How Are We Measuring Up? CONTENTS

Pentland Group Corporate Responsibility Review 2012

2012 2011 2010

CORPORATE RESPONSIBILITY: How are we Measuring up? CONTENTS

About Pentland Group 04

About this Review 06

Chairman’s introduction 08

About CR at Pentland 10

Products 16

Environment 22

Ethical trade 28

Our people 34

CR 2012 Community 40

03 Portfolio Global reach

Year in which today’s Pentland Group was Through our wholly-owned subsidiary The Group holds a variety of other Pentland Group and Pentland Brands founded, then called Pentland Brands we manage sports, shareholdings, including a 57% stake in have headquarters in London, UK. the Liverpool Shoe outdoor and fashion brands including JD Sports Fashion plc, which operates Within the UK, we also have offices in Company Berghaus, Boxfresh, brasher, ellesse, JD Sports, Bank, Blacks, Millets, Nottingham, Reddish, Sunderland and 1932 KangaROOS, Mitre, Prostar, Red Scotts, Size?, Champion, Chausport Wakefield, and distribution centres in or Dead, and Speedo. We also hold and Sprinter stores, and manages Blackburn and Sunderland2. licenses to make footwear for Lacoste brands including Brookhaven, Carbrini, About and Ted Baker globally, as well as Diadora, Duffer, Fila, Kooga, Kukri, Pentland was one of the pioneers OVER Kickers in the UK and Ireland. In Mckenzie, Nanny State and Sonetti. in Hong Kong, forming a sourcing September 2012 we added to our company in the early 1960s. We portfolio with the acquisition of the maintain a significant presence in Pentland rugby brand Canterbury. Hong Kong, and now have offices 12,000 in five more of our major Asian sourcing markets: China (Shenzhen), work for Pentland Group India (Chennai), Indonesia (Jakarta), Thailand (Bangkok) and Vietnam (Ho Group Chi Minh City). With the addition of 10,400 Canterbury, we also have bases in people are employed Australia and New Zealand. Pentland Group is a family-owned, UK-based by JD Sports Fashion company that focuses primarily on the apparel Nearly 2,000 people work directly for and footwear industries. Pentland Group and Pentland Brands globally2. A further 10,400 people are Founded in 1932 in Liverpool, UK, by Berko NEARLY employed by JD Sports Fashion, most and Minnie Rubin, Pentland was originally of them in retail. Read more about our people on page 34. called the Liverpool Shoe Company and traded purely in shoes, first as a wholesaler before expanding into manufacturing. We celebrated our 80th anniversary in 2012. 2,000 people work for In 2011 the business reported consolidated Pentland Brands global turnover of £1.5 billion, with sales in around 195 countries across Europe, the Americas, Asia, the Middle East, Africa and Australasia1.

1 2011 financial figures are the latest available. 2 This includes Canterbury.

04 05 UN Global Compact Ten Principles

Ethical Trade, page 28 Our People, page 34 This Review presents Pentland This Review comprises our 2012 Group’s approach to being a communication on progress to the Ethical Trade, page 28 responsible business and our United Nations Global Compact Human rights corporate responsibility activities (UNGC), an initiative for businesses during the 2012 calendar year. that are committed to aligning their Labour rights operations and strategies with ten 1. Businesses should It covers the companies and brands universally accepted principles in the support and respect Businesses should Businesses wholly-owned by Pentland Group3. areas of human rights, labour, the the protection of 3. uphold the freedom 4. should uphold the Where appropriate it includes environment and anti-corruption. internationally of association elimination of all information relating to JD Sports As part of our UNGC membership, proclaimed human rights and the effective forms of forced Fashion, in which Pentland Group we have committed to reporting recognition of the and compulsory holds a significant stake but does not annually on our progress in each Businesses should make right to collective labour exercise direct management control4. of these ten areas. 2. sure that they are not bargaining complicit in human rights abuses

Products, page 16 Environment, page 22 About Reporting ON OUR Environment 7. Businesses should 5. Businesses should 6. Businesses should this PROGRESS support a precautionary uphold the effective uphold the elimination approach to environmental abolition of child of discrimination in challenges labour respect of employment THIS YEAR and occupation Review 8. Businesses should undertake initiatives to promote greater About CR at Pentland, page 10 environmental responsibility Anti-corruption

Businesses should Businesses should work against 9. encourage the 10. corruption in all its forms, development and diffusion including extortion and bribery of environmentally 3 For the purposes of this Review, Canterbury is included within the scope of JD Sports Fashion, unless otherwise stated. Pentland acquired Canterbury from JD in September 2012 and Canterbury will be included within the scope of Pentland Brands’ reporting from 2013 onwards. friendly technologies 4 JD also reports separately on its corporate responsibility activity through its Annual Report and Accounts.

06 07 Chairman’s introduction CELEBRATING We are proud to have celebrated we are keen to find ways to make governmental organisations, to find Pentland’s 80th anniversary in 2012. our products more environmentally sustainable solutions to today’s social What began as a small family shoe sustainable, something that will and environmental challenges and to business in 1932 has grown into a be necessary in a resource- be ready for those of the future. multinational Group of companies. constrained world. As we have grown, so too have our With the publication of this Review, responsibilities – in particular, those Our future business success also rests which comprises our latest relating to our global supply on attracting and retaining the right communication on progress to the chain and, within it, the people who people. We are delighted that Pentland United Nations Global Compact, I have make our products. Brands was recently ranked 16th in pleasure in once again renewing our the Great Place to Work® list of the commitment to the initiative and its Passing this milestone gives us the best large employers in the UK, but ten responsible business principles. 80 opportunity to reflect on our corporate we know we must not rest on our years OF responsibility efforts, successes and laurels. Generation Y employees challenges over the previous eight are joining our business and they, BUSINESS decades. Throughout this time, we have more than any before them, expect been committed to doing business the their employer to be ethically and right way, and our approach to CR has environmentally responsible. 1932-2012 constantly evolved. To achieve our CR objectives we must When we formed our CR team in the look outside our walls, to collaborate mid-1990s, it focused almost entirely and learn from others. Within our on ethical trade – working with our business, we see great value in brands on robust sourcing processes knowledge sharing between our Group R Stephen Rubin and forming the right partnerships to companies and brands. Within our Chairman, Pentland Group plc support progress in improving working industry, companies – competitors conditions. This continues to be a – are increasingly working together, priority. Now, as we look to the future, and in partnership with expert non-

