jewellery
our employees and customers safe.
a Safety, Health & Environment (SHE) In 2019, Pandora joined forces with and primary target group attracts a very
To support efforts to limit the spread
Committee comprising senior manage- of the virus, we temporarily closed UNICEF to educate and empower chil- high proportion of female applicants, in
ment and elected employee represent- many of our stores and offices. We dren and young people, with special fo- particular to our stores (around 90%). We
atives. Together with external experts, have donated to UNICEF's COVID-19 cus on girls. Through the sale of jewellery base all hiring, promoting and rewarding
the elected internal representatives are response and are a core partner of and other initiatives, Pandora will raise on merits, qualifications and behaviour
responsible for checking and developing their global campaign to prevent the funds to support UNICEF programmes only.
SHE conditions. For instance, the SHE pandemic from becoming a lasting on education, gender equality, rights
team is involved in all new production crisis for children. We have also ena- awareness, personal empowerment and Guided in part by feedback from em-
bled our employees to volunteer their
setups to make safety a priority from civic engagement. Part of the annual do- ployees, we have introduced more
idle work hours to local community in-
the start. Our active RJC Code of Prac- nation to UNICEF supports their overall transparent career bands to promote
itiatives during store closures. We will
tices-certification further helps us to continue to support the authorities'
work to improve the lives of millions of career development across all employee
verify high health and safety standards work to curb the virus and ensure that children worldwide. groups.
and procedures throughout our opera- we offer employees and customers
tions globally. safe environments.
23SUSTAINABILITY REPORT 2019
Developing a safe workplace
YOUTH FASHION SUMMIT On top of a competitive salary, employees
at our crafting facilities benefit from ex-
Equality in the tensive professional and personal devel-
opment training, parental classes, access
fashion industry
to library, scholarships, on-site canteens
and free bus transportation to and from
work.
As part of Copenhagen Fashion Summit,
the Youth Fashion Summit invites young
industry talents from around the world
to learn from established professionals Our presence in Thailand
and enact change in the fashion industry. Our crafting facilities in Thailand provide
In 2019, for the second consecutive year, safe and healthy working conditions for
Pandora was the corporate partner for more than 11,000 employees. Our facili-
the summit. Pandora challenged the stu- ties are significant and positive contrib-
dents to find solutions for how to drive utors to the surrounding Thai commu-
gender equality in the jewellery sup- nities. Salaries and benefits are above
ply chain. The winning proposals were local jewellery industry average and can
shared with the audience at Copenha- on average sustain the livelihood of a
gen Fashion Summit, which has become three-person household. Each Pando-
the largest sustainability event in fashion ra job creates an additional 1.7 jobs in
of the year. Thailand due to the carry-over effect to
Thai suppliers and the spending power
of our employees.
We offer training and development pro-
grammes to employees that go beyond
INTERACTIVE
technical skills and work processes and
CONVERSATIONS
Students present cover safety, health, and life skills, such
their ideas to a as motherhood and private economy.
panel of fashion We respect and support our employees’
and sustainability right to freedom of association and to
experts for con- engage in collective bargaining. Pandora
structive feedback. started to collaborate with the union as
soon as it was established in 2018.
Since 2006, Pandora’s charity project,
the My School Project, has allowed our
Thai employees to nominate their old
primary schools for refurbishment or re-
building. So far, 14 schools have benefit-
ed from this support.
24SUSTAINABILITY REPORT 2019
PARTNERING WITH UNICEF
Empowering
young people
education is about much more than just
going to school. It is about feeling safe
and having the space to learn, devel-
oping the skills they need to find work,
and making decisions about their own
lives. With an education, these girls have
a chance to fulfil their potential and to
contribute to the communities where
they live.
About UNICEF
The United Nations Children’s Fund,
The partnership with UNICEF kicked off
UNICEF, has been working to improve
In September 2019, Pandora and UNICEF with a limited edition Pandora Me jew-
the lives of children and their fam-
launched a global partnership to sup- ellery collection to celebrate World Chil- ilies for over 70 years. UNICEF works
port the most vulnerable children, es- dren’s Day on 20 November 2019. On in over 190 countries and territories
pecially girls, around the world to lead International Women’s Day on 8 March to save children’s lives, defend their
healthier and safer lives and fulfil their 2020, we launched our second limit- rights and help them fulfil their po-
potential. Through sale of jewellery and ed edition charm. Future initiatives will tential, from early childhood through
other initiatives, Pandora will raise funds include new jewellery, awareness cam- adolescence. In 2018, UNICEF provid-
for UNICEF’s work. paigns and opportunities for Pandora ed educational support to more than
customers and employees to engage 12 million children around the world.
