Making things better Pentland Group Corporate Responsibility review 2015 Contents 1 Introduction Explaining who we are and what corporate responsibility means to us 02 2 Sustainable products Reducing the impact of our products across our supply chain 18 3 Ethical trade Conducting business ethically and fairly, respecting everyone involved in making our products 34 4 Operations Reducing any harmful impact of our business operations and creating a great place to work 46 5 Charity and community Contributing positively to the communities in which we operate 56 6 UN Global Compact: Ten Principles Reporting in line with the UN Global Compact’s Ten Principles 66 Pentland Brands 1 Introduction Who we are and what corporate responsibility means to us 01 02 2015 Highlights This page summarises some of the year’s key achievements: Sustainable products Ethical trade Operations Charity and community We reduced We started supporting 1/3 GREENHOUSE GAS EMISSIONS BY Of berghaus’ autumn WINTER 2016 RANGE Pentland is a % THREE NEW will have MadeKind swing tags – they let the 7 CHARITY PARTNERS consumer know that products have been designed FOUNDING MEMBER OF ACT for the next three years, voted for by with sustainability in mind an industry body focused on paying living wages year on year Pentland Brands employees 90% 29 87% 100% REDUCTION IN ZERO Of lacOste’s & TOLERANCE ISSUES We used berghaus’ leather TEAMS PARTICIPATED compared with 2014 came from Leather Working Group 100% RENEWABLE ENERGY IN GIVE BACK DAY medal-rated tanneries at Pentland Brands sites across the UK – a day of volunteering in the community 23,203 675 WORKERS AT We sent BERGHAUS SUPPLIER FActoRIES WE DONATED SURPLUS was the first British brand to sign up to bluesign®, in Southeast Asia are covered ZERO WASTE PRODUCTS to 675 CHARITIES a system that aims to eliminate harmful by the Better Work programme to landfill at Pentland Brands HQ, the Glover through our partnership chemicals from the supply chain Distribution Centre and Berghaus HQ with In Kind Direct 46% 88% MITRE of our spend is with OF OUR EMPLOYEES We were awarded a launched the Promax ball, made VENDORS WE HAVE said Pentland Brands is a SILVER QUALITY MARK with recycled plastic WORKED WITH FOR MORE Great Place to Work® for Payroll Giving THAN 10 YEARS 03 04 Introduction Introduction 1.1 Continuously evolving What do we mean when we talk about sustainability? our approach For us, sustainability is about avoiding damage to the natural world and human communities. If the planet and its people suffer, our business suffers too. So we aim to grow in a way that respects nature and society. Building a sustainable A note from our Chairman I’m pleased to share that we’re making We launched the Pentland business has never been great progress and we’re continuing to build Centre for Sustainability in sustainability into the way we source, design, Business at Lancaster University more important. It’s also Our journey in 2015 manufacture and sell our products. This research unit brings together the the right thing to do, and best minds in science and business to The context for corporate responsibility We are proud that Berghaus extended its explore sustainable ways of working. our stakeholders expect it. changed considerably in 2015 and the ColourKind range, which is made using 89% UN Climate Change Conference, COP21, It focuses on six areas: less water and 62% fewer CO2 emissions. agreed to limit the rise in global temperatures The brand also offers a repair service, to help • Ethical supply chains to less than two degrees centigrade. people enjoy their products for longer. (See • Food, energy and water issues • Ecosystems risk page 31 for more.) Building a sustainable business has never • Sustainable lifestyles and cities • Sustainable soils and land use been more important. It’s also the right thing Our partnerships with universities went from • Scaling up business solutions to do, and our stakeholders expect it. strength to strength. In 2015, we launched They demand consistently high standards, the Pentland Centre for Sustainability in and are increasingly concerned with the We partnered with UCL to fund Business at Lancaster University. This impacts we have across the whole supply a Public Policy Scholarship new research centre explores robust and chain – from the raw materials we use to responsible business models. We’ll look We’ve had an ethical trade team for nearly As our journey continues, I’m delighted to We launched the Pentland consumer products we sell. carefully at what it discovers and evolve our 20 years. But today’s challenges cannot be renew our commitment to the UN Global Scholarship with UCL, offering a fully funded Global Public Policy approach accordingly. We also continued to tackled by