08 09 Pentland Brands CR priorities

Products Objective: To reduce the impact of our products on the environment

Approach to CR Priorities: About CR + Sustainable materials at Pentland Brands 01 + Sustainable packaging + Restricted substances management + Supply chain environmental footprint at Pentland + Product end-of-life management We focus our CR activity on four strategic areas: product sustainability, Corporate responsibility (CR) has long been a fundamental part of Pentland’s reducing our environmental footprint, Objective: To reduce the approach to doing business. We are committed to taking steps that improve ethical trade, and support for charities Environment environmental impact of our working conditions in our supply chain and reduce the impact of our activities and community organisations. business operations on the environment. We are committed to making progress Priorities: in all these areas, paying particular attention to our most material issues of 02 + Facilities energy use/ product sustainability and ethical trade. carbon footprint Pentland Group policies These are the areas in which we can + Business travel carbon footprint make the most significant changes, + Water use and that pose the greatest potential risk + Waste and recycling to our business. We expect everyone who works + Employment Standards Policy: sets + Environmental Policy: states for Pentland Group to do business out our commitment to respect and our position on minimising the Ethical Trade Objective: To conduct business honestly, fairly and with respect for the right way. Our standards and protect the health, safety and rights environmental impacts of our people, their dignity and their rights expectations are outlined in our at work of our employees and our products and operations, while Group Business Standards Policies5, suppliers’ employees safeguarding the health and safety which are provided to everyone of our employees and the public. Priorities: who works for Pentland Group and + Code of Employment Standards 03 + Robust ethical trade processes Pentland Brands when they join the for Suppliers: specifies our Our Ethics and Integrity Policy + Long-term supplier relationships business. expectations for business partners’ further clarifies our expectations for + Improving working conditions treatment of the workers who make employees’ conduct and behaviour, The policies include: our products. It is consistent with and our zero tolerance approach + Code of Business Conduct: makes the Ethical Trading Initiative Base to bribery and corruption. We clear our expected standards of Code and globally-recognised encourage employees to report any International Labour Organization concerning behaviour by talking to behaviour towards employees, Objective: To contribute standards their line manager or the Human Community customers, suppliers and the wider positively to the communities community Resources department, or by calling in which we operate a confidential helpline.

Priorities: 04 + Product donations 5 For the purposes of these Codes, ‘Group’ means those businesses which are wholly or majority owned by Pentland Group plc or its subsidiaries and + Fundraising over which we exercise direct management control. In respect of businesses where Pentland Group has a material interest but does not exercise direct management control, and in respect of businesses operating in the USA, we shall use our reasonable endeavours to seek compliance, where appropriate, + Employee volunteering with these Codes by the relevant business.

10 11 CR management and governance Engaging employees on CR

Pentland Brands’ corporate Pentland Group Chairman, Stephen The success of our corporate We have developed a short responsibility team is based in Rubin, takes a strong personal responsibility activities relies on video that introduces Pentland’s London, Hong Kong and Shenzhen. interest in CR and is a recognised the involvement of employees from commitment to being a responsible It manages CR initiatives in advocate for improving workers across the business. Most commonly business, outlines the CR strategy, partnership with colleagues from rights in the supply chain. involved are our brands’ product and encourages employees to play across the business. Working The Chairman has oversight of all designers, developers and sourcing a role. Launched in October 2012, closely with representatives from Pentland Group’s CR activities. teams, whose collaboration is it is shown to all new starters as each brand and facility enables Within Pentland Brands, the Chief essential for product sustainability part of the induction process. the team to ensure that Pentland Operating Officer is responsible and ethical trade progress. Everyone standards are applied consistently, for overseeing the successful who works for Pentland has a role Also new for 2012 was a biannual and to share examples of good implementation of the company’s to play in meeting our environmental internal newsletter aimed at raising practice and information about new CR strategy and for raising and community objectives. employees’ awareness about collaboration opportunities. Other relevant issues with the CEO our latest product sustainability Group companies manage their own and at Board meetings. We work to engage all employees and ethical trade activity, and the london CR activity, with advice and support globally about why CR is important, environmental and community from Pentland Brands’ CR team what we do, and how they can get initiatives taking place at our offices where required. involved. In July and October 2012, worldwide. This is complemented by 65 new UK-based employees regular blog posts about recent CR received an introduction to CR as part activities, as well as resources on of a new series of quarterly induction the company intranet. days (see Our people, page 34), while SHENZHEN a further 37 people attended four CR inductions at our Asian offices. We also ran CR refresher sessions for existing brand employees at our London head office.

External stakeholders

Hong kong We see considerable value in Throughout the year we also receive collaborations that support CR enquiries about CR-related issues progress at Pentland and within our from customers and consumers. industry more broadly. We work with During 2012, enquiries most industry groups and non-governmental frequently related to our ethical trade organisations to share experiences and commitment and processes, the resources and ensure we are up-to-date chemicals used in the manufacture with CR trends. See overleaf for details of our products (especially for of our key strategic collaborations. waterproofing), and the responsible sourcing of down.

12 13 Fair Factories Clearinghouse (FFC)

A non-profit organisation that supports companies’ ethical Key strategic collaborations trade efforts through the use of software to facilitate better factory data management and collaboration with peers. We joined FFC in 2012 and began using its database to store our factory assessment reports, corrective action plans, United Nations Global Compact and supporting documentation and photographs. Using FFC will enable us to better manage and report on continuous (UNGC) improvement in our supply base.

