VITALITY & RESPONSIBILITY DECLARATION OF EXTRA-FINANCIAL PERFORMANCE 2018 4, boulevard de Mons - 59650 Villeneuve d’Ascq developpement-durable.decathlon.com CHALLENGES PEOPLE & PRODUCTS & STRATEGIES MANAGEMENT & SERVICES 3.......EDITORIAL 21 ....PUTTING PEOPLE 45 ...DELIVERING INNOVATION AT THE HEART AT EVERY LEVEL 4.......DECATHLON IN FIGURES OF OUR GROWTH 49 .... EXPANDING 6.......2018 HIGHLIGHTS 26 ....READY FOR RESPONSIBILITY ECO-DESIGN 8.......OUR BUSINESS MODEL AND FREEDOM FOR OUR PRODUCTS 10 .... OUR MAIN 31 ....DEVELOPING 54 ... OFFERING PRACTICAL EXTRA-FINANCIAL RISKS SKILLS AND AND ECO-FRIENDLY SERVICES .... UNCOVERING TALENT 12 OUR NEW 59 ....CREATING SAFE, MATERIALITY ANALYSIS 35....DELIVERING HEALTH HIGH-QUALITY PRODUCTS 14 ....OUR SUSTAINABLE AND SAFETY DEVELOPMENT AMBITIONS 38....ATTRACTING, 2015-2019 REWARDING AND MOTIVATING 16 ....OUR CLIMATE COMMITMENT TEAMMATES INDICATORS & 41 ....DECATHLON FOUNDATION: METHODOLOGY ACCESS TO EMPLOYMENT RESPONSIBILITY THROUGH SPORT IN PRODUCTION STORES & TRANSPORT 99...... OUR PERFORMANCE INDICATORS 120 ... SUSTAINABLE DEVELOPMENT GOALS CROSS-REFERENCE TABLE ... 64 MAINTAINING LONG-TERM 122 ... METHODOLOGICAL NOTE RELATIONSHIPS 126 ... CONFIRMATION 70 .... PUTTING OF PARTICIPATION PEOPLE FIRST 81 ....ECO-DEVELOPING AND REPORT OUR GLOBAL NETWORK 76 .... ROLLING OUT ON THE FAIRNESS ENVIRONMENTAL 85.... SUPPORTING OF THE INFORMATION LOCAL COOPERATION MANAGEMENT 128 ... LIST OF 90.... OPTIMISING OUR ENERGY 2018 STAKEHOLDERS AND WASTE MANAGEMENT 94.... TRANSPORTING OUR PRODUCTS AND ENCOURAGING ECO-MOBILITY 2 CHALLENGES & STRATEGIES PEOPLE & MANAGEMENT PRODUCTS & SERVICES RESPONSIBILITY IN PRODUCTION STORES & TRANSPORT INDICATORS & METHODOLOGY CHALLENGES EDITORIAL "THE HORIZON RETREATS AS In October 2018, a report from the IPCC2 found that the collective agreement to limit global warming to 2°C would not be honoured without massive collective YOU APPROACH, efforts. We now have just 11 years to combat climate change if we want to AND THAT IS LIVING & STRATEGIES preserve our world's biodiversity. The past year was marked by a realisation: the sense of urgency is palpable, our fellow citizens are aware of the new challenges PROOF THAT WHEN to society, and individuals are expected to behave responsibly. At Decathlon, we WE WORK HARD, must be even more determined in our mobilisation to contribute to limiting this ecological crisis. WE CAN ONE DAY Nothing will be possible if we do not balance the three P's: People, Planet and REACH A PLACE Profit: one of these cannot advance at the expense of another. We are now THAT SEEMED seeing that performance cannot only be measured in financial terms and, at the same time, that everyone wants to make a real difference and play an active UNREACHABLE role in protecting the environment and helping to further human progress. YESTERDAY" That is why we worked in 2018 to integrate sustainable development into the IRWIN, PADDLEBOARDER, criteria for determining our share value. As part of this effort, we worked with HENDAYE (FRANCE) our stakeholders again this year to determine together our priority challenges through a materiality analysis. At Decathlon we have always