Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental impacts (transportation, waste, electricity)
• Supplier assessment
• Employee training and education
• Product safety
• Community engagement

Environmental Achievements

• Improved waste management routines, increasing recycling rates
• 73% of goods in Norway delivered through central warehouse in 2015 (reducing transportation)
• 70% of goods in Sweden and Finland delivered through central warehouse in 2015 (reducing transportation)
• Project initiated to change lighting in Norwegian stores to LED
• 85% of heat production in central warehouse outside Oslo from wood chip fired boiler in 2015
• XXL building in Skanssi, Finland awarded LEED Gold environmental certificate

Social Achievements

• Established Camp XXL training facility
• Talent program for employees with leadership abilities (100 graduates)
• Introduced a project offering internships for those on rehabilitation or unemployment schemes (80 persons enrolled in 2015)
• Won awards for customer service and support (Retailer of the Year in Norway, top customer-friendly sports retail chain in Norway)

Governance Achievements

• Established Code of Conduct and Corporate Responsibility Guidelines, training all employees
• Implemented Supplier Code of Conduct
• Internal system for whistleblowers

Climate Goals & Targets

Environmental Challenges

• Meeting stakeholder expectations and own goals to avoid brand and market position damage
• Maintaining cost efficiencies
• Adapting to increased scrutiny, legislative changes, and increased sustainability requirements
• Climate change impacts on sales seasons, trading patterns, and accessibility of goods
• Potential for significant adverse environmental effects

Mitigation Strategies

• Integrating sustainability into daily operations
• Improving market position by satisfying demand for product quality, transparency, human rights, and healthy lifestyle products
• Reducing energy and material consumption, recycling, and waste reduction
• Centralized business model for better risk governance and adaptation
• Improving energy efficiency and minimizing waste
• Working with established procedures and processes for environmental work
• Integrating sustainability issues into risk management and internal control systems

Supply Chain Management

Supplier Audits: 80 fabric and site audits in 2015

Responsible Procurement

• XXL Supplier Code of Conduct
• Due diligence of new suppliers
• Audits during supplier visits
• Cooperation with local agent in China for audits
• Agreement with Norwegian partner for improved control of manufacturing chain
• Ethical audits based on ETI base code and SA8000 or Sedex (SMETA)

Climate-Related Risks & Opportunities

Physical Risks

• Temperature changes, drought, floods, rapidly changing weather conditions affecting sales seasons, trading patterns, and transportation

Transition Risks

• Increased scrutiny, legislative changes, and increased sustainability requirements

Opportunities

• Growing market for electric bikes
• Increased demand for climate-friendly and green products

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: LEED Gold (Skanssi building, Finland)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Retailer of the Year (Norway, 2015)
• Top customer-friendly sports retail chain (Norway, 2015)
• Top ten most admired company (Norway, 2015)
• LEED Gold (Skanssi building, Finland)

Environmental Metrics

ESG Focus Areas

• Environmental impacts (transportation, waste, electricity)
• Supplier assessment
• Employee training and education
• Product safety
• Community engagement

Environmental Achievements

• 70% of total waste recycled (1% improvement from 2015)
• Upgraded 4 stores in Norway with LED lighting and energy monitoring systems in 2016 as part of a 3-year plan to upgrade all Norwegian stores.
• 70% of goods in Norway delivered through central warehouse in 2016, reducing transportation needs.

Social Achievements

• Introduced new training programs for employees in established stores and a leadership training program for Sales Leaders.
• 250 persons enrolled in a facilitated employment scheme in 2016, with around 100 securing employment contracts.
• XXL Children’s Foundation donated USD 125,000 to “Projecto UERE” in Rio, Brazil.

Governance Achievements

• Implemented a new risk assessment scheme for all purchasers, including a specific registration form.
• Developed and implemented a new version of the store concept including new recycling stations for customers and employees.
• Implemented a new online chemical database for storing, reviewing and updating material safety data sheets.

Climate Goals & Targets

Environmental Challenges

• Outsourcing transportation to third parties presents challenges in monitoring emissions and sustainability efforts.
• Managing waste effectively across all locations.
• Ensuring compliance with product safety regulations and avoiding hazardous substances.
• Maintaining high ethical standards throughout the supply chain.

