Global Fashion Group

Climate Impact & Sustainability Data (2019, 2020, 2021, 2022, 2023)

Reporting Period: 2019

Environmental Metrics

ESG Focus Areas

Ethical Trade
Environment
Community
Responsible Workplace

Environmental Achievements

THE ICONIC achieved Advanced status in its annual report submission to the Australian Packaging Covenant Organisation, indicating specific, measurable targets in place or tracked data showing >20% of products achieved desired outcomes.
Lamoda recycled over 90% of waste in its Russian warehouse.
THE ICONIC introduced LED lighting across its warehouse, resulting in a 2.5% reduction in energy consumption despite almost doubling warehouse storage capacity.
Dafiti's new warehouse in Minas Gerais, designed with environmentally conscious principles, will have a 60% reduction in energy usage compared to its Sao Paulo warehouse.

Social Achievements

THE ICONIC partnered with Thread Together, distributing clothing to people in need and engaging in employee volunteering and fundraising, helping 15,000 people.
Lamoda donated RUB 3,491,708 (€50,000) to a charity supporting children with cerebral palsy.
THE ICONIC and Dafiti held training sessions for suppliers to improve their capacity to meet ethical standards.
Dafiti requires all suppliers to become a certified member of ABVTEX.

Governance Achievements

Formalized governance structure for sustainability with a Sustainability Committee of the Supervisory Board, GFG Group Sustainability Committee, and Regional Sustainability Committees.
Developed a comprehensive policy framework for agency workers, including operating procedures and a SpeakUp! hotline.
No known incidents of bribery or corruption during 2019.

Climate Goals & Targets

Short-term Goals:

50% of private label factories to participate in training programs by 2022.
100% of private label water footprint mapped and plans in place to reduce impact by 2022.
100% of regions to have a sustainable fashion edit by 2022.
100% of top 30 brands engaged on sustainability and minimum sustainability onboarding criteria by 2022.
100% of waste from warehouses comprehensively tracked and at least 50% recycled by 2022.
100% of carbon mapped and Science Based Targets set for the entire Group by 2022.
100% of carbon from own operations and deliveries offset by 2022.
100% of delivery countries using order satchels made from more sustainable materials by 2022.
50% of regions enabling resale of pre-loved items by 2022.
100% of regions to have a charity partnership in place by 2022.

Environmental Challenges

Imbalance in emphasis on Ethical Trade and Responsible Workplace pillars historically, needing a more holistic approach.
Need to build an accurate baseline across the business for waste and recycling.
Significant carbon impacts requiring more carbon efficiency.
Need for a more comprehensive approach to end-of-life product management.
Need to formalize community engagement approach.

Mitigation Strategies

Adopting a more holistic and comprehensive approach to managing sustainability across all four pillars.
Developing a strategic plan covering all four pillars with widespread engagement.
Implementing a carbon management plan to minimize carbon impacts.
Conducting a comprehensive analysis of materials used in own-brands to understand key environmental impacts.
Developing a framework for community engagement and entering charity partnerships.

Supply Chain Management

Supplier Audits: 498 factories audited; Tier 1 audits required before trading commences; re-audits at least every 24 months.

Responsible Procurement

Supplier Code of Conduct based on international norms, UN Guiding Principles, Universal Declaration of Human Rights, ILO Declaration, and ETI Base Code.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Luxembourg Law of 23 July 2016 on the Publication of Non-financial Information and Information on Diversity A156, German Sustainability Code (DNK), International Finance Corporation Performance Standards, United Nations Sustainable Development Goals, The Fashion Pact, United Nations Global Compact

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:1.25 million tonnes of CO2e (2019)

Scope 1 Emissions:9,963 tCO2e (2019)

Scope 2 Emissions:20,478 tCO2e (2019)

Scope 3 Emissions:1,221,368 tCO2e (2019)

Renewable Energy Share:93% in ANZ (2020)