The aim of the partnership is to raise directly by making donations to UNICEF.
funds for UNICEF to empower children
and young people by supporting UNICEF
1 in 6
programmes within education, gender
" I’m
equality, rights awareness, personal em-
very proud of our partnership with
powerment and civic engagement.
UNICEF. We want to do our part in solving
Every day, millions of girls around the some of the big problems we face in our
world lose out on their right to educa-
societies.
tion due to poverty, cultural practices of the world's 600 million
and poor infrastructure. Violence and adolescent girls are not in
conflict also play a part. For these girls, secondary school Alexander Lacik, President & CEO
25SUSTAINABILITY REPORT 2019
06
Managing
sustainability
26SUSTAINABILITY REPORT 2019
Governance
and key partners Responsible
Jewellery Council
Pandora has been a certified member
United Nations
Global Compact
We are signatories to the United Nations
of the Responsible Jewellery Council Global Compact (UNGC) and acknowl-
(RJC) since 2012. RJC is an international edge our responsibilities in the areas of
Pandora’s Sustainability Board provides The Sustainability Board is chaired by our non-profit standards and certification human rights, labour, environment, and
direction for the company’s sustainabili- CFO and comprises four other members organisation with more than 1,000 mem- anti-corruption.
ty work, oversees our targets, and guides of Pandora’s Executive Leadership Team. ber companies spanning the jewellery
our efforts to integrate and align sus- supply chain from mine to retail.
tainability efforts into Pandora’s long- The below table shows the main chal-
term business objectives and practices. lenges to reach our objectives and the
approach we take.
Objective Challenge Approach BSR UNICEF
Pandora is a member of BSR, a global Pandora and UNICEF have partnered
Pandora is commit- Metals refining and • Partner with suppliers to implement non-profit organisation that works with to support the world’s most vulnerable
ted to become a low- jewellery manufac- energy efficiency measures and its network of more than 250 member children to lead healthier and safer lives
carbon business turing is an increase their share of renewable companies and other partners to build a and fulfil their potential. The aim of the
inherently energy- energy
just and sustainable world. partnership is to raise funds for UNICEF
intensive process • Increase on-site renewable energy
generation at Pandora crafting to empower children and young people
facilities by supporting UNICEF programmes with
education, gender equality, rights aware-
Pandora is commit- Increasing the supply •E
nsure an adequate supply of ness, personal empowerment, and civic
ted to become a of responsibly recycled silver that is certified Science Based engagement.
circular business sourced recycled according to robust standards such Targets initiative
silver as LBMA and RJC Pandora has committed to set a sci-
•S
upport development of these ence-based target through the Science
schemes to minimise environmental
Based Targets initiative. The Science
and social risks in recycling industry
Based Targets initiative is the leading
corporate collaboration for ambitious
Pandora is commit- Ensuring inclusive • Capacity building amongst suppliers
ted to become an business practices and business partners
action on climate change. It is a collabo-
inclusive brand are applied • Integrate inclusivity parameters in ration between CDP, the United Nations
throughout the value supplier contracts to guarantee Global Compact (UNGC), World Resourc-
chain requirements are met es Institute (WRI) and the World Wide
Fund for Nature (WWF).
27SUSTAINABILITY REPORT 2019
Sustainability KPIs
CLIMATE AND ENVIRONMENT 2019 2018 2017 CIRCULAR AND SUSTAINABLE JEWELLERY 2019 2018 2017
Energy consumption at crafting facilities (MWh) Total direct spend audited by third party, % >95% >85% >85%
Total energy consumption 54,280 60,454 47,201 Silver and gold grain suppliers certified by RJC/LBMA, % 100 100 100
Solar energy generated 1,307 1,316 1,512 Recycled gold grains, % 100*** 100 74
Renewable energy, % 2.4% 2.2% 3.2% Recycled silver grains, % 98*** 88 97
Recycled silver and gold total, %**** 71 N.A. N.A.
Greenhouse Gas Emissions
Scope 1 (mtCO2e)* 276** 306 N.A.
Scope 2 (mtCO2e)* 71,394** 72,767 N.A. WORKPLACE AND SOCIETY 2019 2018 2017
Lost time injury frequency rate (LTIFR) at crafting facilities 0.15 N.A. N.A.