A UN initiative that helps businesses align their operations and strategies with ten universally accepted principles on human rights, labour rights, the environment, and anti-corruption. In Kind Direct Pentland Group is signatory to the UNGC, and reports annually on progress relevant to each of the ten principles (through this An organisation that redistributes surplus goods from Review). We are also a member of UNGC’s UK Network. manufacturers and retailers to UK charities working at home and abroad. Through In Kind Direct, nearly 700 charitable organisations – including child and youth care, disability support, and family welfare charities – received donations of Pentland products in 2012.

Better Work Sustainable Apparel Coalition (SAC) An industry-wide group of over 80 apparel and footwear brands, An International Labour Organization and International Finance retailers, suppliers and non-governmental organisations Corporation collaboration that aims to improve compliance with working to reduce the environmental and social impacts of labour standards, and competitiveness, in global supply chains. apparel and footwear products. Pentland is one of the SAC’s Having signed Better Work’s International Buyer Principles in founder members and contributed to the development of 2010, we became a Better Work Buyer Partner in 2012. its product sustainability measurement tool, the Higg Index, launched in 2012.

World Federation of the Sporting Goods Industries (WFSGI)

Ethical Trading Initiative (ETI) An independent, non-profit association that represents the sporting goods industry, and supports and coordinates industry Established in 1998, ETI brings together companies, trade collaboration in areas such as CR, trade and intellectual unions and non-governmental organisations to improve property. Pentland Group Chairman, Stephen Rubin, is Honorary the lives of workers around the world. Pentland Brands is a President of the WFSGI and Pentland Brands’ CEO is an longstanding member and an active participant in several ETI active board member. Pentland Brands sits on several WFSGI working groups. We report annually to ETI on our ethical trade committees, including the Corporate Social Responsibility progress and plans. Committee, of which it is a Vice Chair.

14 15 Pentland Brands’ products include apparel, footwear, sports and outdoor equipment, and accessories. We look for opportunities to reduce environmental impacts across the whole product lifecycle, with a view to helping us meet customers’ and consumers’ growing demand for more sustainable products, and to comply with relevant legislation. Looking for more sustainable raw Products materials and more efficient ways to manufacture and ship products also helps safeguard against future shortages of natural resources.

We take a bespoke approach to promoting our product sustainability priorities across Pentland Brands, tailoring our activity to suit each brand’s product range, resources and customer base.

17 Raw materials Restricted substances

Manufacturing our brands’ apparel Leather is a major component of our already Leather Working Group We give our designers and helps to ensure that products are representatives from each Pentland and footwear products requires brands’ footwear. We are members members. The brand encourages its manufacturers the guidance they safe to use and comply with relevant brand to share restricted substances significant volumes of leather, rubber of the Leather Working Group, which other existing tanneries to join, and need to avoid the use of any regulations, and helps protect good practice and discuss legislative and synthetic materials and, to a lesser measures the environmental impact considers Leather Working Group potentially harmful substances environmental and worker health at changes. This group met three times extent, cotton. We are investigating of tanneries and encourages them membership as a positive factor in Pentland Brands’ products. our suppliers’ manufacturing sites. in 2012. the use of materials that have a lower to reduce these impacts. Lacoste when sourcing new leather suppliers. Compliance with our restricted We released a revised edition of environmental impact than conventional is Pentland’s largest leather user Lacoste is also investigating substances policy and relevant laws this document in September 2012. Pentland Brands is a member of the materials, but that are still cost- by volume and is committed to the opportunities to improve the efficiency and regulations is a condition of Pentland’s brands have each received Apparel and Footwear International effective, high quality and deliver the responsible use of leather. Around with which its factories use leather, business with our suppliers. a copy and are responsible for RSL Management (AFIRM) Group, necessary technical performance. a third of the tanneries that supply with a view to reducing the overall informing their suppliers about our and our brands use several specialist Lacoste’s footwear factories are number of hides used. Our ‘Policy, Standards and Guidelines requirements. We have also established testing centres to ensure products for Managing Restricted Substances’ a working group that brings together comply with relevant requirements.

Packaging - JD BAGS - Our packaging guidelines emphasise the ‘reduce, reuse, recycle’ principle. Manufacturing efficiency Each brand is responsible for implementing the guidelines as 33% appropriate for their products. For example: Our supply chain’s environmental As part of the Textile Industry + Berghaus packages all footwear in a footprint is significantly greater Sustainability Platform, in 2012 we 100% recycled and recyclable shoe recycled than that of our own office and collaborated with six other brands box that is printed with soya-based material warehouse facilities. We do not have and four consultancies to develop an inks. The brand is also reducing the direct control over the environmental energy efficiency guide for Chinese number of swing tickets used on all performance of factories, but we suppliers. The guide includes an products, and its flagship stores use do have a role to play in influencing overview of the business case for 100% recycled paper bags suppliers that manufacture our energy efficiency, advice on energy products to make their sites more management and data reporting, + ellesse requires all its shoe boxes, JD stores use 18.5 million plastic carrier bags annually, efficient. We ask these suppliers and a series of case studies. We will tissue paper and swing tickets to around 42% of which are high quality drawstring duffle about their energy saving measures be making the guide available to contain a minimum of 50% recycled bags that customers can use and re-use. All JD’s plastic as part of our factory assessment suppliers during 2013. content and be 100% recyclable, bags are made from 33% recycled material, and contain an process. Our direct influence on while its shoe box design allows for oxo-biodegradable additive that helps them break down more businesses further down the supply construction without the use of glue quickly after disposal. JD Sport Fashion’s stores use paper- chain, such as raw material providers + Speedo’s poolside footwear comes based bags in the Republic of Ireland, and are fully compliant and dye-houses, is limited. on recycled cardboard hangers with the Welsh Assembly’s carrier bag charge scheme. instead of in shoe boxes, significantly reducing the amount of packaging material required.