Carbon Intensity:36kg CO2e per order (2019), 7.5kg CO2e per order excluding product-related emissions (2019)

ESG Focus Areas

People
Planet
Responsible Workplace
Diversity, Inclusion & Belonging
Ethical Trade
Environment
Community
Governance, Risk & Compliance

Environmental Achievements

75% waste recycled (exceeding 2022 target of 50%)
100% of operating countries covered by carbon footprint assessment
100,000+ orders delivered by low or zero emissions channel for the last mile
100% post-consumer recycled content in ANZ delivery satchels
65% of delivery countries using more sustainable order packaging

Social Achievements

148 suppliers and factories trained on ethical trade framework
209 factory audits conducted remotely
790 tonnes of food donations delivered in Colombia
100% of fulfillment centers & eProduction have COVID-19 minimum safe work practices & policies
100% office-based employees enabled to work from home

Governance Achievements

100% of Regions, Group Shared Functions and Management Board trained on Capital Markets Compliance
Lamoda received ISO 37001 Anti-Corruption Management System certificate

Climate Goals & Targets

Long-term Goals:

Not disclosed

Medium-term Goals:

100% of Group-wide Science Based Targets set
100% of carbon from own operations and deliveries offset
100% of delivery countries using more sustainable order packaging
100% of waste tracked in fulfillment centers and transit warehouses
80% of waste recycled in fulfillment centers and transit warehouses
50% of regions with resale of pre-loved items

Short-term Goals:

100% of own-brand water footprint mapped and plans in place to reduce impact
15% of own-brand products made from sustainable materials
100% of top 30 brands engaged on sustainability
10% of sales (NMV) from fashion & lifestyle assortment that meet sustainable product criteria

Environmental Challenges

COVID-19 pandemic impacting operations and supply chain
Limited availability of sustainable packaging materials in some markets
Immature consumer recycling infrastructure in some markets
Challenges in tracking and reporting on carbon emissions from complex delivery networks

Mitigation Strategies

Established a global response team and implemented minimum safety standards across fulfillment centers and eProduction studios
Developed remote audit model for suppliers
Improved information to customers on recycling
Developed a bespoke carbon footprint tool and invested in data collection
Launched pilot projects for low-emission deliveries using EVs and walking deliveries

Supply Chain Management

Supplier Audits: 209 remote audits conducted in 2020

Responsible Procurement

Supplier Code of Conduct
Factory audits before commencing production
Remediation periods for non-compliances
Training programs for suppliers

Climate-Related Risks & Opportunities

Physical Risks

Extreme weather events impacting operations or suppliers

Transition Risks

Changes in cost and accessibility of materials due to climate change

Opportunities

Transition to renewable energy
Reduction of carbon footprint

Reporting Standards

Frameworks Used: Luxembourg Law of 23 July 2016 on the Publication of Non-financial Information and Information on Diversity A156, UN Sustainable Development Goals (SDGs)

Certifications: ISO 37001 (Lamoda)

UN Sustainable Development Goals

Various SDGs are mentioned throughout the report in relation to specific initiatives.

The report maps its initiatives to relevant UN SDGs.

Sustainable Products & Innovation

Origin by ZALORA (Tencel™)
AERE (ANZ own-brand made exclusively from preferred materials)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:1.24 million tonnes of carbon dioxide equivalent (CO2e)

Scope 1 Emissions:12,388 tCO2e

Scope 2 Emissions:3,412 tCO2e

Scope 3 Emissions:1,225,146 tCO2e

Renewable Energy Share:100% for fulfilment centres

Total Energy Consumption:18.6 million kWh

Carbon Intensity:519 tonnes of CO2e per million NMV

ESG Focus Areas

Climate Action
Circularity & Conscious Consumption
Fair & Ethical Sourcing
Diversity, Inclusion & Belonging
Responsible Workplace
Responsible Business