Water consumption
Water consumption at crafting facilities, m3 928,010 967,046 826,289
Water recycled at crafting facilities, % 23 22 N.A. BOARD OF DIRECTORS AND SENIOR MANAGEMENT 2019 2018 2017
Gender split, Board of Directors, % W50 / M50 W43 / M57 W33 / M67
Waste at crafting facilities
Gender split, senior management, % W26 / M74 W30 / M70 W39 / M61
Recycled waste, tonnes 5,587 6,170 5,444
Total, tonnes (% recycled) 6,321 (88%) 6,897 (89%) 6,832 (80%)
Gypsum 100% 99% 86%
Glass 100% 100% 100%
Wax 100% 100% 100%
Rubber 100% 100% 100%
* Within Ernst & Young’s assurance scope (see the Independent Auditors' Limited Assurance Report on page 31) Additional data sources
• Mined and recycled silver CO2 /kg: GaBi database, 2019
** Figure is restated from the Annual Report 2019, which was 71,394 tCO2e and only included Scope 2 emissions • Mined gold CO2 /kg: World Gold Council, 2018
*** 2019 figures include recycled grains refined from Pandora scrap. In 2019, Pandora did not purchase gold grains from • Recycled gold CO2 /kg: C. Hafner, 2019
external sources, while 96% of silver grains were from external recycled sources.
**** Recycled silver and gold are precious metals that have been previously refined. Our products may contain a fraction
of silver or gold up to 5% coming from certified but non-recycled sources due to difficulties in separating sources in the
refining process. Pandora continuously works with our suppliers to fully remove the fraction of non-recycled sources.
28SUSTAINABILITY REPORT 2019
Environmental data Circular and sustainable jewellery
KPI Definition KPI Definition
Energy consumption at Amount of energy or power used to support Total direct spend audited by Spending value of third party-audited
crafting facilities production facilities third party, % product suppliers/total spending value of
product suppliers
Energy produced by solar cells Energy originating from the facility solar panels
Silver and gold grain suppliers Percentage of active silver and gold grains
Water consumption Amount of water used to support production
certified by RJC/LBMA, % suppliers who hold active certification/
facilities
total active silver and gold grains suppliers
Recycled water percentage Amount of water that has been recycled
Recycled silver and gold grains, % Recycled silver or gold grains purchased/
of consumption (looped) as a percentage of total consumption
total of silver or gold grains purchased,
Recycled waste Waste recycled from the categories general, including refined Pandora scrap
industrial and hazardous
Recycled silver and gold total, % Percentage of total recycled purchased
Gypsum, glass, wax Recycled percentage of total gypsum, glass, silver and gold includes grains, chains,
and rubber waste wax and rubber waste bangles, ODM/OEM and other sources
CO2 emissions Workplace and society
Scope 1 and 2 emissions are calculated in accordance with the methodology KPI Definition
set out in the Greenhouse Gas Protocol Corporate Standard.
Lost time injury frequency rate (LTIFR) The number of lost-time injuries per
million hours worked during an accounting
KPI Definition period
Scope 1 Scope 1 emissions include on-site fuels used to craft our
jewellery, refrigerants to cool our crafting facilities, and fuel used
in our employee trams. Actual activity data is used for all
calculations.
Scope 2 Scope 2 emissions include the purchase of electricity and heat
for our offices, warehouses, crafting facilities, and owned and
operated retail stores. We omit emissions from satellite offices
with less than 30 people. Emissions for our crafting facilities,
representing 52% of Scope 2, are calculated on the basis of actual
electricity data. Our retail emissions, representing 46% of Scope
2, are estimated using electricity spend data and multiplying it by
the cost of electricity and emission factors in each country in
which we have a stor presence. This method uses the loca-
tion-based method of reporting, which reflects emissions due to
electricity consumption from a conventional power grid, using
average emission factors of the country’s energy mix.
29SUSTAINABILITY REPORT 2019
About this
report
The Pandora Sustainability Report is
based on our performance for Fiscal
Year 2019 (1 January to December 31
2019).
We aim to provide a comprehensive
overview of Pandora’s sustainability im-
pact. We are committed to transparent
reporting on the progress we make to-
wards achieving our sustainability strat-
egy. Pandora reports in accordance with
the United Nations Global Compact
(UNGC). This report is our annual Com-
munication on Progress to the UNGC.
Pandora also supports the United Na- For further information about Pandora
tions Sustainable Development Goals and sustainability, visit
(SDGs). Together with the Annual Report
2019, the Sustainability Report 2019 ful-
fils the sustainability disclosure require-
pandoragroup.com/
sustainability
ments outlined in sections 99(a) and (b)
of the Danish Financial Statements Act.
This is the statutory report on sustain- Reporting principles
ability for Pandora Int. Aps and Pandora These reporting principles cover KPIs
Jewellery Central Western Europe, see presented on page 29. We continuously
section 99(a) of the Danish Financial seek to develop our ESG data set in or-
Statements Act. der to support our business and to pro-
vide our stakeholders with relevant and
transparent reporting on our ESG per-
formance.