18 19 Shipping Product end-of-life management

For cost and environmental reasons, We look for ways to reduce waste Product we choose to ship our products by sea associated with the disposal of surplus reuse and instead of air freight where possible. stock and products that are no longer recycling Around 99% of Pentland Brands’ 3D printing improves sampling wanted or fit for purpose. products were transported either by efficiency 6 sea, rail or road in 2012, up from 98% Developing a new product requires the Our longstanding collaboration with the in 2011. manufacture of several physical samples that charity In Kind Direct provides Pentland allow the brand to review and approve the Brands with a way to divert surplus, We also take steps to store products design and materials used. These samples unsaleable products away from landfill efficiently in our warehouses. are made by our manufacturers, and usually and towards charities that can put them See Environment, page 22, for details sent by air to our offices in the UK. to good use. JD Sports Fashion also of our energy efficiency initiatives. gives surplus product to charity, We have begun using 3D design and printing including In Kind Direct. See Community, to make product sampling more efficient. page 40, for details of our contribution to The process creates a 3D prototype from In Kind Direct in 2012 and other product compressed powder or layers of resin, which donation initiatives. designers can review and mark-up with any changes. This cuts down on the number of We also support a Loughborough University research project that physical sample stages required to perfect Industry collaboration improves sustainability the design of footwear and equipment such investigates how shoe design and as swimming goggles, reducing material recycling processes can be adapted to measurement achieve a vision of ‘zero waste to landfill’ consumption, waste and air freight, as well Pentland is one of the founder members of the Sustainable in the footwear sector. Lacoste footwear as the time taken to develop a product. Apparel Coalition (SAC), an industry-wide group that aims to developers have contributed to the project measure, compare and reduce the environmental and social by giving feedback on draft guidelines on impacts of apparel and footwear products. The SAC now has design for recyclability, by testing tools over 80 members that, combined, account for around one designed to aid the selection of more third of the global apparel and footwear industry’s economic 99% recyclable materials, and by providing value. It brings brands, suppliers, retailers, government of Pentland products researchers with information on shoe departments, academic institutions, and research and transported by construction methods, material types advocacy organisations together to collaborate on making sea/road/rail and material density. the industry as a whole more sustainable. In 2012, Speedo collaborated with During 2012, the SAC launched its product sustainability sustainable fashion label, From measurement tool, the Higg Index. The first iteration of the Somewhere, to create a dress using index focuses on environmental factors including water surplus fabric from Speedo’s Fastskin3 use and quality, energy use and greenhouse gas emissions, Super Elite swimsuit. Designed by From waste, and chemicals. We contributed to the development of Somewhere in collaboration with a the tool, using data on the composition and manufacture of graduate from Falmouth University, the two Berghaus products. ‘Unity dress’ was made using off-cuts from special edition versions of the suit in the colours of Speedo-sponsored swimming teams from around the world.

20 6 Due to a rounding error, this was reported as 97% in the 2011 CR Review. 21 energy water Environment

waste

We are committed to reducing our UK, Republic of Ireland, France and Our priorities are to use energy more environmental footprint by operating Spain. The rest of the Group’s direct efficiently, reduce waste and increase our offices, retail stores and distribution environmental impacts – from other recycling, and we also look at ways centres more efficiently. The majority stores, offices, distribution centres to use water and other natural of this footprint is associated with and business travel – are relatively low resources more responsibly. JD Sports Fashion’s 800 stores in the by comparison. The Pentland Group Environmental Policy outlines our standards.

23 Pentland Brands Energy and climate change We look for ways to reduce energy Speedo’s base in Nottingham is rated Globally, we consumed around consumption at all our sites globally. as ‘excellent’ by sustainable building 16 million kilowatt hours of electricity In general our offices are modern experts BREEAM, and is fitted with and gas in 2012, just over half of and relatively energy efficient. Our energy saving technologies such as which was used to power and heat London head office is designed As a UK-based company, we All Pentland Brands and JD Sports motion sensitive lights and a ground our UK distribution centres. to make good use of natural light, source heat pump that makes use measure and report our greenhouse Fashion’s stores, offices and Energy efficiency measures and has an automated building of warmth from the ground outside. gas emissions in line with the UK distribution centres in the UK and implemented during the year management system that controls At Mitre and Prostar’s warehouse in government’s Carbon Reduction Republic of Ireland receive power included: POWER FROM and helps reduce energy use, for Commitment. In 2011/12 our UK that is derived from 100% Wakefield, skylights permit enough example by using air conditioning facilities were responsible for 37,826 renewable sources. natural light to virtually eliminate the + Installing voltage optimisation in parallel with natural ventilation. tonnes of carbon dioxide emissions, 100% use of electric lights in summer. technology at our London around 87% of which is attributable renewable headquarters in June 2012. The to JD’s stores, offices and distribution SOURCES ‘powerPerfector’ system adjusts centres. This is around 3% higher than our site’s electricity supply 2010/11, due to JD’s acquisition of according to energy demand, Blacks and Millets stores in the UK. resulting in reduced energy consumption, cheaper energy bills and lower carbon emissions + Testing motion-sensitive lights in the mezzanine areas at our Blackburn distribution centre. Considering emissions from business These have the potential to reduce travel and commuting energy use by 60% if implemented across the whole site The nature of our business means that many employees need JD Sports Fashion In 2011/12, JD succeeded in + Considering energy use in the to travel to visit manufacturers and our global offices, but we reducing its carbon footprint by redesign of our Hong Kong office, regularly use videoconferencing to connect employees without JD’s stores are responsible for around 5% compared with the making better use of natural light the need for air travel. We have also switched to lower emission the largest portion of our carbon previous year, on a like-for-like to illuminate offices emissions, so making them more vehicles for our company fleet. basis. This has been achieved + Promoting energy efficiency 2012 efficient is a priority. JD looks for largely through the replacement through participation in WWF’s ways to use less energy while still To reduce the environmental impacts of commuting, we of inefficient air-conditioning annual Earth Day. On 30th March, giving customers an enjoyable retail encourage employees to car-share or travel by public transport. systems in 29 retail stores, as well employees switched off lights and experience, with goods presented in For example, around a third of car commuters to Berghaus and as a switch to lower watt lamps – computer monitors for one hour at a well-lit environment at a pleasant brasher’s Sunderland office share their journey with colleagues. which reduce the energy required all our global sites. In Nottingham, Speedo offers its staff discounted season tickets ambient temperature. Stores are for lighting by over 50% – for retail for local public transport, arranges for a mechanic to visit the fitted with ‘smart’ energy meters lighting in the UK. During 2012, JD office to service employees’ bicycles, and has showers and that measure electricity and gas has also trialled the use of low- lockers on site for those who choose to cycle to work. use every 30 minutes, and a remote energy LEDs for retail lighting. building management system allows greater control over Over 440 retail staff received energy power consumption. efficiency training during 2011/12, as part of JD’s commitment to continually develop its employees’ understanding of retail operations.