Mitigation Strategies

• Closely monitoring logistics partner Bring's sustainability efforts and their progress towards reducing CO2 emissions.
• Implementing centralized waste management systems and recycling routines.
• Developing and implementing the XXL ER framework for environmental requirements and the XXL ER Chemical list.
• Conducting supplier audits and implementing a Supplier Code of Conduct.

Supply Chain Management

Supplier Audits: 90 fabric and site audits in 2016, 146 pre-shipment inspections (PSI) in 2016.

Responsible Procurement

• XXL Supplier Code of Conduct, environmental requirements framework (XXL ER), ethical audits based on ETI base code and SA8000 or Sedex (SMETA) standards.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions affecting accessibility of goods and transportation, impacting sales seasons.

Transition Risks

• Changes in consumer demand for climate-friendly products.

Opportunities

• Growing market for electric bikes, energy efficiency improvements, new business opportunities from increased demand for green products.

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Number one customer-friendly sports retail chain in Norway (Norsk Kundebarometer 2016), Chain store of the year in Linköping, Sweden (Handelsgalan 2016), Best in class in Swedish sport retail industry on sustainability (Råd och Rön 2016), Most preferred retailer among top athletes in Norway (Aktiv Livsstil 2016-2017), Best in customer service in Swedish sport retail industry (market.se 2016).

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Social Responsibility
• Product Safety
• Healthy Lifestyle
• Consumer Protection
• Data Security
• Community Involvement
• Supplier Responsibility
• Human Rights

Environmental Achievements

• Change of lighting in Norwegian stores gave more than 30 per cent lower power consumption.
• Introduction of fee on plastic shopping bags gave a 30 percent drop in volume.
• 70 per cent of total waste recycled.
• New store concept introduced with recycling stations and digital price tags reducing paper and cardboard consumption.
• Return service for used ski equipment introduced, with old equipment donated to charity.

Social Achievements

• 36 talents completed the XXL Talent program.
• Improved whistleblowing routine and raised awareness about #metoo campaign.
• Strengthened HSE work across the Group, with intensive training for Swedish store managers and safety representatives.
• XXL Children’s Foundation donated USD 200,000.
• Introduced new training programs for employees.

Governance Achievements

• Improved internal control and testing procedures of products.
• Established two new guides related to products sold by XXL that suppliers have to follow.
• Updated Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• Meeting stakeholder expectations and own goals to avoid brand and market position suffering.
• Maintaining cost efficiencies.
• Climate change affecting sales seasons, trading patterns, goods accessibility, and transportation.
• Potential risks of significant adverse environmental effects from operations and supply chain.

Mitigation Strategies

• Improving market position by satisfying demand for product quality, transparency, human rights, and healthy lifestyle products.
• Reducing energy and material consumption, recycling, and waste reduction.
• Integrating sustainability into daily operations.
• Developing energy-efficient solutions, implementing renewable energy sources, and benchmarking between stores.
• Detailed environmental requirements framework for suppliers.
• Centralized business model and control over value chain to govern risks and adapt to changes.

Supply Chain Management

Supplier Audits: 92 factory and site audits, 141 preshipment inspections (119 by third party)

Responsible Procurement

• Supplier Code of Conduct
• Environmental requirements framework (XXL ER)
• Ethical audits based on ETI base code and SA8000 or Sedex (SMETA) standards
• Due diligence of new suppliers on environmental criteria, labor practices, human rights, and social impact.

Climate-Related Risks & Opportunities

Physical Risks

• Temperature changes
• Drought
• Floods
• Rapidly changing weather conditions affecting sales seasons, trading patterns, and transportation.

Transition Risks

• Changes in consumer demand for climate-friendly products.

Opportunities

• Growing market for electric bikes
• Waste and energy reduction saving money and increasing cost efficiency
• Increasing demand for climate-friendly and green products.

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Voted number one customer friendly sports retail chain in Norway (Norsk Kundebarometer).

Environmental Metrics

ESG Focus Areas

• Good working environment and attractive jobs
• Sustainable products and circular business models
• Sustainable production and value chain
• In-house Climate and environmental impacts

Environmental Achievements

• 84.2% share of waste recycled (increased by 3.5% from 2020)
• Reduced transport related emissions significantly
• Opened a third central warehouse in Austria, reducing emissions related to downstream transportation to the Austrian operation.
• Increased the share of renewable energy through solar power plants on store rooftops in Finland and Sweden.