Environmental Achievements

Achieved climate neutrality across all of GFG’s operations and the sourcing of 100% green electricity for our 9 fulfilment centres
80% waste from GFG’s warehouses diverted from landfill
22% reduction in carbon intensity

Social Achievements

Launched dft social, a one-stop volunteering platform that enables employees in all LATAM countries to conveniently access volunteering opportunities from NGO partners. More than 600 employees participated in 2021.
Introduced low emission delivery options to customers in Hong Kong and Indonesia
Created an adaptive fashion edit in ANZ to better serve communities with disabilities

Governance Achievements

Introduced short term incentive metrics related to delivery of sustainability targets to the Management Board in 2021
Refreshed our Business Conduct & Ethics Programme, including our Code of Conduct and Speak-Up and Non-Retaliation Policy
Published its first Modern Slavery Statement in ANZ, in line with the Australian Modern Slavery Act 2018

Climate Goals & Targets

Long-term Goals:

90% reduction in Scope 3 GHG emissions per million Net Merchandise Value (NMV) by 2030 from a 2019 base year
50% reduction in Scope 1 & 2 emissions by 2030 from a 2019 base year
50% of own-brand materials are traceable to the raw material
90% workers in Tier 1 factories can access an effective in-factory worker dialogue mechanism
100% of own-brand water footprint mapped and plans in place to reduce impact
100% brands meeting GFG’s human rights standards for brands
100% purchase orders placed in line with responsible purchasing practices
100% Tier 1 factories assessed against living wages benchmarks where they exist
100% workers in Tier 1 factories can access an independent grievance mechanism
100% of the top 30 brands engaged on sustainability and minimum sustainability onboarding criteria for new brands operational
100% of employees agree they ‘feel a sense of belonging where they can be their true authentic selves at work’
50/50 Gender balance in GFG Executive team & at least 1 female member on Management Board
100% of senior leaders will participate in diversity & inclusion awareness training
100% of countries where we operate operationalise GFG’s Fair Treatment of Suppliers Policy
100% of countries where we operate have operationalised the GFG Conflicts of Interest Policy
100% of professional skilled employees will have training & awareness on Business Ethics, depending on their role and function
100% of countries where we operate operationalise the GFG Responsible Marketing Promises & Principles
100% of countries where we operate operationalise the GFG Product Governance Policy
100% of countries where we operate have operationalised the GFG Political Involvement Policy
20,000 employee hours spent on community engagement

Medium-term Goals:

100% of employees have access to company healthcare and well being services
100% of Labour Service Agencies meet the GFG standards (reviewed annually)
ZERO permanent disability or fatality of our employees performing their duties in the workplace

Short-term Goals:

100% of Senior Leaders complete quarterly safety walks & talks in all key operations
80% of our employees “agree that wellbeing is a priority at GFG”
100% of directly employed delivery riders and drivers complete regular road safety training

Environmental Challenges

Complexities in the material supply chain impacting the target of 15% of own-brand products made from at least 50% sustainable materials
Limited electric vehicle infrastructure in some markets
Immature waste and recycling infrastructure in many of GFG’s countries

Mitigation Strategies

Developed a preferred material carbon calculator to enable own-brand designers to take into consideration product carbon footprint during the product development stage
Increased the use of electric vehicles (EVs) and other lower carbon alternatives for last mile customer delivery
Improved understanding of product waste and implemented efforts to reduce returns

Supply Chain Management

Supplier Audits: 506 audits in 2021

Responsible Procurement

Supplier Code of Conduct
Responsible purchasing practices
Preferred Material Vendors (PPVs)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Luxembourg Law of 23 July 2016 on the Publication of Non-financial Information, Information on Diversity A1561, Article 8 of the EU Taxonomy Regulation, United Nations Sustainable Development Goals (SDGs), Sustainability Accounting Standards Board (SASB)

Certifications: ISO 37001 (Lamoda)