24 25 JD Sports Fashion During 2012, JD also implemented Waste an expanded dry mixed recycling Cardboard is a major source of scheme to divert more cardboard, waste for JD. Where possible, used paper, plastic and metal waste from cardboard is transported from stores landfill at its offices, distribution back to JD’s distribution centres We aim to generate less waste and centres and most UK retail stores. where it is baled and passed to a promote recycling at all Pentland Using the dry mixed recycling recycling contractor for reprocessing. Brands and JD facilities. scheme will help JD to achieve its JD recycled 465 tonnes of target for its new distribution centre cardboard in 2012, nearly 10% more in Rochdale to be zero waste to than in 2011. landfill in 2012. Pentland Brands 31,000 In 2012, 81% of waste from Pentland Brands’ UK offices and distribution centres was either recycled or used Water and other natural resources to produce fuel, up from 73% in 2011. In total, our sites generated around 550 tonnes of waste in 2012 – this was around 5% more online expenses should than the previous year, largely save over 31,000 sheets due to the volume of construction waste being produced during the of paper per year decommissioning of Speedo’s former Across the Group we use relatively little water. Speedo’s Nottingham office that uses boreholes to supply Ascot Road facility, much of which The water we do use is mostly for domestic purposes groundwater to sanitary facilities, and water efficiency was recycled. and landscaping. We look for ways to reduce our water devices fitted in toilet cisterns at Berghaus and brasher’s consumption, and are also working to improve water office in Sunderland. During the refurbishment of our Hong Our facilities have centralised use monitoring. Kong office in 2012, we installed sensor taps in washrooms waste bins that help employees to to reduce water waste. quickly and easily segregate paper, Water efficiency measures at Pentland Brands’ cardboard, metal cans and plastics. sites include the use of mains-fed water dispensers We also make an effort to use other natural resources We also separately collect wood, + Paper: we encourage employees + Furniture: where possible, in place of bottled water, a grey water system at responsibly, and factor this in to our procurement decisions metal, and photocopier and printer to ‘think before they print’, and set we donate unwanted furniture to where practicable. For example: toner cartridges, as well as electronic all printers to default to double- charity. In 2012, the team in charge of + Washrooms at our newly-refurbished Hong Kong office waste which we sell to companies that sided printing. In 2012, we piloted our Hong Kong office refurbishment now have electric hand dryers in place of paper towels either recycle or responsibly dispose a new online expenses system that donated items including chairs and + The catering contractor at Pentland Brands’ London of old equipment. will significantly reduce our paper sofas to the local Salvation Army and headquarters sources Rainforest Alliance certified tea waste from printing expenses the Children’s Heart Foundation. and coffee, Fairtrade bananas and sugar, and sustainably Efforts to manage our waste include: records and copies of receipts. In London we donate surplus furniture sourced fish (Marine Stewardship Council certified where + Cardboard: our largest waste We estimate that, when to Green Works, a charity that passes possible). It also reduces food miles by using British beef, stream, as a result of the boxes implemented across our UK sites, it on at low cost to small businesses, milk and eggs the system could save over 31,000 charities, community and educational used to store and ship our + At Berghaus and brasher’s office, we use natural and sheets of paper each year groups. During 2012 our donations products. We reuse boxes where water-based cleaning products, stock a Fairtrade choice to Green Works included around possible, and recycle anything we in vending machines, and provide staff with recycled 80 chairs, 10 desks, and 7 cabinets. cannot reuse stationery + In winter, we use renewable marine salt – instead of rock salt – to grit paths at our London office.

26 27 10% REST OF THE WORLD 8% EUROPE 49% CHINA

23% ETHICAL TRADE 10% SOUTHEAST south asia ASIA

Tens of thousands of people work recommendations for improvement, Our ethical trade priorities include: for the manufacturers that make and by collaborating with others to + Raising awareness within our our products, mostly in Asia. We bring about sustainable change. business about the importance are committed to working only with of ethical trade business partners who respect the Pentland Brands sources products + Fostering long-term relationships rights of these workers. from factories in 22 countries. Around with suppliers that adopt our half of our suppliers’ factories are values, or have policies that reflect Global supply chains such as those in China and nearly a quarter in the same standards servicing the apparel and footwear Southeast Asia, with the remainder industry pose many complex ethical in South Asia, Europe and the rest of + Managing the supply base in issues. Pentland Group companies the world (see chart). We source the line with local legal requirements, take steps to better understand majority of our products directly from the Ethical Trading Initiative (ETI) and address these issues, by factories, with a further portion made Base Code, and best practice assessing factories and making by business partners under license. + Helping to improve conditions for workers, with a focus on wages, factory health and safety, worker representation, and vulnerable workers.

