Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Circular Economy
• Diversity & Inclusion

Environmental Achievements

• 75% of assortment made of more sustainable materials
• 195 tonnes of old textiles collected, 85% for reuse
• 62% of factories (by business volume) report environmental data via Higg FEM
• 10% of factories (by business volume) report climate data via STICA module
• 17% reduction in total emissions compared to the 2016/17 base year (after recalculation)

Social Achievements

• Launched new People Strategy focusing on employee wellbeing and diversity
• Established an education center for women in Bangladesh, with 1000 women completing the program in 2021
• Signed the new International Accord for workers' safety
• Employee Survey Score shows high loyalty (83) and increased satisfaction and motivation (77)

Governance Achievements

• New position of Vice President Sustainability added to executive management team
• Launched 'Kappahl Sustainability Commitment for All Business Partners' replacing the Code of Conduct
• One incident of violation of Ethical Guidelines leading to employee dismissal

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 and geopolitical instability
• Lack of transparency in the supply chain
• Dependency on fossil fuels in the supply chain
• Development of new, more sustainable fibers and production technologies
• Access to reliable sustainability data
• Creating simple and attractive solutions for more sustainable fashion consumption

Mitigation Strategies

• Strategic integration of climate roadmap with growth plan
• Collaboration with Sustainable Apparel Coalition (SAC) and Higg Index
• Membership in Ethical Trading Initiative (ETI) and Swedish Textile Initiative for Climate Action (STICA)
• Supplier evaluations and follow-up visits
• Development of circular design principles and collaboration with rental services
• Transparency Pledge membership
• Investing SEK 200 million in digital transformation

Supply Chain Management

Supplier Audits: 234 reviews and follow-up visits/year

Responsible Procurement

• Kappahl Sustainability Commitment for All Business Partners
• Supplier evaluations
• Higg Index use
• ETI guidelines compliance

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, droughts, storms, heat waves

Transition Risks

• Climate-related legislation, changed customer preferences

Opportunities

• Closer collaboration with STICA, changed customer behavior, sustainable offers, new revenue streams from resale/rent/repair

Reporting Standards

Frameworks Used: GRI Standards: Core

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Kay/day circular design collection
• Minories brand
• Products made with Circulose®

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Design
• Supply Chain
• Organization & Stores
• Consumption

Environmental Achievements

• 3% reduction of climate emissions per produced product
• 80% of our assortment is made in more sustainable material
• 10% Factories representing 10% of our business volume report climate data via the STICA module
• 79% Factories representing 79% of our business volume report environmental sustainability data via the Higg Facility Environmental Module (FEM)
• Awarded the Environmental Strategy Award for our sustainability strategy

Social Achievements

• Signed the Pakistan Accord for workers safety
• Launched innovation dress, another step in the development of slow fashion
• Kappahl’s plus-size assortment XLNT is celebrating 25 years
• Continued work with the training center for women in Bangladesh
• More than 1000 women have gone through the training since the start of the center in 2009

Governance Achievements

• Committed to SBTi Science-based targets
• Invested in internal capabilities for supply chain traceability, product and service innovation, and employee education
• Finalized partnership with TrusTrace for better supply chain visibility

Climate Goals & Targets

Environmental Challenges

• Access to more sustainable production technologies
• Climate-efficient, high-quality fibre-to-fibre recycling
• Access to reliable data showing sustainability performance for different fibres and processes
• Promoting progress on human rights such as living wages, forced labour and gender equality
• Lack of transparency in the supply chain
• Dependency on fossil energy in the entire supply chain
• Transforming a homogenous workplace to a diverse one
• Enabling every employee’s unique contribution to sustainability work
• Increasing innovative capabilities to create sustainable and profitable solutions
• Industry’s lack of inclusive fashion with sound ideals
• Creating simple and attractive solutions for more sustainable fashion consumption
• Inspiring sustainability communication
• Ensuring prolonged lifetime of garments

Mitigation Strategies

• Working with the Higg Index tools to follow-up on greenhouse gas emissions
• Being a founder and board member of the Swedish Textile Initiative for Climate Action (STICA)
• Having a climate reduction roadmap
• Committing to set a long-term science-based target to reach net-zero value chain GHGs emissions by no later than 2040
• Intensifying collaboration with suppliers on transitioning to energy-efficient technology and renewable energy
• Encouraging suppliers to attend climate action training
• Working to increase the percentage of certified wood-based materials
• Supplier evaluations twice a year
• Regular reviews at factories and suppliers
• Ongoing dialogue about sustainability with all suppliers
• Implementing TrusTrace traceability software
• Developing a concept and toolbox for sustainability communication

Supply Chain Management

Supplier Audits: 222 factory reviews and follow-up visits in 2022

Responsible Procurement

• Sustainability Commitment (previously Code of Conduct)
• Supplier Evaluations
• Sustainability Dialogue
• Higg Index tools
• Membership in SAC, ETI, Bangladesh Accord, Pakistan Accord, STICA, Transparency Pledge

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, droughts, storms, heat waves, food scarcity

Transition Risks

• Changed customer preferences, policy-related risks (climate-related legislation), loss of access to supply chains

Opportunities

• Closer collaboration with STICA; changed customer behaviour/product care guidelines; sustainable offers; new revenue streams from resale/rent/repair

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Innovation dress
• Kay/day collection with spindyed fabrics

Awards & Recognition

• Environmental Strategy Award

Environmental Metrics

ESG Focus Areas

• Climate & Environment
• Social Sustainability
• Transparency & Engagement

Environmental Achievements

• 15% reduction of climate emissions since new baseline year 2022
• 86% of our assortment is fabrics made with less environmental impact than conventional one
• All Kappahl and Newbie denim trousers are traceable from garment to fibre from Fall/Winter season 2023

Social Achievements

• Launched second-hand sales venture in stores in Norway and Sweden
• Employee Loyalty score of 84 and Satisfaction and Motivation score of 78
• 88% of employees feel they contribute to Kappahl Group’s sustainability work

Governance Achievements

• Implementation of the TrusTrace tool in December 2023 to all suppliers
• Developed a new training for employees on anti-corruption
• Kappahl was honored with the “Fashion Company of the Year” award at the Market Awards

Climate Goals & Targets

Environmental Challenges

• Decarbonization of the supply chain
• High return rates and routines for returned goods in online shopping
• Data gaps in microplastics emissions

Mitigation Strategies

• Implementation of transparency to decarbonize the supply chain and the transition to a circular business model
• Offering free returns only in stores
• Applying the precautionary principle in relation to chemicals and safety and carrying out regular quality and safety tests

Supply Chain Management

Supplier Audits: 205 factory reviews and follow-up visits/year

Responsible Procurement

• Sustainability Commitment (previously Code of Conduct)
• Annual Sustainability Dialogue
• Supplier Evaluations

Climate-Related Risks & Opportunities

Physical Risks

• Intensifying droughts, storms, heatwaves, and food scarcity

Transition Risks

• Changed customer preferences, policy-related risks as climate-related legislation increases, lack of access to supply chains

Opportunities

• Transition to renewable energy, energy efficiency improvements

Reporting Standards

Frameworks Used: GRI Standards

Third-party Assurance: Independent sustainability consultant review; background data not audited

Sustainable Products & Innovation

• Modular dress with 12 styling options
• Denim trousers traceable from garment to fiber

Awards & Recognition

• Fashion Company of the Year at the Market Awards