Social Achievements

• Donation of NOK 600,000 by XXL Children's Foundation to “Bring Children From Streets” project.
• 3300 days of on-site training provided to employees.
• Continued efforts to strengthen inclusion and diversity.
• Introduced internship programs for those on rehabilitation or unemployment arrangements.

Governance Achievements

• Adopted an XXL Code of Conduct and implemented compliance training programs for all employees and board members.
• Established whistleblowing channels and procedures.
• Initiated a process to establish an Integrity Due Diligence Survey to map and collect input from suppliers.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the global Covid-19 pandemic and acute weather events.
• Increased costs and a more closed society due to global events.
• Low share of females in top management levels.
• Microplastic pollution from textile products.

Mitigation Strategies

• Implemented supply chain management tools, risk assessment, processes and governance procedures to assess climate risk.
• Adapted and adjusted business quickly to changing circumstances.
• Strategic approach to reach gender equality targets by 2030, including systematized recruitment process, training and leadership development programs.
• Working to increase the use of natural fibers in textile products and reduce the share of oil-based synthetic polymers.

Supply Chain Management

Supplier Audits: 73 factory and on-site audits in 2021, plus 40 improvement audits; 565 pre-shipment inspections

Responsible Procurement

• XXL Supplier Code of Conduct
• XXL ER (Environmental Requirements) framework
• Integrity Due Diligence Surveys

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Extreme weather conditions
• Supply chain disruptions due to extreme weather

Transition Risks

• Regulatory changes related to climate change mitigation
• Carbon pricing developments
• Producer responsibility schemes
• Technological development

Opportunities

• Transition to a more circular society
• Development of energy-efficient products
• Efficient logistics and transportation systems
• Renewable energy sources (solar power)

Reporting Standards

Frameworks Used: GRI Standards

UN Sustainable Development Goals

• SDG 3: Good health and well-being
• SDG 5: Gender equality
• SDG 8: Decent work and economic growth
• SDG 10: Reduced inequalities
• SDG 12: Responsible consumption and production
• SDG 15: Life on land
• SDG 17: Partnerships for the goals

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Products with a focus on quality, durability, and reparability
• Increased use of recycled materials

Awards & Recognition

• Industry winner in Sustainable Brand Index™ 2021 in Norway (Clothes & Fashion - Stores)

Environmental Metrics

ESG Focus Areas

• Human Rights
• Labor Rights
• Sustainability
• Anti-Corruption

Social Achievements

• Donated NOK 3 million worth of winter and sports clothing and equipment to support the people of Ukraine.
• Partnership with BUA (Barn, Unge, Aktivitet) to promote inclusivity and physical activity.

Governance Achievements

• Established a Group Ethics & Compliance Officer (ECO) and Ethics & Compliance Associates (ECAs) in each operational unit.
• Developed a module-based e-learning program on compliance with rules and guidelines.
• Implemented a whistleblowing channel for reporting concerns.

Climate Goals & Targets

Environmental Challenges

• Identified high-risk suppliers based on country of origin and product category.
• 8 out of 37 surveyed suppliers did not complete the due diligence survey.
• Red-flagged subjects identified in the supplier due diligence survey (e.g., missing policies, risk of child labor, forced labor, harassment, discrimination, violation of employment agreements, insufficient living wage, lack of grievance mechanisms, inadequate health and safety measures).

Mitigation Strategies

• Developed a common due diligence concept with the Norwegian Sporting Goods Industry (SBF) and other industry players.
• Conducted a supplier integrity due diligence survey.
• Developed an action plan to follow up with high-risk suppliers, including setting goals, action plans, and follow-up measures.
• Will sanction suppliers who fail to comply with requirements and standards.
• Will audit supplier agreements to ensure compliance.
• Will establish a revised template for supplier and third-party agreements.
• Will address claims for compensation for damages.
• Will continue SBF cooperation through a dedicated Contact Committee.
• Will conduct due diligence of other business partners in 2023.

Supply Chain Management

Supplier Audits: 37 suppliers surveyed in 2022, 76 OEM suppliers audited by agent

Responsible Procurement

• Supplier Code of Conduct
• Declaration of Compliance
• Anti-Corruption Guidelines

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: OECD Due Diligence Guidance for Responsible Business Conduct

Awards & Recognition

• Most sustainable brand in Norway in the “Clothes & Fashion – Stores” category in the Sustainable Brand Index 2023.