UN Sustainable Development Goals

Goal 7
Goal 8
Goal 9
Goal 10
Goal 12
Goal 13
Goal 15
Goal 16
Goal 17

Areas of focus mapped to UN SDGs

Sustainable Products & Innovation

Own-brand products made from preferred materials
Adaptive fashion collections

Awards & Recognition

7th position for Dafiti out of 50 brands in the Brazilian Fashion Revolution Transparency Index

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:416,826 tCO2e/year

Scope 1 Emissions:108 tCO2e/year

Scope 2 Emissions:0 tCO2e/year

Scope 3 Emissions:416,718 tCO2e/year

Renewable Energy Share:55% of electricity usage

Total Energy Consumption:4,993 MWh/year (renewable energy certificates purchased)

Waste Generated:2,558 tons/year

ESG Focus Areas

Climate Action
Circularity & Conscious Consumption
Fair & Ethical Sourcing
Diversity Inclusion & Belonging
Responsible Workplace
Responsible Business

Environmental Achievements

Absolute carbon emissions reduced by 29% since 2019.
Maintained 100% green energy sourcing for fulfilment centres for the third year running.
Exceeded 2030 target to divert 90% of waste from landfill (achieved 91%).
1.2 million orders delivered by low-emission methods in SEA and LATAM.

Social Achievements

74% of employees agree they would recommend GFG as a great place to work.
Launched pre-loved assortment via Marketplace in ANZ, now available in eight countries.
Company values updated to ensure diversity and inclusion are core.
Implemented ‘Guide to Conducting a Health & Safety Walk & Talks’ with senior leaders globally.
Dafiti achieved ISO 37001 Anti-bribery Management Systems certificate in Brazil; ZALORA achieved it in Singapore and Malaysia.

Governance Achievements

20% of executive short-term incentive tied to progress against specific sustainability goals.
Joined Textile Exchange and continued strategic partnership with Global Fashion Agenda.

Climate Goals & Targets

Long-term Goals:

Net zero emissions by 2050 (target to be reviewed and updated in 2023)

Medium-term Goals:

50% of sold units covered by take-back solution by 2030
40% of sold units from fashion assortment made in line with circular criteria by 2030
90% of workers in Tier 1 factories can access an effective in-factory worker dialogue mechanism by 2030
100% of workers in Tier 1 factories can access an independent grievance mechanism by 2030
100% of brands on our platforms meeting our ‘Human Rights Standards for Brands’ by 2030
100% of own brand purchase orders are placed in line with responsible purchasing practices by 2030
70% of the electricity used in our Tier 1 and 2 own brand factories renewable by 2030
20,000 employee volunteering hours by 2030

Short-term Goals:

65% of Senior Leaders complete quarterly safety “walks & talks” in all key operations by 2025
100% of employees have access to extended company healthcare and wellbeing services by 2025

Environmental Challenges

Circular assortment remains nascent at 3%.
Only 6% of brands meet human rights standards.
Challenges with recycling providers in Chile (low landfill diversion rate).
Limited options in the market for waste diversion in SEA.
Accessing preferred materials in a scalable way.

Mitigation Strategies

Developing guidelines and tools for implementation across the Group.
Conducting pilot programs to test suitability and effectiveness of new strategy.
Developing policies and frameworks to support consistent reporting on targets.
Building reporting systems to support new targets and drive automation of data collection.
Identifying a new recycling provider for Chile.
Exploring food composting systems and engaging with additional waste collection providers in SEA.
Working towards an aligned sourcing strategy for materials and fabric consolidation in ANZ and SEA.
Using an independent third-party benchmark tool to categorize preferred materials.