29 Our standards Factory assessment and follow-up

We expect all factories producing We visit factories regularly to monitor Our standards apply equally to Pentland Brands’ products to comply compliance with our standards, factories commissioned by our with our Code of Employment and new factories must be evaluated licensees to make Pentland Standards for Suppliers. The Code and approved before purchase Brands’ products. We engage is based on the ETI Base Code and orders can be placed. Assessments with licensees to ensure they stipulates that: are conducted by members of our understand our expectations and in-house CR team, or by a third are monitoring factory compliance party auditor where appropriate. If at with our standards. any visit we find gaps in a factory’s Living wages ethical trade performance, we make In 2012 we began using the Fair are paid 01 recommendations for improvement, Factories Clearinghouse (FFC) agree a timed action plan, and then system to manage our factory Working hours are follow up to check on implementation assessment reports and corrective 02 and progress. We encourage action plans. Being a member not excessive suppliers to include worker of FFC also enables us to identify Working committees in the improvement other brands that use the same conditions are process by consulting them on the factories as us, opening the door changes they feel would make the to potential collaboration. safe and hygienic 03 biggest difference. Child labour 04 is not used

Employment is freely chosen 05

No discrimination 06 is practised

There is no harsh or inhumane treatment 07 Freedom of association and the right to collective 08 bargaining are respected Regular employment is provided 09

30 31 Factory assessments in 2012 Industry collaborations In Indonesia, we are one of six by the Center for Child Rights and brands that signed a Protocol on Corporate Social Responsibility (CCR We engage with others in our freedom of association in 2011. As CSR). Pentland was one of seven industry, and specialist non- signatories, we commit to promoting brands supporting the project, which Fact Fact governmental organisations, on adoption of the Protocol among our ran workshops designed to help or or projects that focus on broader ethical y a y suppliers in Indonesia, and to joining young workers under the age of 25 s as s s trade trends in the apparel and local trade unions, suppliers, non- develop communication and team e e s s footwear supply chain. governmental organisations and work skills, and to raise awareness s Additional s m corrective m other signatory brands in reviewing of health issues and the importance action China e e As longstanding members of the its implementation. We source of drug prevention. In total, 800 n follow-up visit n Ethical Trading Initiative (ETI), we t t products from a relatively small young workers at nine factories –

s Assessment s meet regularly with other apparel

number of suppliers in Indonesia. including 100 working for a Boxfresh

pre-purchase b and footwear brands, as well as y

Rest of order y Around a third have also signed the manufacturer – participated in the

non-governmental organisations r

the world t Protocol, with the remainder so far workshops. Complementary training

e Regular and trade unions, to discuss current

p g for nearly 300 line managers focused

review visit preferring to retain their existing

Southeast i issues and potential solutions.

o collective bargaining agreements. on how to communicate better with Europe Asia n We are also part of the Apparel and South Asia a younger workforce. As part of the Footwear Brand Collaboration Forum, Between March 2011 and May 2012, initiative, participating brands also which brings together 18 brands for we participated in a project that worked together on the development collaborative CR initiatives in Asia. focused on the rights of children of a practical underage worker and young workers in China, led remediation plan.

Working with others

Helping factories to improve with sister organisation Better Worker health and safety is a high Ethical trade at JD Factories. A partnership between priority, so where necessary we We are committed to supporting the International Labour Organization work with local non-governmental JD sources products for its own and licensed brands directly projects that help factories meet our and International Finance Corporation, organisations to ensure the people from around 600 suppliers, mostly in Asia and Turkey. Prior to standards and improve conditions Better Work aims to improve making our products have the training purchase orders being placed, all new suppliers must complete for workers. These initiatives are compliance with labour standards, they need to protect themselves and an ethical trade self-assessment, and this process is repeated largely done in partnership with as well as competitiveness, in global their colleagues. In August 2012, we annually for existing suppliers. local organisations that have expert supply chains. In factories that are part organised a first aid course for 23 knowledge of specific issues and of the initiative, Better Work manages workers from seven factories in Fujian, Third party auditors conduct factory visits on JD’s behalf, current good practice in that country assessments and capacity building China. We invited the local Red Cross to check on performance and help improve working conditions. or region. projects on behalf of Pentland and to conduct a one-day session covering Visits are prioritised according to need (for example if a other member brands. Having worked the basics of how to stop bleeding, the self-assessment indicates that improvements are required), We collaborate with ethical trade together since 2010, in February 2012 preliminary treatment of fractures, and and according to the volume of product being manufactured organisation Better Work in five we strengthened our relationship by what to do if someone has stopped for JD’s brands at each factory. As part of a rolling programme, factories in Indonesia and one in signing up to become a Better Work breathing. All participants passed the JD audited around a third of its supply base during 2012. Vietnam, as well as one in Cambodia Buyer Partner. course and are now certified first aiders.

32 33 Over 12,000 people work for Pentland Over 12,000 people work for Pentland Group companies, Group companies. This includes 10,400 of which 10,400 who work for JD Sports Fashion (mostly retail staff), and around 2,000 who work work for JD for Pentland Brands7. Sports Fashion

Pentland Brands employees

We rely on the skills, experience and creativity of OUR PEOPLE a global workforce, and recognise that attracting, retaining and developing talented people is critical for our business success.

To support this, we engage regularly with employees, offer a variety of development opportunities, champion diversity and inclusion, and endeavour to provide a supportive, safe and stimulating working environment.

Employee engagement Communication channels include: + Regular meetings between individuals + A company blog that highlights the and their line managers, including the Dialogue with employees gives us annual performance review process valuable insight into their needs latest news from across the business and expectations, and provides a + Regular Q&A sessions with our CEO + A confidential telephone line that employees can use to report any channel for them to suggest how we + A monthly company update concerns or suspected unethical can improve as a business and as an presentation, circulated to all behaviour. employer. It also gives us the chance department heads and brand to let people know about our company managing directors, and strategy, and any changes that might communicated by them to affect them. their teams

