Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental impact of fast fashion
• Social issues in the textile supply chain
• Governance and transparency in the fast fashion industry

Environmental Achievements

• Inditex committed to using 100% recycled cotton and polyester and 100% sustainable linen before 2025.
• H&M pledged to be climate positive by 2035 and developed innovative materials using natural waste products.
• Uniqlo invested in new technologies in denim production to cut water usage by 99% and CO2 emissions by 85%.

Social Achievements

• H&M, Primark, Inditex, and Uniqlo offered full transparency of their supplier lists.
• Industry leaders transformed relationships with suppliers, encouraging them to improve employee conditions.
• Boohoo, under pressure, promised to commit to higher standards of governance and transparency after revelations of sweatshop conditions.

Governance Achievements

• Inditex tied its CEO’s objectives directly to sustainability.
• Increased transparency and disclosure of supply chain information by leading retailers.

Climate Goals & Targets

Environmental Challenges

• Poor working conditions and low wages in the textile supply chain.
• High injury rates in the textile industry.
• Environmental impact of increased clothing production (water, energy, chemicals, waste).
• Consumer reluctance to pay a premium for sustainably produced garments.
• Overproduction rate in brand operations estimated at 20%.

Mitigation Strategies

• Industry leaders are adopting more sustainable business practices and improving transparency.
• Companies are developing sustainable materials and more efficient processes.
• Increased automation in logistics operations.
• Investment in new recycling methods and second-hand online stores.
• Engagement with companies to encourage improvements.

Supply Chain Management

Responsible Procurement

• Full transparency of supplier lists by leading retailers
• Encouraging suppliers to improve employee conditions

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• SDG 1: No Poverty
• SDG 3: Good Health and Well-being
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 15: Life on Land

The report highlights how improvements in the fast fashion industry can contribute to these SDGs.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Deforestation
• Human Rights
• Biodiversity
• Governance

Environmental Achievements

• Expanded Responsible Investment Policy to include Climate Change, Deforestation, and Human Rights Policies.
• Increased percentage of companies in Comgest Portfolios classified as "aligning" with Net Zero targets from 35% to 48% of listed-equity AUM.
• Engaged with companies representing 48% of financed emissions through climate engagement program.
• Developed internal assessment methodology to measure impact and dependency of investee companies on nature.
• Launched a three-year engagement program to engage with 22 investee companies exposed to high deforestation-related risks (10.6% of AUM).

Social Achievements

• Improved Health and Safety performance of investee companies through engagement.
• Successful engagement with BB Segurdade resulting in the election of a new female independent board member.
• Continued support for The Comgest Foundation, funding 11 new projects and continuing support for multi-annual projects, totaling €427,342 in donations.

Governance Achievements

• Expanded Responsible Investment Policy to include Climate Change, Deforestation, and Human Rights Policies.
• Reviewed and updated Active Ownership Policy.
• Onboarded collaborative initiatives including Nature Action 100+, IIGCC, and a French investor-led initiative supporting GHG emissions avoidance factors database development.
• 94% of public funds AUM classified as Article 8 under SFDR.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (implied in Climate VaR analysis)
• Industry-wide concerns of abusive behavior in the music industry (Universal Music Group case study)
• Governance concerns and lack of transparency in some investee companies (Fortnox case study)
• Deteriorating workforce KPIs (turnover, sick leave, fatalities) in some investee companies (DSV case study)
• Potential human rights abuses in the NEOM project in Saudi Arabia (DSV case study).

Mitigation Strategies

• Developed alternative sourcing strategies (implied in Climate VaR analysis)
• In-depth review of ESG policies and implementation of new policies.
• Enhanced ESG tools and processes to align with sustainable finance regulations and investor expectations.
• Engagement with investee companies to address concerns and improve practices.
• Divestment from companies that continually fail to appropriately manage climate-related risks.
• Implementation of a Group-level Exclusion Policy targeting high-risk sectors and practices.
• DSV committed to direct hiring of workers and conducting due diligence on third-party recruitment agencies for NEOM project.

Supply Chain Management

Responsible Procurement

• Code of Conduct
• Supplier sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding

Transition Risks

• Regulatory changes
• Market shifts
• Carbon pricing

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: PRI, TCFD, SFDR, NZAM