Supply Chain Management

Supplier Audits: All Tier 1 factories audited before production and at periodic intervals thereafter

Responsible Procurement

Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

Riverine flood risk in ANZ

Transition Risks

Regulatory changes, market shifts

Opportunities

Development of energy-efficient products

Reporting Standards

Certifications: ISO 37001 (Dafiti in Brazil, ZALORA in Singapore and Malaysia), ISO 45001 (SEA operations in Malaysia and Indonesia)

Sustainable Products & Innovation

Inspira own brand (LATAM)

Awards & Recognition

Zero-waste certification for LEAP fulfilment centre (Brazil)

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:296,687 tCO2e (location-based), 294,501 tCO2e (market-based)

Scope 1 Emissions:218 tCO2e/year

Scope 2 Emissions:5,043 tCO2e/year (location-based), 2,857 tCO2e/year (market-based)

Scope 3 Emissions:291,426 tCO2e/year

Renewable Energy Share:51% of total energy consumption

Total Energy Consumption:9,207 MWh/year

Waste Generated:2,149 tons/year

Carbon Intensity:230 tCO2e/mill. NMV

ESG Focus Areas

Climate Action
Circularity & Conscious Consumption
Fair & Ethical Sourcing
Diversity, Inclusion & Belonging
Responsible Workplace
Responsible Business

Environmental Achievements

91% of waste in operations diverted from landfill
83% of directly purchased and own brand packaging made from more sustainable materials
16% NMV from products made using majority sustainable materials and/or eco-production methods

Social Achievements

Launched THE ICONIC X FNFD Incubator Program in Australia, a nine-month program in partnership with First Nations Fashion + Design
Extended company healthcare and wellbeing services to 100% of employees
Zero permanent disability or fatality of employees performing their duties in the workplace

Governance Achievements

Refreshed and relaunched the Conflict of Interest Policy
90% of professional skilled employees received Code of Conduct training
Zero reported instances of bribery

Climate Goals & Targets

Long-term Goals:

Net zero emissions by 2050

Medium-term Goals:

Halve absolute Scopes 1 and 2 footprint by 2030
Achieve significant reductions in Scope 3 intensity-based footprint by 2030

Short-term Goals:

Achieve 100% renewable energy usage across all fulfillment centers and offices by 2030

Environmental Challenges

Supply chain disruptions due to various factors including the war in Ukraine and the closure of operations in Argentina
Limitations in local recycling infrastructure affecting waste diversion targets
Data challenges in accurately measuring the environmental impact of third-party brands' products

Mitigation Strategies

Strategic refinement of targets, streamlining from 35 to 27 impactful targets
Exploring alternative sourcing strategies for packaging materials
Collaborating with brands and suppliers to improve data collection and reporting on sustainability credentials

Supply Chain Management

Supplier Audits: 82 own brand Tier 1 factories audited

Responsible Procurement

GFG’s Supplier Code of Conduct
Responsible Purchase Practices Framework

Climate-Related Risks & Opportunities

Physical Risks

Extreme heat
Riverine floods
Cyclones
Landslides
Water scarcity
Coastal floods

Transition Risks

Carbon pricing
Regulations impacting marine and aviation industry
Customers’ demand for green products
Technology risk and opportunity
Circularity and sustainability in procurement
Reputation opportunity
Climate change-related reputation impact

Opportunities

Low carbon land transportation
Technology deployment for reducing emissions
Sustainability and greener brand

Reporting Standards

Frameworks Used: Luxembourg Law of 23 July 2016 on the Publication of Non-financial Information, Information on Diversity A1561, Article 8 of the EU Taxonomy Regulation, SASB standards, UN Sustainable Development Goals

Certifications: ISO 45001 (Malaysia, Indonesia, Philippines)

UN Sustainable Development Goals

SDG 7
SDG 9
SDG 10
SDG 12
SDG 13
SDG 15
SDG 16
SDG 17
SDG 3
SDG 5
SDG 8

Table 1 in the report details the alignment of GFG's PPP strategic priorities with the UN SDGs.

Awards & Recognition

Dafiți Chile awarded by the Chilean Safety Association for its dedication to worker safety