7 This includes Canterbury.

35 People development popular courses included our CEO’s leadership programmes, while 15 masterclass on building successful recent graduates joined our ‘future To nurture talent within our business, brands, and sessions on self- leaders’ programme. 2012 we provide employees with a variety pentland awareness and presentation skills. of opportunities to obtain new We have several initiatives aimed knowledge and develop new skills. brands voted Our annual performance review at bringing in the next generation one of the process provides each employee with of talent. Participants on our We offer access to internal and the chance to identify and discuss graduate scheme follow a two year UK’s best external development programmes, their personal development needs development programme. Four new masterclasses run by senior employers with their line manager. A review of graduates joined the business in executives in their area of expertise, by Great 700 100% talent across the business, led by 2012, taking on roles in Lacoste, and e-learning courses. Employees Pentland Brands’ CEO, allows us to Speedo and our product distribution Place to may also request time off to study identify high potential employees and department. We also offer internships ® for professional qualifications. Nearly Work Over 700 UK-based the ways in which we can support and work experience placements. 2,400 participants attended internal employees took their development. In 2012, 36 high training courses in 2012, 84% more potential managers and senior part, and 90% 90% than the previous year8. The most of them said that managers took part in bespoke Pentland is a great place to work 0 0% Welcoming new starters We want everyone who joins Pentland to feel welcome from the day they sign their contract. Along with their contract, we send them a welcome pack that includes a new starter handbook and Pentland Brands wins employer award a hand-signed note from our CEO. In 2012 we were voted one of the UK’s best employers by Great Place to Work®, following an On their first day with the business, new starters receive an assessment and survey designed to capture employees’ opinions on working for Pentland. Over 700 introduction to Pentland, see short films that give an insight into UK-based employees took part, and 90% of them said that Pentland Brands is a great place to work. our purpose, business and brands, take part in a tour of their new We received positive feedback from 79% or more of the respondents in all seven survey categories. workplace, and have time to meet and get to know their team. The highest scores related to our corporate responsibility (91% positive responses), employees’ STARTER sense of camaraderie (86%), and people’s pride in working for Pentland (85%). In 2012 we developed and piloted a new quarterly induction workshop, aimed at new and recent joiners in the UK. The workshop HANDBOOK We followed the survey with a series of workshops designed to explore people’s responses in includes an opportunity to meet the CEO, as well as sessions on the greater depth. We will use the findings to look for ways to further improve the experience of people product development process, consumer behaviour and CR. It also who work for Pentland. For example, based on survey feedback we have moved our annual talent gives people the chance to meet colleagues from across Pentland, review process to the third quarter of the year, rather than the first, to ensure it focuses more on and to share their knowledge and experiences with the group. We development potential than on performance over the past 12 months. plan to run these induction workshops globally from 2013. We plan to run the survey globally in 2013.

8 Many individuals attended more than one training session during 2012, therefore this figure is larger than the 2,000 people who work for Pentland Brands.

36 37 JD people

Diversity and inclusion JD employs around 10,400 people Training and development Equal opportunities A diverse workforce enhances (full-time equivalent), most of whom Employee development is a major JD is committed to equal innovation and creativity, and helps work in the UK, Republic of Ireland, A diverse focus for JD, which recognises the opportunities, and aims to fulfil our brands understand and create France and Spain at its Bank, Blacks, significant role it plays in increasing requests for flexible or part-time the right products for our increasingly Champion, Chausport, JD Sports, workforce morale, improving staff retention, work wherever possible. global consumer base. Millets, Scotts, Size? and Sprinter retail stores. Together they comprise 84% and keeping knowledge and skills enhances within the business. We are committed to treating all of the people who work for Pentland Employee engagement Pentland employees equally and Group companies. innovation Retail staff are encouraged to JD takes steps to ensure consistent with respect, regardless of age, seek development and progression communications across its large, disability, ethnicity, gender, marital & creativity ultimately up to management level. geographically-dispersed and flexible status, religion, social background To help them achieve this, JD’s retail workforce. Regional and area or sexual orientation. training team provides a range of managers communicate regularly with opportunities including: store managers and retail staff, while Around 40 languages are spoken the human resources department’s at Pentland Brands’ London + A twelve week training academy quarterly magazine gives employees headquarters. for retail supervisors who want to all the latest information on news progress into management. Held from within the business, such as three times a year, the course the arrival of new senior staff, training covers management skills such opportunities on offer, and employee as communication, leadership, of the month awards. JD’s finance motivation and delegation department also issues updates on + Week-long induction programmes the company’s financial performance. Health, safety and wellbeing minimise them. Desk-based new 84% for managers new to the business, starters complete a risk assessment held regularly throughout the year We are committed to protecting the that helps to ensure they have the health and safety of our employees correct set-up and posture during + Half-day leadership skills workshops at work. computer use. for junior managers.

Health and safety measures are Benefits that help support employee gym especially important for workers at wellbeing include: our distribution centres, whose roles often involve lifting heavy objects + Competitive maternity, paternity and working at height. At our offices, and adoption leave the business, employees participate implementation of good health and health and safety risks are relatively + A subsidised nursery for children swimMing Health and safety in a health and safety induction and safety practices at the new facility. low and accidents are infrequent. under five years old, at our London pool JD is committed to protecting the training programme, and JD also runs Those that do occur are most headquarters health and safety of employees targeted safety awareness campaigns JD’s Health and Safety Committee commonly associated with slips, + Flexible working, where appropriate and customers. throughout the year. meets three times a year and provides trips or falls. + Complimentary recreation facilities employees with an opportunity to at our London headquarters, five-a-side The health and safety team provides In late 2012, JD began using a new, raise any safety concerns through Upon joining Pentland, employees including a gym, swimming pool, football input to the design of all new and 860,000 square foot distribution centre their nominated representative. The complete an e-learning course on and an astroturf sports pitch. retrofitted retail stores, and also in Rochdale, UK, and expanded its Committee also monitors progress health and safety risks and how to pitch audits stores for high safety standards health and safety team to ensure the towards JD’s health and safety targets. during construction. Upon joining

38 39 We are committed to supporting community groups and charities, and are involved in a variety of philanthropic activities. Each Pentland Group company and Pentland Brands office has the flexibility to support the organisations and causes that are most relevant to them. They contribute through a combination of product donations, fundraising activities and employee volunteering.