one organisation alone. That’s why, Compact, its Ten Principles and the new This year we have aligned our strategy with masters to students from the work on human rights with the UCL School in 2015, we joined the ACT collaboration. This Sustainable Development Goals. southern hemisphere to study the UN’s Sustainable Development Goals. of Public Policy. collective of governments, unions and suppliers at UCL, NYU and Pentland. We’ve also set out aspirations across our lobbies for living wages to be paid in the apparel They will guide us through exciting times. four focus areas, and highlighted key A key area for Pentland is our ethical supply and footwear supply chain. (More about this achievements to date. and our other partnerships on page 16.) R. Stephen Rubin Reporting in line with the UN chain. This is highly relevant, given how Global Compact Ten Principles much footwear and apparel is made in the Chairman developing world. Pentland was an early Nearer home, it’s great to know that Pentland Pentland Group If you want to see how our activities mover here. Brands was ranked the eighth best large UK align with the UN Global Compact, company to work for by the Great Place to see page 66. Work® Institute. The organisation subsequently recognised us as the 18th best large workplace in Europe. 05 06 Introduction Introduction 1.2 Who we are We’re in business to Pentland Group plc PENTLAND BRANDS About this report build great brands and make great products for A family business This report provides an overview of activities that relate to Pentland people to love, generation Group plc and its three Pentland Group plc is a family-owned, global after generation. business areas. management company. We have wholesale * * and retail businesses across many different It focuses especially on Pentland products and countries. * Brands – as this is where we have most opportunity to influence As a family business with family values, * Footwear Licensee positive change across the honesty, fairness, respect and hard work supply chain. JD Sports Fashion run through everything we do. plc, of which we own 57%, also JD Sports FAShION PLC has a large footprint. You can Our three divisions find more information about its activities in its combined annual Pentland Brands report. We refer to its report throughout this review. Our brand management division, Pentland Brands, is made up of 13 world-class sports, We consider the impact of these outdoor and fashion brands. brands in terms of how products are sourced, designed, manufactured, JD Sports Fashion plc distributed, used and disposed Our retail division comprises JD Sports INvESTmENTS AND of. We understand that it is Fashion plc, one of Europe’s leading retailers TRADING SUBSIDIARIES impossible to directly control of aspirational branded sportswear, fashion everything, so this report includes wear and outdoor clothing and equipment. many examples of how we’ve We hold a 57% share in the company, which worked with suppliers, customers has approximately 1,000 outlets. and consumers to make progress, using information obtained mainly Investments from Pentland Brands. We also invest in other businesses across LEFT a variety of industries. Detail FROm OUR history wall 07 08 Introduction 1.3 Why corporate IN 2015 Meanwhile, the planet’s IN 9 people are responsibility matters ‘earth POPULATION 1 OVERSHOOT continues to grow UNDERNOURISHED Day’ CAmE ON 13 AUGUST (EARLIER ThAN EvER BEFORE) meaning the world consumed a year’s from seven billion in 2011 to a projected worth of renewable natural resources The social and Our business depends on natural resources Operating our business responsibly and BILLION and of adults will be environmental such as water, energy, leather, rubber and sustainably means we can reduce the impact 9.5 1/5 cotton to produce and transport our products. of regulation, enhance our reputation, remain a IN JUST OBESE by context we operate Increasing population and consumption levels Great Place to Work®, improve how consumers 8 MONTHS BY2050 2025 in is always changing. are driving up competition for these vital see our brands, and continue to deliver a natural resources. Without them, we simply financial return on investment. SOURCE: UN World Food Programme cannot sustain our business. SOURCE: Global Footprint Network SOURCE: The United Nations & Lancet Medical Journal (respectively) In response to these challenges, IN JUST YEARS 45 12% of the WORLD the UN has established between 1990 and 2035 17 SUSTAINABLE DEVELOPMENT GOALS It expects member states to meet these goals over the next 15 years WORLD ENERGY CONSUMPTION still live in is expected to have EXTREME DOUBLED POVERTY We have identified those where we can make the biggest contribution, and we’re using SOURCE: BP Global