30SUSTAINABILITY REPORT 2019
INDEPENDENT AUDITORS' LIMITED ASSURANCE REPORT circumstances of Pandora's use of the • Analytical reviews, including trend anal-
reporting approach and criteria de- yses, of data supplied by Pandora.
scribed on page 29 as the basis for • Evaluation of the appropriateness of
To the stakeholders of Pandora Our independence and quality the preparation of the ‘Scope 1 and 2 accounting policies used and the rea-
We have undertaken a limited assurance control greenhouse gas emissions’ information, sonableness of accounting estimates
engagement for selected environmental We have complied with the independ- assessing the risks of material misstate- made by Management.
information in Pandora’s sustainability ence and other ethical requirements of ment of the ‘Scope 1 and 2 greenhouse
report 2019. the Code of Ethics for Professional Ac- gas emissions’ information whether due The procedures performed in a limited
countants issued by the International to fraud or error, responding to the as- assurance engagement vary in nature
We were asked to conclude whether the Ethics Standards Board for Accountants sessed risks as necessary in the circum- and timing from, and are less in extent
following information had been pre- and additional requirements applicable stances. A limited assurance engage- than for, a reasonable assurance engage-
pared in accordance with the reporting in Denmark, which rely on general prin- ment is substantially less in scope than ment. Consequently, the level of assur-
approach and criteria described on page ciples regarding integrity, objectivity, a reasonable assurance engagement in ance obtained in a limited assurance
29: professional competence and due care, relation to both the risk assessment pro- engagement is substantially lower than
confidentiality and professional con- cedures, including an understanding of the assurance that would have been ob-
‘Scope 1’ for the reporting period 1 Jan- duct. internal control, and the procedures per- tained had we performed a reasonable
uary to 31 December 2019 with compar- formed in response to the assessed risks. assurance engagement.
ative information for the period 1 Jan- Ernst & Young Godkendt Revisionspart-
uary to 31 December 2018, as stated in nerselskab is subject to the Internation- The procedures we performed were
the section 'Greenhouse Gas Emissions’ al Standard on Quality Control (ISQC) 1 based on our professional judgment and Limited assurance conclusion
on page 28. and thus uses a comprehensive quality included inquiries, observation of pro- Based on the procedures performed
control system, documented policies cesses performed, inspection of docu- and the evidence obtained, nothing has
‘Scope 2’ for the reporting period 1 Jan- and procedures regarding compliance ments, analytical procedures, evaluating come to our attention that causes us to
uary to 31 December 2019 with compar- with ethical requirements, professional the appropriateness of quantification believe that the selected environmen-
ative information for the period 1 Jan- standards, applicable requirements in methods and reporting policies, and tal information regarding ‘Scope 1 and
uary to 31 December 2018, as stated in Danish law and other regulations. agreeing or reconciling with underlying 2 greenhouse gas emissions’ for Pandora
the section 'Greenhouse Gas Emissions’ records. for the period 1 January to 31 Decem-
on page 28. ber 2019, with comparative information
Our responsibility As part of our examination, we per- for the period 1 January to 31 Decem-
Our responsibility is to express a lim- formed the below procedures: ber 2018, has not been prepared, in all
Management’s responsibilities ited assurance conclusion on selected • Interviews of relevant company pro- material respects, in accordance with
Pandora’s Management is responsible environmental information based on fessional responsible for the selected the reporting approach and criteria de-
for the preparation of the ‘Scope 1 and the procedures we have performed and information at Pandora’s headquarters scribed on page 29.
2 greenhouse gas emissions’ informa- the evidence we have obtained. We con- in Copenhagen.
tion in accordance with the reporting ducted our limited assurance engage- • Assessment of whether data have been Copenhagen, 21 April 2020
approach and criteria described on ment in accordance with ISAE 3000, “As- collected, assessed and quality-re- ERNST & YOUNG
page 29. Pandora’s Management is also surance Engagements Other than Audits viewed as prescribed in Pandora’s man- Godkendt Revisionspartnerselskab
responsible for such internal control as or Reviews of Historical Financial Infor- ual for collection of greenhouse gas CVR-nr. 30 70 02 28
the Management considers necessary to mation”, issued by the International Au- emissions data.
enable the preparation of such informa- diting and Assurance Standards Board,
tion that is free from material misstate- and additional requirements under Dan-
ment, whether due to fraud or error. ish audit legislation.
Mikkel Sthyr Carina Ohm
A limited assurance engagement un- Partner, State Authorised Associate Partner
dertaken in accordance with ISAE 3000 Public Accountant
involves assessing the suitability in the mne26693
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