Product donations

For over a decade, Pentland Brands We also donate surplus product through donated surplus point of sale has partnered with In Kind Direct, an other channels where appropriate. displays, shoe boxes, mannequins organisation that redistributes surplus For example, in 2012, Speedo donated and shelves to local charity, the goods from manufacturers and retailers surplus swimwear to Oxfam’s ‘Frip Scrap Art Material Store (SAMS). to UK charities working at home and Ethique’ social enterprise programme SAMS recycles items that would abroad. In 2012, nearly 700 charitable in Senegal. The initiative provides local normally end up in landfill, making COMMUNITY organisations – including child and entrepreneurs, mostly women, with them available to educational youth care, disability support, and products for them to sell and boost organisations as free arts and family welfare charities – received their livelihoods. crafts materials. donations of our products. Our contribution included jackets, rugby In February 2012, our distribution centre shirts, t-shirts, footballs and footwear. near Blackburn in the north of England

40 41 Fundraising and donations Employee volunteering

Pentland Brands employees participate Employees also swam a total of + Shenzhen, south China: donating Pentland employees enjoy care home for elderly disadvantaged Wildfowl and Wetland Trust wetland in a variety of fundraising events 10km for World Swim Against Malaria, around RMB 3,000 (£300), as well volunteering as a way to combine people, many of whom suffer from centre. By digging a new pond they throughout the year. a charity supported by Pentland as product samples from Kickers, team building with giving back to disability and poor health. Pentland have helped to create a vital new and Speedo that raises funds to buy Lacoste and Speedo, to a local their local communities. staff brought care packages and woodland habitat. The distribution Often these have a sports theme. mosquito nets for people in developing children’s care centre that is home spent the morning socialising with centre is a member of the WWT In 2012, staff from our London countries. The swim raised over £1,000 to around 300 children under the In April, staff at our office in Ho Chi the residents. Corporate Partnership Scheme and headquarters raised funds for two – the equivalent of over 300 nets. age of 14 Minh City, Vietnam, organised a trip has previously donated around £1,000 charities by participating in races + Bangkok, Thailand: bringing to a nearby beach, equipped with Colleagues at our distribution centre to fund the purchase of grass-cutting across the city’s parks. In July, a Staff at our offices in Asia made a Christmas gifts including clothes, gloves and bags to gather plastic in the northeast of England spent equipment and the establishment of team of 20 women took part in a five variety of charity and community books and toys to children at a bottles and other litter. Also in 2012, a day in June volunteering on a a sustainable garden. kilometre race in support of Cancer donations in 2012, including: school in Ayutthaya that was badly employees in Vietnam visited a local conservation project at their local Research UK, raising more than £3,000. + Hong Kong: supporting the Salvation affected by floods earlier in the year. At the Royal Parks Half Marathon in Army for the third year running, with We also replaced the school’s audio October, 16 new and experienced employees donating items including equipment, which had been damaged runners raised over £2,000 for Right clothes, books, musical instruments by flood waters. to Play, a charity that uses sport for and electrical appliances for JD community investment development in disadvantaged areas. distribution to people in need

JD made cash and in-kind donations of 60 children, as well as examination around £55,000 to a variety of charities fees, school books, educational and community initiatives in 2012. materials and school uniforms.

Its major focus is on supporting JD’s donations in 2012 also included: The Christie, a Manchester-based + Scrap metal worth over £12,000 to women took part in a five kilometre £3,000 NHS Foundation Trust that specialises Sports Traider, a charity that gives race in support of Cancer Research in cancer treatment and research. young people the support they need JD has made a commitment to help to get into sport UK, raising more than £3,000 £55K The Christie raise £500,000 for a 20 + £10,000 to Once Upon a Smile, which teenage cancer unit. During 2012 JD DONATIONS offers support to families who have it sponsored The Christie’s fundraising lost a child, or a parent of a young ball, and a team from JD raised to CHARITIES child, as a result of terminal illness nearly £8,000 by participating in the Great Manchester Run. + Over £7,500 to help Kids Company in 2012 provide practical, emotional and To support communities near its educational support to around £0 southern Indian manufacturing base, 17,000 vulnerable inner-city children 0km 5km JD has an ongoing relationship with across London the Udavum Karangal (‘Helping Hands’) + Nearly £4,000 to the Marina Dalglish orphanage in the city of Coimbatore. Appeal, in support of cancer During 2012, JD donated around £5,000 treatment facilities in Liverpool. to the orphanage – a contribution that covers the cost of education for around

42 43 Pentland Group plc 8 Manchester Square London W1U 3PH www.pentland.com For further information about CR at Pentland Group, contact: [email protected]

No Ordinary Shoes Limited is the worldwide Licensee for footwear under licence from Ted Baker plc. Airborne Footwear Limited is the UK Licensee for apparel, footwear and accessories under licence from Kickers International B.V. Pentland Chaussures Limited is the worldwide Licensee for footwear under licence from Lacoste S.A. and its associated companies.

BERGHAUS and are registered trade marks of Berghaus Limited. BOXFRESH and are registered trade marks of Boxfresh International Limited. BRASHER and are registered trade marks of The Brasher Boot Company Limited. CANTERBURY and are registered trade marks of Canterbury Limited. ELLESSE and are registered trade marks of Ellesse International S.p.A. KANGAROOS and are registered trade marks of Asco Group Limited. KICKERS is a registered trade mark of and used under licence from Kickers International V.C. LACOSTE and are registered trade marks and used under licence from Lacoste S.A. and its associated companies. MITRE and are registered trade marks of Mitre Sports International Limited. PROSTAR is a registered trade mark of Prostar Sports Limited. RED OR DEAD is a registered trade mark of Red or Dead Limited. SPEEDO and are registered trade marks of Speedo Holdings B.V. TED BAKER is a registered trade mark of and used under licence by No Ordinary Designer Label Limited. PENTLAND is a registered trade mark of Pentland Group plc.