believed in working together, reflected in our values, “Vitality and Responsibility”. Now we are making this an integral part of our passion for sport and including it in our purpose: "To sustainably make the pleasure and benefits of sport accessible to the many” The commitments we made this year will help us step up these efforts at every level of the company. First, we made the environmental impact of our products visible: the eco-design team trains and supports the design teams as they assess their products so that we can deliver this transparency for our customers through environmental labelling. We committed to increasing our use of sustainably sourced cotton and polyester when manufacturing our products in an effort to further reduce their environmental impact. As for energy consumption, we joined the RE1003 initiative and committed to using 100% renewably-sourced electricity for all our distribution and logistics activities by 2026 in every country where we operate. If we want to significantly improve our carbon footprint, we must look to the source of our impact. That is whywe provide on-the-ground support to our suppliers: we work with them to identify areas where they could be more energy efficient and to develop action plans that will help them reduce local pollution and their greenhouse gas emissions. A commitment to ensuring that all our suppliers respect human rights across the entire value chain has been part of our 86% Social Charter since 2003. This ongoing collaborative work significantly improved management practices, with 82%4 of OF RANK 1 PRODUCTION 65% 50% our suppliers receiving A, B or C ratings for their working conditions at the end of 2018, 28% more than in 2017. OF OUR TEAMMATES SITES WERE GIVEN A, B or C OF SPORTS RATINGS FOR THEIR HUMAN ENJOY COMING TO RESPONSIBILITY Our current structure is country-based and some of the countries are vast and full of contrasts: different climates, different USERS DELIGHTED WORK EVERY DAY IN PRODUCTION seasons, different cultures and, at times, a wide range of sporting needs. We are gradually pivoting to a network-based (24% MORE THAN IN 2017) organisation of autonomous yet interdependent urban clusters. Because they are close to their communities and their 1,157 SOCIAL AUDITS 2018 neighbours, our teammates are always willing to take bold steps to be more effective. That is vital for issues like the circular ENVIRONMENTAL economy, for one, but also when it comes to getting the local community involved or putting on one of our thousands LABELLING: of local events, like World Clean Up Day. By implementing a role-based structure5 and offering training in sustainable development, we help ensure that more and more teammates are incorporating these skills into their work. Whether in 30.1% 7.9 kg stores, warehouses or service jobs, our teammates can all spearhead new initiatives in their workplaces. OF DECATHLON CO2 EQ. PER 69.4% 1 OF RANK 1 PRODUCTION SITES WERE WORKING TOGETHER TO MAKE THE WORLD A BETTER PLACE AND SHARE OUR PASSION FOR SPORT. PRODUCTS PRODUCT SOLD GIVEN A, B or C RATINGS FOR THEIR 16% IN 2017 -2,5% SINCE 2016 ENVIRONMENTAL MANAGEMENT THE DECATHLONIANS 3 1. 