Fossil Group, Inc.
Climate Impact & Sustainability Data (2021, 2022)
Reporting Period: 2021
Environmental Metrics
Total Carbon Emissions:254,800 tCO2e/year (Scope 1, 2, and 3 combined)
Scope 1 Emissions:3,510 tCO2e/year
Scope 2 Emissions:370 tCO2e/year
Scope 3 Emissions:250,920 tCO2e/year
Total Energy Consumption:33,489,000 kWh/year
Water Consumption:2,825,000 m3/year (estimated)
ESG Focus Areas
- Climate Change
- Diversity, Equity & Inclusion
- Supply Chain Responsibility
- Community Engagement
- Employee Well-being
- Governance
Environmental Achievements
- Achieved partial traceability in handbag and small leather goods categories (10% of total vendor base)
- Over 25% of packaging contains recycled materials; 20% is recyclable or reusable
- Sourced 3 MWh of power from clean energy
- Rolled out take-back program to 30% of retail stores in Europe and Asia
- 100% of leathers from nominated matrix used in handbags/SLGs, watches, and jewelry are from tanneries supporting responsible manufacturing via the Leather Working Group
Social Achievements
- 14% increase in female leadership
- Added DE&I goals to Executive Leadership Team performance reviews and compensation plans
- 100% score on Human Rights Campaign Corporate Equality Index
- Fossil Foundation positively impacted over 2.6 million underserved youth
- 73% score on Women’s Empowerment Principles Assessment
- 1% of Fossil.com e-commerce sales goes to Fossil Foundation
Governance Achievements
- Established a comprehensive Privacy Compliance Program
- Zero business ethics audit findings in 2021
- Annual review of climate-related risks and opportunities by the Board of Directors
- DE&I goals make up 7.5% of performance objectives for senior leadership team's year-end performance reviews
Climate Goals & Targets
Long-term Goals:
- Achieve Net-Zero GHG emissions by 2040
Medium-term Goals:
- Halve emissions by 2030
- Use 100% circular packaging (recyclable and/or reusable)
Short-term Goals:
- Double the adoption of clean energy sources with operations and suppliers in three years
- Engage 100% of direct suppliers to meet water stewardship policy
- Achieve 95% traceability of suppliers and processing units on raw materials
- Design 100% of owned brand products with recycling in mind
- Achieve 30% environmentally-friendly materials in owned brand products and packaging
- Fully roll out global take-back program
Environmental Challenges
- Supply chain disruptions due to the COVID-19 pandemic
- Measuring footprint reductions, particularly for raw materials sourced from suppliers
- Climate change risks including supply chain disruption, raw material availability and cost, and increased frequency and intensity of weather events
- Challenges in achieving full traceability across all product categories
Mitigation Strategies
- Developed science-based targets aligned with the 1.5° Celsius scenario of the Paris Agreement
- Implemented a digital tool to track energy consumption and carbon emissions
- Strengthened collaborations with suppliers on decarbonization, water quality, and chemical usage
- Routinely review locations for climate impact vulnerability and work with partners to mitigate risks
- Developed a Water Stewardship Policy and engaged 87 Tier 1 suppliers in environmental initiatives
Supply Chain Management
Supplier Audits: 100% of Tier 1 suppliers audited in 2021
Responsible Procurement
- Manufacturer’s Agreement including Code of Conduct
- Social Compliance Program
- Supplier compliance training
- Worker Hotline program
- Self-assessment forms for new suppliers
- On-site social compliance audits
Climate-Related Risks & Opportunities
Physical Risks
- Hurricanes
- Floods
Transition Risks
- Regulatory changes
- Market shifts
Opportunities
- Transition to clean energy
- Development of energy-efficient products
Reporting Standards
Frameworks Used: GRI, SASB, TCFD, UNGC
Sustainable Products & Innovation
- Products using recycled, ocean-bound, and bio-based plastics
- Products using Litehide™ leather
Reporting Period: 2022
Environmental Metrics
Scope 1 Emissions:777 tCO2e/year
Scope 2 Emissions:8,207 tCO2e/year
Scope 3 Emissions:217,157 tCO2e/year
Renewable Energy Share:20%
Total Energy Consumption:30,854 MWh/year
Water Consumption:134,000 m3/year
Waste Generated:1,626 tons/year
Carbon Intensity:5.3 tCO2e/USD million revenue
ESG Focus Areas
- Climate Change
Environmental Achievements
- Increased Litehide™ leather usage in leather goods by 35%, reducing emissions by 6400 MT CO2eq.
- 20% of electricity sourced from renewable energy in EMEA region.
Social Achievements
- Launched a circular business model in EMEA, collecting >700 watches for refurbishment and resale in the first 3 months.
Governance Achievements
- Established an ESG Council chaired by the CEO with dual reporting lines to the Executive Leadership Team and the Audit Committee.
Climate Goals & Targets
Long-term Goals:
- Net-zero emissions by 2050 (implied).
Medium-term Goals:
- Reduce 85% Scope 1 + 2 emissions by 2030.
- Achieve 95% emission reduction by switching all tin boxes to recycled aluminum boxes by 2030.
- Have >35% of leather materials in leather goods sourced from low-carbon materials by 2030.
Short-term Goals:
- Double renewable energy usage by 2025 (2021 baseline).
Environmental Challenges
- Emerging climate-related regulations (e.g., SEC, EU CSRD) increasing direct costs.
- Increased cost of raw materials due to potential climate-related tariffs (e.g., CBAM).
- Shifting consumer preferences towards low-impact products.
Mitigation Strategies
- Investing in a new technology solutions platform and human capital for improved data management.
- Implementing a supply chain sustainability program to engage with suppliers on lower-impact materials and processes.
- Switching to low-carbon alternative materials (e.g., Litehide™ leather, recycled packaging).
Supply Chain Management
Supplier Audits: 60% of suppliers by number (covering 85% of manufactured goods) engaged in 2022.
Responsible Procurement
- Supply chain sustainability program established in 2022.
- Data collection on environmental performance, manufacturing processes, and raw materials from suppliers.
Climate-Related Risks & Opportunities
Physical Risks
- Extreme weather events impacting operations and supply chain.
Transition Risks
- Emerging regulations
- Increased cost of raw materials
- Market shifts towards low-carbon products
Opportunities
- Increased demand for low-impact products
- Returns on investment in low-emission technology (renewable energy).
Reporting Standards
Frameworks Used: Greenhouse Gas Protocol
Third-party Assurance: No third-party verification or assurance
Sustainable Products & Innovation
- Litehide™ leather
- Recycled aluminum packaging