Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced gross total CO2e emissions under scope 1 and 2 by approximately 16% on the previous year and approximately 44% on the year 2019/20 at three UK sites.
• Developed and widely distributed ranges of ‘Eco Plush’ toys (soft fabric and filled toy products manufactured from 100% recycled materials), presented in plastic-free packaging.
• Used FSC certified wood in the production of wooden toy ranges and cardboard packaging.

Social Achievements

• Maintained a collaborative and caring culture for its employees, resulting in strong work ethic and long-term staff retention.
• Actively supported various charities focusing on children's welfare, particularly for disabled children.
• Conducted reviews of suppliers to ensure compliance with ethical standards and prevent modern slavery.

Governance Achievements

• Appointed Jonathan Shearman as an additional independent, non-executive director.
• Published an ESG report to identify and measure key areas of focus for ESG initiatives.
• Regularly reviewed company policies to strengthen standards and practices in line with global governance landscape.

Climate Goals & Targets

Environmental Challenges

• Shipping and container shortages, high freight rates, adverse movements in the Sterling to US Dollar exchange rate, rising inflation, and dampened consumer demand.
• Continued production and operational stoppages/interruptions in China due to local COVID-19 lockdowns and outbreaks.
• Continued container shortages in, and significantly reduced shipping capacity from, China.

Mitigation Strategies

• Conscious decision to bring stock in early.
• Management of foreign exchange risk with forward foreign exchange contracts and other derivative financial instruments.
• Swift and focused action by the Group’s management and teams to mitigate adverse effects of supply chain disruptions.

Supply Chain Management

Supplier Audits: Annual audits and reviews are conducted to ensure compliance with ethical standards.

Responsible Procurement

• Ethical Policy and Code of Conduct applicable to staff and suppliers.
• Requirement for suppliers to comply with ICTI, SMETA or BSCI ethical audit schemes.

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 15: Life on land

The Group’s sustainability initiatives align to these UN SDGs.

Sustainable Products & Innovation

• Eco Plush toys

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced gas consumption by 5%
• Reduced LPG emissions by 36%
• Reduced electricity consumption by 27%
• Lees Brook Mill produced 13% of the electricity it consumed from solar power
• Purchased 100% renewable electricity for all UK sites

Social Achievements

• Maintained strong employee relationships and loyalty
• Supported various charities including The Toy Trust, The Fence Club, The Variety Club, Kingfisher Learning Trust, Ovacome, and In Kind Direct
• Global employee step challenge to raise funds for charity

Governance Achievements

• Regularly reviewed company policies to strengthen standards and practices
• Active member of the British Toy and Hobby Association (BTHA) and ICTI Ethical Toy Program
• Continued to conduct reviews with suppliers to prevent modern slavery

Climate Goals & Targets

Environmental Challenges

• Continued curtailment of consumer spending
• Concerns over cost-of-living increases
• Suez Canal closure lengthening shipping times and reducing freight capacity
• Ongoing conflicts in the Middle East disrupting the global supply chain
• Cybercrime
• Information technology disruptions
• Supplier management and quality control issues
• Competition
• Changes in legislation and regulation
• Foreign currency fluctuations
• Environmental regulations

Mitigation Strategies

• Successful implementation of operational cost efficiencies
• Reductions in storage costs in Scandinavia
• Efficient marketing
• Maintaining a well-trained IT team and strong software protections
• Regular staff training and cyber-attack response consultancy and insurance
• Regular back-ups of IT systems and processes to restore critical services
• Using a wide range of suppliers and operating through local offices in Hong Kong and China
• Seeking manufacturing capacity in other Asian countries
• Policies and procedures for supply chain management and product development
• Close involvement with representative bodies in the toy industry
• Adapting production processes in compliance with legislative changes
• Maintaining substantial product liability and product recall insurance
• Reducing new plastics in packaging
• Managing foreign exchange risk with forward foreign exchange contracts and derivative financial instruments
• Formal adoption of a focused environmental policy
• Requiring all suppliers to understand and adopt environmental policy requirements

Supply Chain Management

Supplier Audits: Annual audits and reviews

Responsible Procurement

• Ethical Policy and Code of Conduct
• Compliance with ICTI, SMETA, or BSCI ethical audit schemes
• Prohibition of forced or child labor
• Requirement for FSC certified packaging and/or products

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GHG Protocol

Certifications: FSC Chain of Custody

Third-party Assurance: Beyondly Global Limited

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 15: Life on land

Sustainability initiatives align with these goals through various actions such as equal opportunities policies, sustainable packaging, renewable energy use, and FSC certified materials.