2018 Autumn-Winter season. 2. IPCC: Intergovernmental Panel on Climate Change. 3. www.there100.org 4. Rank 1 and Rank 2. 5. See page 28 CHALLENGES & STRATEGIES PEOPLE & MANAGEMENT PRODUCTS & SERVICES RESPONSIBILITY IN PRODUCTION STORES & TRANSPORT INDICATORS & METHODOLOGY BREAKDOWN OF TEAMMATES BY GEOGRAPHIC AREA AS OF 31/12/2018 EUROPE DECATHLON OVER 1,511 AND RUSSIA 67.3% IN FIGURES STORES WORLDWIDE ILNIS LITHANIA AS OF 31/12/2018* ASIA NTREAL IENNA IN 869 URBAN CLUSTERS CANAA ASTRIA INCHEN STH REA *All figures appearing in CRINTHE this report are as of 31/12/2018. 168 MORE THAN IN 2017 25% GREECE LE CAIRE AMERICAS EGT AAR HN ENH SENEGAL CLOMBO 3.3% SRI LANA CAIA NAIRI INSHASA ENA AFRICA R CNG 69 AND MIDDLE EAST kg WAREHOUSES SANTIAG 7.9 4.1% CHILI CO2 EQ. PER AND LOGISTICS DECATHLON LOCATIONS IN OCEANIA NEW CITIES IN PRODUCT SOLD PLATFORMS NEW COUNTRIES -2,5% SINCE 2016 51 COUNTRIES 0.3% +12 12 65% OPENINGS IN NEW 168 96,002 275 MILLION STORE TEAMMATES OF SPORTS COUNTRIES IN 2018 46.9% WOMEN SPORTS USERS IMPACTED OPENINGS AND 53.1% MEN USERS 27 OPENINGS IN NEW IN 2018 BY OUR PRODUCTS COUNTRIES SINCE 2016 +16.8% MORE THAN IN 2017 DELIGHTED BREAKDOWN OF TEAMMATES BY AGE BREAKDOWN OF TEAMMATES BY ACTIVITY AS OF 31/12/2018 AS OF 31/12/2018 €11.3 SORT SERICES NDER EARS VITALITY & RESPONSIBILITY RESPONSIBILITY & VITALITY 45 6.5% 85 PARTNER BILLION 4.6% EARS AND OLDER EARS DESIGNRODCTION RETAIL AND DEFP2018 DECATHLON SUPPLIERS IN TURNOVER 2.% 63.4% 5.2% SERICES BRANDS 10 MORE THAN IN 2017 (EXCL. VAT) 76.7% EARS EARS LOGISTICS DECATHLON +4.6% COMPARED WITH 20171 6.9% 23.% .6% 4 5 1. At constant exchange rates. CHALLENGES & STRATEGIES PEOPLE & MANAGEMENT PRODUCTS & SERVICES RESPONSIBILITY IN PRODUCTION STORES & TRANSPORT INDICATORS & METHODOLOGY IN 2018, 86% O F R A N K 1 PRO DU C TIO N S ITE S CONDUCTING OUR WERE GIVEN A, B or C RATINGS A 2018 MATERIALITY 50% FOR THEIR HUMAN RESPONSIBILITY DECREASE IN ANALYSIS IN PRODUCTION (24% MORE THAN IN 2017) HIGHLIGHTS AIR TRANSPORT TO SHIP OUR PRODUCTS 1,157 SOCIAL AUDITS 2018 COMMITMENT 52.5% 69,4% OF RANK 1 PRODUCTION SITES TO THE OF DECATHLON WERE GIVEN A, B or C RATINGS TEAMMATES FOR THEIR ENVIRONMENTAL 12 NEW RE100 ARE EMPLOYEE OPENINGS INITIATIVE SHAREHOLDERS1 IN 12 COUNTRIES MANAGEMENT OR 49,503 TEAMMATES WORLDWIDE ECO-DESIGN, MATERIALS SELECTION: VALIDATION 1,200 COTTON POLYESTER OF OUR FIRST 3 76% 17.2% VIGILANCE WCUD AND 20,000 SUSTAINABLY- SUSTAINABLY- EVENTS PARTICIPANTS SOURCED COTTON SOURCED POLYESTER PLAN HELD LOCALY WORLDWIDE 37.7% MORE THAN IN 2017 83% MORE THAN IN 2017 ENVIRONMENTAL JOINED THE LABELLING: -2.5% GLOBAL CREATING A SUSTAINABLE INTENSITY OF VITALITY & RESPONSIBILITY RESPONSIBILITY & VITALITY 30.1% CO2 EMITTED BY FASHION OF DECATHLON DEVELOPMENT TRAINING QUANTITY OF DEFP2018 2 AGENDA PRODUCTS PROGRAMME FOR OUR TEAMMATES PRODUCT SOLD 2020 CIRCULAR FASHION 16% IN 2017 IN 2018 SYSTEM COMMITMENT DECATHLON COMPARED WITH 2016 6 7 1. In the countries where the process does take place for Decathlon. 3. WCUD = World Clean Up Day 2. 2018 Autumn-Winter season. CHALLENGES & STRATEGIES PEOPLE & MANAGEMENT PRODUCTS & SERVICES RESPONSIBILITY IN PRODUCTION STORES & TRANSPORT INDICATORS & METHODOLOGY OUR